In the beginning of 2022, many billionaire fund managers have changed their market sentiment drastically. Many are recently becoming bullish on the market, which is completely opposite to the crowd. In the last two quarters we have seen the likes of warren buffett, charlie munger bill ackman, jim simons, kathy wood and chamath palihapatia, invest heavily into high-growth industries like technology, innovation, e-commerce and more. In contrast, there are still certain fund managers who remain cautious during this time.

Managers such as michael bury are holding their ground in the belief that there will be a devastating market crash soon. This begs us the question whether we will see an upward shift in the global markets. In this video we will take a deeper look into the contrasting fund managers, outlooks of the market and how the current environment may be impacted by these views. Recently on the all in podcast, chamath palihapatiya declared that there would be another dip in the s p.

500 index chamath stated that large cap companies would be negatively affected and the s p 500 would bottom out at 3 800.. The s p is currently at roughly 4 200 points, which suggests that the one last dip is not too far away. The current market sentiment is that buyers are those of growth stocks and sellers are those of value stocks. The smart folks that i talk to who i really you know, uh, look up to and respect think that the bottom in the s p is around 3 800 and that what we still need to do is it's one last flush and that last flush will really Touch the big cap um companies, but that growth is largely done sort of getting taken to the woodshed so um in general.

I think that so generally buyers have broke now: um sellers of value and waiting for this one last. You know 400 point move down the s p and i think people think it's roughly the bottom now, if there's a world war, obviously, who knows all that's wrong but um. This point is further supported by david sachs, a billionaire entrepreneur and world-class venture capital. Investor saks referenced a study showing how internet and sas companies valuations have dropped significantly ev to forward revenue.

Multiples, have spiked in the two-year covet-19 period and have declined from november 2021 onwards to historical averages. There is a possibility that this may continue to decline further, but based on historical evidence. The bargain-hunting period should begin now. Brad gerson has published a couple of charts showing basically multiples in the internet index and among sas companies over the last whatever dozen years or so.

And what you can see is that, over the last two years during covid, there was a huge spike in multiples for internet companies and for sas companies and that over the last really since november. The last three four months has now come down. And as of i would say last week, it was right at about the historical trend and now it's starting to go under the historical trend. So from a bargain hunting standpoint.

You'd have to say that this is the first time that we've been below the the average um for a few years. Now, that's not to say it can't go down even more, because in the same way that you can be above trend, you can also be below trend, and if this war escalates and metastasizes it will go down more. But if this conflict can stay localized and the economy doesn't go into a recession because of everything that's happened, then. Yes, this might be bargain hunting.

This sentiment is clearly shared by kathy wood. The ceo and cio of arkhanvest, who returned 170 in 2020. ark's etf, saw large gains seen from shares in many unprofitable companies and cryptocurrencies. This was partly due to the underlying environments of low interest rates and extensive stimulus.

However, arc's flagship innovation etf has recently been under fire. The etf is down 55 from its 52-week high and down 22 percent year-to-date arcs investors are now facing a rising interest rate environment that stands to be much less forgiving to unprofitable companies trading at higher valuations. However, kathy believes that rising treasury yields would not impact high growth companies as much as it would to mature companies. The average drop in kathy's top 40 stock holdings is about 41 over the past three months.

In comparison, arc's competitors are only down approximately 14. Over the same time period, this larger decrease is attributed to the high-risk, high-growth high disruption stocks that arc invest. Favors, kathy wood, who favors companies that embody creative destruction is not at all phased by this drop. She claims that these losses are temporary and that the bottom occurred on january 27.

2022. Kathy also believes that the stocks within the etf will rebound to prior levels and continue to grow from there. Her strong sentiment towards the market rebounding is reflected through arcs investments, which have recently been skewed towards certain high-growth companies. Arc's persistence of investing in disruptive companies reflect their investment strategy, which is the focus on those that offer the greatest potential for change in innovation.

Our companies are investing aggressively now because they see enormous opportunities, whether it's in the genomic space, the robotic space, energy storage, artificial intelligence, blockchain technology and when you think about artificial intelligence, i think for us - and all we do is focus on innovation. The biggest surprise to us in the last three years are uh is the amazing set of breakthroughs in artificial intelligence. We've got a.i costs uh. Well, we've got a.i moving more than twice as fast as moore's law costs dropping 60 per year.

If you use, if you uh, if you account for both the hardware and the software other fund managers, have also invested in companies with high growth potential to reflect their bullish sentiments, charlie munger has recently doubled down and defended his position in alibaba. He stated that the company is a dominant force in eastern e-commerce and cloud and is expected to see considerable growth bill ackman, who is usually apprehensive about technology stocks, given their higher prices invested in netflix earlier this year, jim simons, the head of one of the best Performing hedge funds, ever renaissance technologies bet on two of the most well-known meme stocks in the fourth quarter: amc and gamestop. The various investments by these billionaire fund managers all have something in common. Their timing also plays a key role in understanding the behavior of these fund managers.

All of these investments have been made in q4 of 2021 or q1 of 2022, which demonstrates that fund managers are finding a lot of lucrative opportunities in the current market outlook. Despite all of this, the tension surrounding russia's invasions begs the question whether the market will continue to operate with some level of stability under the stress. The unprecedented sanctions imposed by various countries, including the us, has created a lot of volatility in the stock market. In additional uncertainty in particular, the us government has focused on placing financial sanctions against russia.

This includes limiting trade and financial transactions involving the breakaway ukrainian territories, blocking assets of russian state-owned financial institutions blocking or rendering unavailable foreign assets of russian elites that are close to putin and other financial sanctions. These sanctions have effectively created an economic war between the western world and russia. They have only ever applied these previously to hostile foreign regimes such as iran, north korea and syria. The primary reason for this is to prevent russia from accessing most of their substantial foreign exchange reserves and ruining their currency.

This has led russia to lose access to global debt markets. These sanctions also have an impact on the global economy. It brings more uncertainty towards the market outlook. This comes on top of an already unstable market, which is still recovering from the impacts of coven 19, and this means that there will be increases in risk premiums across various asset classes.

The sanctions will also be likely highly inflationary because they will affect the russian energy sector. Russia is the world's third largest oil producer behind the us and saudi arabia, so a substantial portion of the oil supply has been hit. This uncertainty has already been baked into the price of oil, which has increased by approximately 20 dollars per barrel in the past month. If the price of energy continues to increase, then there will be higher inflation.

This proves to be a concern, given that we've already been experiencing high levels of inflation and supply chain issues. The worst possible outcome of this would be high inflation and lower economic growth, which is also known as stagflation stagflation is when an economy experiences high inflation, while simultaneously experiencing little to no economic growth. That would be a disastrous situation to be in because any attempt to slow inflation would only crash the economy even more. In addition to this, these sanctions put a further strain on the supply chain which in turn drives higher food prices, increased airfare costs and further travel restrictions.

There were also concerns over the interest rates with fed chair jerome powell, stating that they are inclined to support a 25 basis point rate hike. He further explains that they would move more aggressively if inflation does not subside as fast as expected. Federal policy makers claimed to be surprised by the persistence of high inflation, as they thought. The rise of fast price increases triggered by the pandemic would be temporary.

That has obviously not been the case. However, the fed's prime focus remains on managing high inflation. Pow has reinforced that the ukraine situation will be taken into consideration when assessing monetary policy changes, especially as supply disruptions become larger and longer lasting. There were still many events that are yet to transpire from the russia-ukraine war and there is still a lot of volatility to come.

However, these dynamics are not unprecedented and the pandemic has shown that many companies are resilient and some can even be profitable during uncertain times. The fund managers behavior show that the global economy will likely be able to withstand such an event. In saying this, there are some outliers in this mix and one is michael burry brewery sold out of most of his u.s stocks late last year. Prior to any word on the ukraine situation, this was in preparation for what he calls the mother of all crashes.

By doing this bury managed to evade the stocks out of tanks following the crash like golden ocean marinus pharmaceuticals and scorpio tankers since q3, 2021. Those three stocks are down 25 percent 44 and 43 respectively, on the other hand, bury missed out on cashing in on some of his investments that increased in value like precision, drilling occidental, petroleum and ingalls markets since q2 2021. Those three stocks have all surged by 91, 38 and 26 respectively. Burri is simply one out of many fund managers, and many billionaire fund managers are becoming increasingly bullish on the market.

However, there are potential concerns that are currently impacting the market and will continue to impact the global economies into the foreseeable future. This leaves us with the question of whether the markets are, in fact bullish or bearish, even though the market is currently experiencing volatility. Billionaire fund managers are ready to weather the temporary storm ahead. In fact, many of them believe that this would be the time of bargain hunting stocks and cherry picking the ones that will really be the winners.

Let me know where you think the market is heading and what your view and the fund managers positions are. If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.