Welcome back to the channel everyone today, i want to explain how even one small mistake can bring down an entire hedge fund, and i want to use a brilliant example of bill huang. If you don't know who he is i'll, explain it throughout the video and tell you how it relates to amc and gamestop so stay tuned, and let's make some money also guys be sure to check out those links down in the description below to join the private Discord and become part of the team and also to check out my clothing store. So you can pick yourself up a cool space ape hoodie and i want to dive straight in with the q information so frustrated because you blew up your 20 000 portfolio. Well, how about a portfolio valued at 20 billion dollars? Here's the story on how bill huang blew up 20 billion dollars in two days to start off this story, who even is bill? Huang huang unbeknownst to most was among some of the world's wealthiest individuals.

He was a giant influence on financial markets, but almost no one had ever heard of him or the name of his firm archagos capital management. How could one firm archagos a family office and by the way, a family office is a firm that manages the money of the owner and maybe a few close friends and family caused so much chaos huang would cause losses in total of 30 billion dollars from 20 Billion of his own portfolio and 10 billion of the bank's money as well after college, his dream was new york city, but he couldn't get hired at goldman ironic or morgan stanley. He'd end up taking a job at hyundai securities turns out. He was a very good security salesman there and caught the attention of julian robertson of tiger management bill would go on to become a tiger cub.

The term used for former disciples of julian people that worked under robertson had great success and were later able to spin out their own firms. Huang would leave the firm to start his own hedge fund tiger asia and robertson would also cede the fund with his own capital tiger. Asia would be extremely successful at one point: managing close to 10 billion dollars, but tiger asia was between aggressive and illegal trading regulators. Throughout the world accused the firm of insider trading and bill would plead guilty for hedge fund.

Wire fraud bill would be forced to shut down tiger asia. Out of this he'd form a family office, archagos capital management under the family office structure he'd take his own fortune. Approximately 200 million dollars and hire his own analysts and do his own work. He was pretty successful at first.

There was a couple of things that would work well in his favor. He invested in tech stocks like amazon, facebook, google and a few more to name just a few. He had also started to increasingly use more and more leverage now. This seems very similar to some other relatable hedge funds that we know of like citadel, who primarily invest in tech companies like amazon, but also use a lot of leverage like 7.8 times to 1..

Borrowing. A lot of money meant that his gains were intensified and he would continue to put the capital into the same bets with these leveraged bets he'd taken 200 million dollars and turned it into a 20 billion dollar fortune in under seven years during this time as well Bill was steadfast in spreading the word of christ deep down. He believed that by investing into these companies he was advancing society on behalf of god. He felt that the positions and the double downs he was taking were part of god's plan and therefore he didn't have any hedges in place for any mistakes that could be made.

He wasn't playing the sides of both trades and he was just going deeper and deeper and deeper on these trades. Using more and more leverage sounds a lot like citadel shorting, more and more and more amc until they're up to their eyeballs in shorts and leverage and illegal naked shorts, and they just don't know what to do anymore. To make the story even more interesting. Huang never lived large or in the spotlight.

He had a small house in suburban new jersey and drove a hyundai suv. Essentially, a grown-up version of a wall street bet subscriber his strategy was to find a couple of stocks bet on them double down and not worry about anything else. He thoroughly believed the positions he was taking was all part of this larger vision from god, which would eventually lead to his undoing. So where did this fiasco first start to unravel? On march 22nd, viacom, cbs or viac announced a stock and convertible bond sale to raise 3 billion dollars.

Huang had a large position in viacom and every time the stock would tick up. He would continue to put more money in as it went up. Instead of helping the stock, the stock went down 9 and the following day. It would decline another 23.

Now this seems a lot like citadel having a very large short position in amc and every time amc continues. Going up citadel are adding to their short position and then all of a sudden amc is going to jump by 9 and then 23 and there's going to be some fomo and amc is going to jump even higher, with the stock declining so quickly or with amc. Increasing so quickly it forced a margin call the dealers he was contracted with would plead wang to sell some stock, so he would survive. He would take some losses, but he would live to see another day, but hwang would refuse, and that sounds a lot like citadel.

Refusing to close their amc short position back in january or february or maybe even may and june, yet they still haven't closed, that short position and they've still just been adding more and more naked shorts. But the biggest problem was that it was multiple banks margin calling hwang, suddenly names that bill had plowed billions into were no longer moving in his direction and he had not implemented any effective hedges. The bank started to panic after they loaned him lots of money and demanded him to post more cash or risk his whole portfolio being liquidated. Huang would not have enough cash lying around and they would liquidate his entire portfolio of 20 billion dollars, but wait there's more.

It wasn't just his money, he risked the bank's money as well: credit suisse lost 5.5 billion dollars, nomura japan lost 2.5 plus billion dollars, but goldman sachs wells fargo and deutsche got out without losing anything now. This is also very, very similar to the amc squeeze as well. Those hedge funds that cover first are going to be the hedge funds that take the least in losses, those hedge funds that try and ride out and get margin called later down. The line are going to be the funds that suffer the most if a hedge fund has been shorting amc since 70 and closes their short position at 90, they're gon na take a fraction of the loss that a fund shorting amc from twenty dollars and being margin Called up two hundred dollars would take in comparison, but how would so many banks loan him that much money huang was an invisible whale using swaps to remain unseen instead of his name on the leverage agreement documents? It's the firm you're dealing with that shows up with this.

It's the banks that appear as the stockholders and not bill. While he profited off of the moves. This would be the end of bill huang. Fortunately, he managed to not crash the entire financial system in the process as well.

Of course, wall street is no stranger to losing money, but this case is unique in financial history because of the size of positions one individual accumulated and the speed at which it was destroyed. This is one of the most outstanding failures in modern financial history. No individual has lost so much money so quickly and that source comes from bloomberg, benjamin the wall street journal and the financial times now. Something else i found very very interesting is that we could be closer to the market crash than we first thought.

Breaking news wells fargo has halted all small business loans, and this is confirmed by my conversation with a friend who works for wells, fargo bank after he or she attempted to apply for a small business loan for a client. So the friend says get this. I went to apply for a small business loan for a customer on thursday. Well, the option to apply was no longer in our system, so i called down to support and they said we are not doing them.

Wells fargo failed to mention to its employees that they've placed small business loans on hold, and he says oh poop, then it's closer than we think and his friend says yep, but the company normally gives us a heads up and he says well that makes me think. It's even closer than we first thought and his friend says we were told about personal lines of credit being taken away and withdrawn six months in advance and he says, and they aren't saying anything to anyone and his friend says yep. No one in my company knew about it. We were like what the hell we just did business loans last month, but the link you posted, showing the one trillion dollars in required collateral, made me think this had something to do with it.

He says i do believe it does and it would make absolute sense. His friend said yep. It does, especially when they didn't tell us, and he says, of course this info will stay out of news, because it will cause panic and it will give more proof of. What's coming and his friend says right exactly, i think we are really close now.

Obviously this is just a text between somebody and his friend. There's no real way to confirm whether his friend does actually work for wells fargo, but i guess we'll see over the coming few days. If there's news articles that start breaking about wells, fargo refusing business loans. Now i did do a google search before making this video and so far there hasn't yet been any news stories that have been broken.

Although some people like road, the legacy and the master investor, have commented on this post and therefore potentially believe that it is real, because cory has supposedly been around since the beginning again, i don't really think we can confirm this is 100 absolute truth. Until we start seeing some news articles, but it could be very potential and very possible and could indicate that the market crash is just around the corner. We've also got the ortex update for amc, as we've just had, the actual exchange reported short interest posted and it was much higher than first expected. Therefore, the ortex update shows estimated short interest at twenty point: two six percent the highest.

It's ever been. Ninety point: eight. Seven percent utilization cost to borrow is still low at one point: four: nine percent average and there's 1.1 million shares available to borrow according to fintel, as you can see, we're seeing the estimated short interest at 103 million shares and 20.26 estimated short interest percent of flow. We're seeing 114 million shares on loan, which is 22.40 of the free flow now, obviously, this is only the legal short interest and the legal shares on loan, so it doesn't really mean too much, but you can't actually see it in this screenshot, but underneath we've got The data for the start of june, when amc ran out before back.

In the start of june, we had around 102 million or 101 million shares shorted, and the short percentage of free float was around 20 percent. Again, therefore, it seems like when we get up to 102 million 101 million short interest with a 20 short interest percent of float. That's when the run-up starts and therefore we are at that point again now. I also wanted to show you this chart of amc and we have finally broken upwards out of this wedge or out of this triangle.

We've got a convincing break and this marks potentially the seventh green day in a row. We haven't seen seven green days in a row at all, since maybe 2020 or even 2019. In 2021. We have not seen seven green days.

That is very, very bullish and i firmly believe we've entered cycle three and should be seeing the run up anytime soon. Now i also want to show you this screenshot of a lot of very, very bullish. Amc option plays, as you can see, there's premiums in the hundreds of thousands of dollars, and that means there is a lot of money currently flowing into amc options. On the cool side and for the bullish side, guys be sure to, let me know down in the comments below what you think about small mistakes potentially causing massive massive explosions in hedge funds and also, while you're down there, be sure to check out the links down.

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