Michael bury made billions not once not twice but three times, that's right after predicting the dot-com bubble in the 2008 recession, he also predicted the most recent market correction. The market has already dropped significantly, but burry believes that this is just the start of much more to come. He actually still sees the market crashing over fifty percent more from the current levels. This video will cover how brewery has already made millions and how you can? Hedge, your portfolio, just like brewery a lot of investors, call michael burry a broken clock because he makes the majority of his money from market crashes timing.

The market is notoriously difficult and brewery is not immune to that. He has been early to every prediction he's made, but he's also been right at the end. Bury recently tweeted habitually be one to two years early on literally everything, and you too can attain broken clock. Bury first made his market crash prediction in late 2021.

While it's been a while, since then, the situation has played out exactly as he predicted he foresaw, accelerating inflation, a crash in growth, stocks and overall market correction and a crash in bond prices. Brewery is always early, but he always seems to end up right, no matter what one of the key reasons why berry has been able to predict. Market crashes is because of the predictability of human nature, while technology has evolved, human behavior, never changes and history shows that burri said that third time's a charm 10 years, leading to a financial crisis, yellow s, p, 500. 2000.

Why s p 500, today green dial 1929 got ta love human nature. Nothing, if not consistent. The yellow line represents the speculation during the dot-com bubble. The green land resembles the roaring twenties before the great depression.

Both of these periods include unprecedented levels of financial risk that ultimately led to a sharp downfall. In the dot-com bubble we saw unprofitable internet stocks rally, one thousand or even two thousand percent before crashing the zero. The roaring twenties also had ridiculous levels of speculation. Stock prices quadrupled within the span of nine years, and most investors were convinced that prices would continue rising brewery, tweeted, a newspaper showing how ridiculous the speculation was.

The headline explained how, even though the market went down for the day, a rally at the market closed tiered brokers. Both of these bull runs point towards one behavior, which is greed. This greedy behavior also occurred in 2020 and 2021, while the market might rebound in the short term. Brewery sees the market crashing over a one or two year span after 2000, the nasdaq had 16 bear market rallies above 10 averaging 22.7 before bottoming down 78 after 1929.

The dow had 10 bear market rallies over 10 averaging 22.8 percent before bottoming down 89 percent. Burry is essentially saying that the market will undergo short-term rallies, but you shouldn't take that as a signal of long-term recovery. He further explained his prediction by saying that dead cat bounces are the most epic 12 of the top 20 nasdaq. One day rallies happened during the 78 percent drop from 2000's top nine of the top 20 s p.

500. One day rallies happened during the 86 drop from the 1929 top. This tweet brings out an intriguing and deceiving correlation. The market always rallies the most during long-term market crashes, which is extremely misleading, brewery, has pointed out a lot of correlations, but we all know that correlation does not equal causation.

Michael burris spotted some frightening fundamentals that are backing up his prediction. Everyone knows that the macroeconomic situation is horrifying. Some economists will tell you that the ukraine, russia situation is on the brink of collapse. Others will tell you that china's economy is weak or u.s interest rates are going to continue increasing.

All of these macro situations may be true, but there's only one factor that will ultimately crash the economy, the consumer, the economy is practically purely driven by the consumer. Almost 70 percent of the us gdp is just on personal consumption expenditures. If the consumer feels weak at any point, the entire economy will fall apart. The current macro issue centers around the lowering purchasing power of the consumer.

If we all stop consuming as much and start saving the economy is going to crash. Brewery said that this is the problem: last 18 months: minus 850 billion dollars in direct stem checks, 400 billion dollars in cash out refines 1 trillion, plus in forgivable loans, with 250 to 500 billion of it fraudulent another 4 trillion dollars, indirect, etc. What recapitalizes, the consumer now higher wages, can't do that the economy is experiencing immense price increases, and consumers, like yourself, are feeling that your money is worth substantially less. This lowering purchasing power is not just anecdotal.

There is a vast array of data showing that the consumers are the weakest they've ever been the most famous tracker of consumer behavior is the university of michigan consumer sentiment index? The? U michigan consumer sentiment index is currently reaching record lows, which is clearly showing us that consumers feel weak. Another signal of the weakening consumer is the slowdown in amazon's revenue amazon's. First quarter results were horrendous, with revenue only growing seven percent year over year and earnings missing by a substantial amount. The technological age has seen amazon become the primary marketplace where most consumers purchase their goods.

Amazon's poor quarterly result shows that the consumers are in an incredibly weak situation, burley, tweeted and so amazon says to gdp. There is your weakening consumer. So, given all of this information, how has billy made millions and how can investors do the same? Brodie believes that the first economic impact of weakening consumers will be lower profit margins. This will be spearheaded by the struggle for businesses to maintain twice as high consumers are feeling weaker than ever, and this will force businesses to lower prices.

The issue with this is that wages do not fluctuate frequently, so wages will remain elevated relative to prices, because businesses will have to lower prices while still paying higher wages. Their profit margins will fall substantially. This will ultimately cause stocks to trade at lower price to sales ratios after a significant decrease in sales. Bury is preparing his portfolio to make millions, if not billions, of dollars in the next year by shorting bonds.

He revealed in late 2021 that he was shorting 30-year treasury bonds. In particular, he tweeted for what it's worth: i've, never shorted any cryptocurrency. This is my third bubble and the biggest i've learned a thing or two 30-year treasuries. On the other hand, the reason for bury to short bonds is quite obvious.

Inflation was accelerating to almost 7 percent, while 30-year bond yields were still roughly at two percent. This meant that bond investors were basically guaranteed to lose five percent per year. In the short term, bond yields and bond prices are inversely correlated, so as bond yields, increased bond prices crashed one etf that berry has purchased before is tbt, which is the pro shares ultra short, 20 plus year. Treasury etf tbt is an etf.

That short sells. A bundle of bonds bond yields have increased drastically over the past few months, due to increasing interest rates, inflation and the ukraine situation. This has caused bond prices to crash and for tbt to rally. The tbt etf has increased by over 43 percent since bury first revealed a short position.

That is already a substantial amount, but burry sees himself making even more in the future burry recently tweeted 1977 says hello with a picture of himself in 1977. This was in reference to the economic situation in the 1970s. The period of the 1970s is known as the great inflation, with inflation reaching unprecedented levels. The inflation rate in 1977 was at 6.5 percent before accelerating to over 14 by 1980..

This is very similar to our situation. Inflation is currently at roughly eight percent, but burry sees it passing 10 and maybe even 15 percent. The truth may actually be that inflation is already past. 10 percent bury is skeptical of the consumer price index or cpi.

That is used to calculate inflation. He explained how the cpi says: housing costs rose 5 last 12 months, wrong cpi would be 12 using real-world nar housing data. Bls has smoothed out housing numbers forever, because home prices have been a problem forever, so next month they will start smoothing out vehicle prices. Hashtag problem solved.

Brewery is essentially saying that the housing prices that the cpi uses are off by a large sum. The number that the cpi uses claims that housing prices only rose by five percent in the past year. This is definitely not true. If the calculation for home prices included real-world housing data, then cpi inflation would be at 12.

That means that the current inflation rate of eight percent is off by four percent. This miscalculation and other macro factors will cause the market to crash by an estimated amount of roughly 55 from the current price levels bury explained how they were paradigm shifts: speculative peaks. The s p 500 bottom 13, lower than 2002's bottom in 2009 17 lower than 1998's long-term capital management crisis low in 2002 and 10 lower than 1970s low in 1975. 15 lower than the coveted low is sbx 1862., roughly shiller pde of 16 nominal pde of 9.

In historic range, michael berry is pointing out a pattern of market crashes becoming worse and worse, as time goes on. If we assume that this pattern continues, then the s p will crash to a level that is marginally lower than the covid crash bury uses 15. As an example here to see if this would be reasonable in theory, if the s p were to crash to a level that is 15 percent lower than the previous load during kovid, then the index would be at roughly 1800 points. That is roughly 55 percent lower than the current levels and would bring the index back to historical price levels.

One of the graphs that very attached to his tweet shows the chiller pde ratio over time. The schiller pde ratio is a cyclically adjusted pde ratio, which means that it adjusts the pde ratio for inflation. We are currently at a schiller pde ratio of 36. A 55 crash would bring this ratio down to roughly 16, which is in line with the historical average brewery, also attached a graph showing the historical average for the nominal pde ratio, which is just the price to earnings ratio for the past 12 months.

We are currently at a pde ratio of 21.. A 55 crash would bring this down to about 9.. A pde of 9 would be slightly lower than the average, which bury believes is reasonable. All of this points to his prediction that the pain has not ended, yet some of you think that short-term crashes aren't relevant if you're holding stocks for the long term.

This is completely true if you're able to handle the psychological pain of your portfolio dropping substantially great companies, always experience short-term crashes and long-term gains. One example of this is amazon. During the dot-com bubble, burrie questioned: how far can the stock of a good growing company fall? One destined to be one of the greatest companies in the world remember when amazon fell 95, but the fed, but the fed didn't, have inflation like this hanging over its head, then either. If you aren't prepared to maintain conviction in the stock that drops something over 95 percent, then perhaps the stock market is not for you.

Short-Term volatility affects all investors emotionally and controlling this emotion is extremely difficult. Speaking of volatility, there's another signal pointing towards a further crash, which is trading volume trading volume tends to be higher during market crashes, because there is more activities from buyers on both the buy and sell side. The current trading volume to shares outstanding is at unprecedented lows. Bury detailed how top to bottom microsoft traded 5.2 times its shares outstanding by 2002 3.3 times that 2009 and 0.5 times so far: amazon traded 5.7 times by 2002, 6.6 by 2009 and 0.9 times so far, jp morgan, traded three times by 2002 5.9 times by 2009 And about 0.7 times so far, etc.

Enough takes time trading volume still has to increase by 5 to 10 times from its current levels. In order for the market to be similar to previous crashes, this is because the market tends to have a higher trading volume when prices are lower. In order to be in line with previous market crashes, the trading volume would still need to increase significantly. Keep in mind that michael bury is not a financial advisor.

He is simply a hedge fund manager who would profit significantly if the market crashed? You should always do your own due diligence and invest at your own risk. That being said, i would not push aside berry's predictions, especially given his track record. The traditional financial system never listens to him, which is why he recently tweeted at least i tried. Let me know if you think the big short 2 is coming soon after bury makes billions.

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