How long are you willing to look like an idiot?

How long are you willing to look like an idiot?

1 week?

1 month?

1 year?

What about 5 years?

Are you willing to look like a fool in the eyes of society for half a decade while everyone around you calls you stupid?

Because that’s what it takes to be great.

You have to be comfortable going against the grain.

Not listening to the noise that is your parents, your friends, the news, social media and your colleagues.

Thinking for yourself and coming up with your own ideas.

Sticking around long enough to see if you’re right, but also doing enough work to understand the other side.

This always reminds me of Michael Burry.

He knew the mortgage industry was over-leveraged and started buying CDOs in 2005.

3 years before the global financial crisis, he did his research, saw what everyone was betting on and decided to take the opposite side of the trade.

But he had to wait 3 years to be proven right while housing prices continued to go up.

He looked like an idiot in the moment but really he’s a genius.

He thought about first and second order consequences to figure out what to bet on.

Even then, he didn’t know how big the house of cards truly was.

Now we’re at an even greater impasse.

So many things in the world are suggesting we’re at the beginning of a major disruptive decade.

Inflation. Supply chain concerns. CEOs of market makers lying to congress. Evergrande. China. Housing prices. Energy prices, particularly in Europe and Asia. Crypto. NFTs. Archegos. The meme stock craze.

All of it is signs that something is coming. I’ve been on record saying the squeeze of meme stocks that bankrupts hedge funds and market makers is going to be the black swan event no one sees coming. If that happens, multiple banks go under, businesses go under, people lose their jobs, they lose their houses, they lose their pensions, they lose their healthcare, they lose everything.

That’s a terrible place to be for most of society, yet there will be millions of people around the world who’s lives will forever be changed by this short squeeze. They found a loophole in the system, kept sharing their insights online and contributed to a community that’s trying to fundamentally change the way the stock market works. 

This market doesn’t work for everyone, it only works for the wealthy.

The last time wealth inequality was this bad was prior to the Great Depression. What happened after was the biggest crash in the history of the market, multiple business failures, rise of populism eventually culminating in World War 2.

We can’t have that happen again, yet depending on how the world’s superpowers react to the circumstances, that may be where we’re heading.

I’m curious to see how the US government handles this crisis. Underneath their watch, market makers have stolen billions of dollars from retail traders and mutual funds, while paying politicians to maintain their seats so they can maintain their power. Who’s going to be the politician that actually stands up and demands retribution?

Based on the last crisis in 08, both sides of the US government are corrupt. It’s all been a ploy to keep those at the top in power by bailing them out and not letting them fail. Can they do that once again? They might but then their currency is screwed. They also would cause revolutions around the world because there’s no way people will accept bailing out the banks, especially after Covid.

Alan Greenspan, Ben Bernanke, and Hank Paulson created an environment in which those at the top weren’t allowed to fail. As I saw in a recent meme, bankers take your money and keep the profits. If they lose your money, they still keep the profits.

I wish we had a time when investment banks had executives buy into the bank and risk their own money. There’s no way these bankers would take on the kind of risk they do if it was all their own capital. But because it’s other people’s money, they’re happy to monetize the profits and socialize the losses.

We can’t have a functioning society where this is allowed to exist. People are trying to survive every day and so many of them got wiped out because of Covid. They’re entire livelihood and source of income disappeared almost overnight because of lockdowns. Yet those at the top made at least 1.6 TRILLION DOLLARS IN A YEAR.

HOW DOES THAT MAKE ANY SENSE? These people have doctors on speed dial, travel in private jets, eat at the best restaurants and have all the connections to make sure they and their families are safe. Yet for most of society, they struggled to figure out where they were going to eat their next meal or how they were going to afford rent.

I feel like I’m living in my own head seeing all these things in society and having no one comment on how insane this all is.

How can we have digital pictures of rocks that sell for 1.3M dollars? How is that reasonable?

This has happened before in history with the Tulip bubble, the South Sea bubble, the Mississippi bubble and just prior to the Great Depression. Every time environments like this occur, it always ends badly for society. Long term it’s good because things can become normalized again but we have to go through a period of great turmoil before we can get there.

Figuring out how it’s going to play out is going to be fascinating because there’s a lot of money to be made during crashes. 

When you think the whole world is nuts and bet against them, sometimes you’re right.

But you have to be willing to look like an idiot in the process.

Let’s see if I’m right. I’m happy to wait as long as possible.