1/ Regarding my tweet about a potential 1987 tech led crash, here is a thread.
For disclosure, I do not manage money other than my own, nor do I have any insights/advantage over anyone else.
I head a secondary private mkts team for an IB in NYC & this is my opinion.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
3/ There are a number of reasons why I believe a 20-30% rapid decline may occur and it’s related to how we got here, what it looks like today and what the preset conditions were in 1987 which led to that crash.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
5/ The 3 main factors in 1987 not in any particular order were inflation fears, tax changes and portfolio insurance.
Sound a lot like today?
Inflation fears rising & will continue to if this next stimulus package gains traction. This is way too much too soon.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
7/ Tax changes. Corporate tax rates are likely to go up to either 25 or 28%. Regardless of what anyone says this is not priced in at all. I know this because earnings jumped 20% in 2018 vs 2017 and most of it was because of the tax law.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
9/ Hwang is likely a symptom of a much larger problem & much more levered system. The financing balance data proves this and there’s no other explanation for how predictable the mkt has been on a daily basis day in and day out this past yr. Randomness has been killed by money.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
11/ While we have this huge build up in leverage, liquidity has been evaporating since 2018 which undercuts the insanely strong narrative that liquidity has driven the market to new highs. Better said, leverage has.https://t.co/1TbB5F64IF
— Endless Capit🅰️l (@endless_frank) April 7, 2021
13/ Lastly, longevity from Covid antibodies/vaccines is still a ?. Are people going to want to take an MRNA vaccine every 6 months? Will this alter consumer behavior for years? I don’t know the answers, but I’m at least asking myself these questions as it relates to investing.
— Endless Capit🅰️l (@endless_frank) April 7, 2021
Mega bull Tom Lee said we could see 4200 by the end of 2021.
Reddit was like "hmm, we'd prefer to get there this week."
Anyone who traded 98-01 knows this story except this time it's 10x the bubble.
— Peak Everything now with AI & Pickleball (@brianlantier) April 7, 2021
Seriously. pic.twitter.com/fcozDsZTFu
— Dune AnaIytics (@DuneAnaIytics) April 7, 2021
$spx pic.twitter.com/GAbfQQfKlS
— Álvaro Oviedo (@alvoviedo) April 7, 2021
Whoops!!! pic.twitter.com/rhFC75fCqP
— The Great Martis (@great_martis) April 7, 2021
https://twitter.com/farrisbaba/status/1379844383927889921
dominos https://t.co/eQDpUA2K7W
— Alastair (@StockBoardAsset) April 7, 2021
Investors Big And Small Are Driving Stock Gains With Borrowed Money – When values drop the exit will be tight. @LanceRoberts @michaellebowitz @DiMartinoBooth @JackPScott @HarrisSamaras @dlacalle_IA https://t.co/NvpJufe5kL
— Patrick Hill (@PatrickHill1677) April 7, 2021
Markets are going to need a new thing.
ESG – done
Post covid growth – done
Renewables – done
Electrification – done
Space – done
Inflation – done
Crypto – done
Biotech – done
Leverage on all the above – doneWhat's the next big thing that you're sure no one has spotted?
— Polemic Paine (@PolemicTMM) April 8, 2021
Bullish?
🔹 As of March 22 2021, the number of small businesses open decreased by 35% compared to January 2020.
🔹 As of March 22 2021, total small business revenue decreased by 24.3% compared to January 2020. pic.twitter.com/PpXGAB2f9P
— Michael Goodwell (@MichaelGoodwell) April 7, 2021
1987 crash was on a Monday (Oct 19). Stocks were overvalued. Portfolio insurance gave traders false confidence. (It's always some magical thinking that lures us in too deep.) I started on Wall Street (Salomon) Oct 5 – 2 weeks prior. I've never loved Mondays since. 😍
— Wait Capital (@WaitCapital) April 7, 2021