What do you think is the reason the mother of all crushes is about to burst and take down with the entire market.

He also called it the greatest speculative bubble of all time in all things.

Last year, his portfolio consisted of 11 stocks worth over $165 million.

But Q3 filings show that he has sold more than a third of his portfolio using his portfolio to a little over $42 million dollars comprising of just six stocks.

If he was just a random guy, I would not give him much attention.

But Michael Burry isn't your typical investor back during the dot com bubble.

He predicted the crash and bet against the market making millions of dollars, purchased a stake in Gamestop before it went viral, bankrupting hedge funds that shorted stock, but that's not what made him so popular.

His biggest move was back during the housing crush.

After analyzing the market, he saw a bubble that was about to burst.

So he bet everything against the housing market, which at the time people thought he was stupid.

But as it always happens, the bubble burst and Barry made a fortune both for himself and his clients.

So if Michael Barrett sees the bubble, there is a good chance that a bubble is forming.

You don't have to be a genius to understand that Fed's actions in recent years caused the bubble.

It is just a bubble in one particular industry, the bubble is formed in everything.

House prices are up by almost 50% in two year.

Kryptos are hyped and worth trillions of dollars without really adding any real value to the market stocks, doubled in price is due to access to cheap money.

The entire market is turned into one giant bubble or as Michael Barry calls it the greatest bubble of all time.

We still have no idea when it will burst or how, but we know for sure that it will be painful.

So let's find out which talks billionaires are selling what kind of assets to billionaires hold during these uncertain times.

And when will the mother of all crushes First.

We'll answer for all of these questions and many more.

But before we do that, give this video a thumbs up and let's dive in.

Since the second half of 2021 billionaires have been massively selling stocks.

Why?

Because everyone is expecting a crush.

They were right because the market actually crushed.

The only problem is that that is not the end.

Google founders, Larry page and Sergey brin sold around $1.8 billion worth of stocks.

Each.

Jeff Bezos is the world's second richest person has sold more than $9 billion in amazon stock.

Ellen Mosque world's richest person sold around $12.7 billion worth of Tesla shares, America's billionaires have sold $43 billion $20 billion 2020 according to Bloomberg Warren Buffett is sitting on a stockpile of cash worth over $30 billion.

Even though we have almost double-digit inflation It is true that it is not as much as last year since he has invested a lot into oil and gas since the energy sector is booming now, oil companies are making some of the highest profits ever.

That will probably continue for another year or so.

But $30 billion dollars is still a lot of money.

But why aren't there investing that cash isn't holding stocks better than cash?

Well, the answer is both.

Yes and no.

You see a dollar today worth more than a dollar tomorrow.

And making money is the most important aspect of any business.

Of course, you can make whatever argument you want that the purpose of the businesses to build quality products, make the world a better place, fill the blank however you want.

But at the end of the day, investors, primary concern is money.

So the financial aspect is the most important one.

That's the entire purpose of capitalism.

But not all money is equal.

If a business makes money now, it is worth a lot more than a business that will make money in the future.

You can take that money invested somewhere else and make more money.

Time equals money.

So if we want to find out the value of future cash flow, we have to find its NPV and how much the future profits will worth today, there's a pretty simple formula that we call DCF discounted cash flow.

The formula is one divided by one plus interest rate.

To the power of the period where n.

Is the year for the sake of simplification.

Let's say that their interest rate is 5% which will be our discounted rate, let's say a business makes $10 million over the course of the next five years or $2 million each year.

If we apply our formula, the $2 million that the company will earn.

12 not from now is worth $1.9 million in the next $2 million.02 years from now will worth $1.8 million.

The third one point 7/4 1.64 the 5th 1.56 all in millions.

If we add them up we will have a total value of approximately $8.6 million.

So the company might earn $10 million.

But because it's five years from now, it is real worth is $8.6 million.

So when the Fed raises the rates, what happens to that discounted rate it rises which makes future cash flow less valuable than today, which pushes stock prices to plummet especially tech stocks that are often focused on making a lot of money in the future.

After gaining market share At the time of me writing the script, interest rates are about to 25% to 2.5% but inflation is still high, it's around 9% and Jay Paul is shouting that he will do whatever it takes to bring inflation to a sustainable rate of 2-3%.

What does that mean?

Exactly?

Super high rates for super long.

Maybe it will be like it was back in the 19 seventies and what does that mean?

Future cash flow will become significantly less valuable, which means companies will become less valuable, which means stocks will crush.

Of course the businesses that will put money on the table now will flourish.

But if we're talking about tech companies like Tesla google and meta, their bet is always in the future and it's not going to be just another crush, 80% of all money was printed between 2020 and 2021 it didn't just create enormous inflation but bubbles across all industries, we have a crypto bubble, real estate bubble, stock market bubble, you name it, that's why Barry firmly believes that the greatest crush is underway and that's why he and other billionaires are selling as many stocks as they can.

They can't sell everything overnight because that will create an oversupply in the market and crush the market anyways, so no one wants to see that on top of that a crush doesn't mean the end of the world.

It just means that you have to wait a few years before practice climb back After the 2008 crash.

Within five years, prices rose back to the 2007 peak.

So whoever purchased a property even at the peak of the housing bubble profited by 2022 time heals everything.

But it's only resource, but it's only resource.

We cannot produce more of it.

The only stock that Michael barry didn't sell is G or group, a public company that invests in private prisons and mental health facilities in North America, Australia, South Africa and the United Kingdom.

That doesn't inspire a lot of hope.

Like barry is confident only about one thing people will keep going to jails, especially when the mother of all bubbles crushes Michael barry is more of a trader than a long term investor.

He is shorter.

Tesla made money on Gamestop and actively trade stocks, which is not an option for most people to fall A buffet methodology is way more practical for your average fork.

He has invested in companies that are making money now.

Companies that can raise their prices regarding of the crisis such as oil and gas companies, necessities like iphones or macbooks or undervalued banks such as Ally Financial as we have previously mentioned on the channel.

Every crisis presents an opportunity.

The entire world is suffering from inflation but oil conglomerates and cheap manufacturers are making fortunes.

That's it for today.