Key insights
- The author expresses concern about peak euphoria and a potential market bubble, particularly in semiconductors. They highlight the widespread acknowledgment of a bubble without corresponding selling as a confirmation signal. The author points to Michael Burry's warnings and Berkshire Hathaway's large cash position as contrarian indicators, suggesting a possible market correction is on the horizon. The overall tone is bearish, implying a negative impact on US equities.
Nobody exits first. They all exit simultaneously.
Let that sink in. (Insert Musk meme here)
I’m seeing a lot of peak euphoria sentiment across boards. The meteoric rise of semi’s and memory tickers is quite amazing. Just looking at a 1yr chart looks like something to be reckoned with.
The widespread acknowledgment that it’s a bubble without corresponding action is itself the confirmation signal imop. In 1999 people debated whether it was a bubble. In 2006 they debated housing fundamentals. Right now people are openly calling it a bubble and buying anyway.
Everyone always neglects the ones who call the signals. Burry is once again writing it “feels like a bubble” and he isn’t wrong. It’s just easy to call him wrong because his contrarian ways can often be neglected. Berkshire’s massive cash pile can be looked down upon, saying “Think of how much they could have made if they just would have put it into INTC?” WOW, did they miss out?
It’s always, “yeah it’s a bubble, but we’ve got time. It won’t burst for a year or two.”
Stability breeds complacency breeds risk-taking breeds instability.
The “it won’t crash yet” sentiment is my own indicator.
What is yours?
Are you buying into the highs?
Or are you doing something different than the crowd and not jumping on the same wagon?