Hedge funds are not smart money.

High exposure to the stock market in 2007 was just prior to the global crash.

High exposure in 2015 was just before the Emerging Markets crash, US stock correction & commodity bust.

Record exposure today is just prior to...
I’m really surprised at the outright speculation in recent quarters.

Persistent amount of call buying over puts was last seen during the late 1990s and (eventually) ended in a huge crash.
There is complete disconnect between the economy and stock earnings on one side,

And prices / valuations that investors have pushed share prices on the other side.

Even on forward earnings!! markets look ridiculously unattractive.
Insiders, the smartest money out there (unlike hedge funds) are offloading stocks like almost never before.

They bought a lot in March 2020, but have really been selling with both hands since November 2020.

By some measures, insider selling is intense like early 2007.
With their career at risk, fund managers are pressing the long exposure to the MAXIMUM!

At the bottom of the GFC in late 2008, they were taking -60% lower than normal risk — best time to buy!!

Today, they are taking 25% higher than normal risk — best time to sell??
“People say I didn't warn last time.

I did, but no one listened.

So I warn this time. And still, no one listens."

— Michael Burry

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More from @TihoBrkan

20 Feb
If you:

1. work with extremely experienced construction team

2. take on minimal leverage

3. meaningfully save on hard costs (expensive materials) & soft costs (inhouse architecture)

4. buy sites from motivated sellers with unlevered profit on cost >30%

You cannot lose money.
Incase you’re wondering what happens during the worst downturns you will:

• have meaningful margin of safety from your initial purchase (you make your money when you BUY)

• even if prices decrease broadly, I’ll be adding additional value to your site
• safe with a minimal debt discipline by never putting your principal at risk & remaining in control of the project

• be making a substantial saving into your bottom line, either with in-house architects + designers or by keep expensive materials like marble & parquet at cost
Read 5 tweets
15 Feb
In the US, the real estate tax code is written in a way twisting investors’ hands to always be exposed only via equity.

However, this is not the case in other jurisdictions.

We make a case that mezzanine debt is the most versatile exposure throughout the whole cycle.
In a perfect world:

• at the early stage of the real state cycle be accumulating at depressed valuations

• at the mid-cycle continue accumulating, while also lending via mezz debt

• during the late-cycle stage lending via senior & mezz debt, with rare if any equity exposure
Deal selection will always be the most important aspect of the alternative asset capital allocation process.

We have a saying: #greatdealsonly which means we will search far & wide, and look at 100s of opportunities, before deciding to expose to a single one.
Read 5 tweets
14 Feb
Fantastic place to turn off the noise for the weekend.
🏄‍♂️ 🤙🏽

Not only in Burleigh Heads or Uluwatu.

Also in Malta.
Read 4 tweets
9 Feb
This was our call a year ago...

Contrarian investing at its best.
Not only has the medical cannabis ETF gone up a lot from its depressed lows,

But the $USD has gone down a lot vs the Canadian Dollar.

That’s what we call a one-two punch!

#greatdealsonly Image
My mentor used to say:

Timing isn’t everything, it’s the ONLY thing.
Read 4 tweets
5 Feb
A fierce case of FOMO is fuelling one of Brisbane’s biggest housing booms in years with open-home inspections looking more like a scene from The Hunger Games as desperate buyers treat dwindling stock like languishing loo paper. domain.com.au/news/brisbane-…
An explosive year of growth has spurred property prices on the Sunshine Coast and Gold Coast to new record heights, with a wafer-thin slice of beachfront paradise now fetching millions.

Thread from 2019 outlining:

a) up and coming shortages QLD will face (upward price pressure)

b) relatively attractive pricing vs Sydney & Melbourne (underpinned by continued interstate migration)

Read 5 tweets
31 Jan
Hedge funds and other speculators are holding over $35 billion in net short positions, betting against further declines in the US Dollar.

Often, that has led to a short squeeze and a rise in the exchange rate; and often a $USD rally is negative for risk assets (stocks).
The majority of the short positions are skewed in three currencies, though.

The Euro, Japanese Yen, and New Zealand Kiwi Dollar.
Have we seen a regime change (change in trend) for the USD?

If true this will have a major impact on various asset classes & regional economic growth in the world.

History shows during $USD downtrend lead to European real estate + Emerging Markets & Asian stocks outperformance.
Read 7 tweets

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