Reasons to be bearish 🐻

If you want to make money, you need to focus on facts. What happened, what’s likely to happen, and what probably won’t. The market doesn’t care about your feelings or hopes.

🤔 To be objective, always ask yourself, what if I’m wrong? Even if you’re bullish, search for reasons to be bearish to avoid bias.

Here are three recent developments worth noting 👇

1️⃣Hedge funds are shorting at the fastest pace since April, especially in tech. Goldman Sachs data shows aggressive de-risking even as indexes hover near highs. Big funds are clearly hedging against weaker earnings or a revaluation of overpriced growth stocks.

2️⃣Michael Burry, the man behind “The Big Short,” placed 80% of his portfolio in puts against Nvidia and Palantir. His view is that AI might be real, but valuations aren’t. When someone who predicted 2008 bets this heavily on a correction, it’s worth noting.

3️⃣Warren Buffett is sitting on a record $381B in cash while selling stocks. When the world’s most famous and patient investor refuses to buy, it’s not bullish. He’s clearly waiting for better prices and a reset.

All this is happening while crypto moves in lockstep with U.S. equities and often underperforms. If the AI narrative breaks and the S&P corrects, crypto won’t be spared 🔽