Legendary Stock "Suit" Flips | Market Bottom vs TOP *Exposed.*

oh my gosh i never thought i would see

the day folks you know that i use the

bloomberg terminal i do a lot of

research on the bloomer terminal i do a

lot of research on refinitive which is

the reuters version of that i also go

through hedge fund letters and bank and

letters i mean i i'd go through hours

and hours of research every single day

this is one guy

who's been like this perma bear

all year long he's called the macro man

and he does this like twice a shall we

call him where he basically poops on the

market and he's been so freaking

negative all year long and you know what

rightfully so i started the year out

really negative as well but then i

started seeing the light at the end of

the tunnel and now i'm like 94 in the

market and the cash i have is probably

gonna just go into the series a that

we're launching and then basically i'll

be all in right so so like obviously at

some point i u-turned and became bullish

again which is what i said i would do at

the beginning of the year i'm like i'm

going to sell sit out some of the pain

and then rebuy okay great so

what happened with this mr macroman

that's so interesting

and what does it mean about the

potential bottom of a market

is he potentially a signal

that the u-turn is in

well i want to show you his article

because i have to say there are so many

lessons in this you're going to explode

okay maybe not but take a look at it

okay we'll go through it together

he says one of the biggest challenges in

the investment game is to properly

synthesize and assess the flows of

incoming data this is a really good

point because it's like there's so much

freaking data it's quite rare for

developments to tilt entirely in the

direction of one's investment thesis

that's true you might be really bearish

on the market right now but then there

are bullish things going on it's like

damn you know that doesn't line up right

it nothing ever is always in one

direction and he says ultimately

investors have to make a decision he's

basically prepping for his flip-flop

okay it's glorious so we have to go

through it

investors have to make a decision about

whether to change their position

observers on the other hand merely have

to determine whether to change their

view so he's making this argument that

like people who just observe the market

uh maybe like reporters or people who

make youtube videos that don't actually

put their money where their mouth is

like they just kind of talk about it

well they could just kind of talk about

what's changing but investors actually

have to make a decision do you put your

head on the line and make a move and

then tell people about it right

for the most part this year this column

has sketched out a pretty negative

framework for equities and risky assets

that view was being challenged however

as the s p just put in a pattern of

behavior that marked

five of the most significant market

bottoms

of the past 50 years

you don't have to this this gets so

fascinating i mean i love what he did

here basically i'm gonna i'm gonna

scroll past this next stuff here about

people like basically wanting to protect

their brand because they don't want to

change their opinion you know people

don't want to be defined a flip-flopper

and that's basically what he's saying

here like there are plenty of market

participants who basically only present

facts that support their publicly

disclosed thesis because if you talked

about other facts well then then you you

would be contradicting what your

position is right i don't want to do

that ever like if if i see something

that's like gosh damn

that that doesn't align with my thesis

then i have to actually look and go well

maybe it's time for me to flip flop

right and this is what's so fascinating

about investing anyway this guy been

super bearish right okay listen to this

this is remarkable so what he did is

watch this watch this how often has the

market followed up a huge monthly

decline with a rally of a similar

magnitude going all the way back to 1928

this person filtered every occasion in

which the s p 500 followed up a monthly

drop of at least seven five seven point

five percent so let me make that really

really close crystal clear what he did

is he basically filtered the s p 500 and

said hey give me months that had a 7.5

decline

then show me

times like years periods of time where

the very next month was up

7.5

this is literally what just happened

okay

june to july negative 7.5 up 7.5 that's

a big deal it's a big move

and the returns before the war right

here were kind of bad they were pretty

paltry in fact if you look at the

returns before world war ii you'll see

that 12 months out in 1931 you would

have lost an extra 70 percent an extra

17 percent 33 an extra three percent

over here when that happened again in 33

you would have gotten 12 percent return

only after being up 35 after six months

but then ending up only 12 up after a

year in 1938 so not so great right like

before the war before world war ii not

great in fact after a year here you had

that one percent negative one percent

return in 1940 but then

when the fed actually started getting

more active look at the second half

right here look at this

after the fed's involvement in the

market

you basically in a one three and six

month period almost always had positive

in fact let me highlight the positive 3

6 12 positive 6 and 12 positive 1

positive all positive in 2009 all

positive in 2019 all positive in 2020.

you only had a one month period here in

74 and a three month period here where

you actually had a negative return look

how freaking green that is like i

shouldn't even have fetty easing in that

same color there so let's hide this

this right here

bullish this is great and i love that he

eats it because he says it here in fact

if you take a look at the 1974 to 2020

average it's positive all across on

average but before the war it's actually

negative kind of interesting okay but

anyway listen to this

the columns in this table okay well i

already explained what all this says oh

yeah look at him put this on a chart

okay like if this doesn't make you

bullish if this doesn't make you wanna

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when you see it but look at this chart

oh my gosh

okay

here we go

s p well s p 500 monthly rallies of 7.5

following loss right where were those

okay where were those folks look at that

the depth right here

the depth

right here that was in the early 70s

this is by the dot-com bubble this is in

2000 excuse me 2009 this over here in

2019 and 2020. folks if you literally

want

a post world war ii a market a bottom

indicator

it is

literally

this

a negative 7.5 month at least a negative

7.5 month followed by at least a

positive

7.5 month and so what's really kind of

interesting about this is after this he

says anyone running money now has to

decide whether the price action of the

past couple months and the precedence of

the last 50 years have any revelence for

a change in investment stance

really interesting these days my job is

a bit easier it's to help you the reader

make the most informed decisions this

guy's great i really really appreciate

this person and even though i don't

always agree with everything he says i

love reading his perspective and he's

basically telling you like you gotta ask

yourself like dude

when the macro man flip-flops and like

oh damn maybe the bottom isn't

maybe it's time to start scratching your

head and wondering

why are you sitting around

get in the freaking market i don't know

this was really exciting me i had to

share it hopefully you found it helpful

let me know what you think by going to

metcalf.com chat which is our discord

tag me and let's chat it up thanks

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