Michael Burry, you know, the guy that shorted the housing market in 2008 and got mega famous
for it? Well, him and his hedge fund made billions
from doing that one simple trade. Billions. With a B.
And funny enough, he s showing signs that the same exact thing is about to happen soon.
And I TradingLab, plan to take advantage of this opportunity.
So I took a couple weeks and really dove and researched everything I could about this topic.
Is the housing market really going to crash? Well, I m going to share with you guys what
I found and my exact trading plan that I m going to execute.
This is either going to be the best investment I ve ever made in my trading career, or the
absolute downfall and I ll embarrass myself all over YouTube. Either way, I m pretty excited.
So while Burry is saying we are about to have another crash. We have to understand something
very important, this current crash is not at all like the crash in 2008.
How not? Don t they both include houses? In 2008, the realestate market crashed because
banks were giving home loans to people who couldn t afford them at all.
But in today s world you can kind of see that banks learned their lesson from 2008. And
arnt giving out loans willy nilly. So if they aren t giving out bad loans, how
is the housing market suppose to crash again like it did back in 2008?
To find that answer, we have to rewind a bit. (rewind)
So as we all know, corona hit. Absolutely demolishing peoples incomes, the stock market,
and closing down thousands of businesses. So how did the government decide to fix this
issue? Just print more money. Yeah, that ll fix it.
What they also did to help families and businesses, is to make it basically free to borrow money.
Interests rates were at an all time low back in 2020
So if you wanted to go get a loan for toaster. I mean, I don t know why you would get a loan
for a toaster anyways, but let s just go with it.
When you went to the bank to get that toaster loan, interest rates were so low, that you
could basically borrow that money for free. So, that s exactly what a lot people did.
Borrowed money. And you know what they did with that money?
Bought things. So what happens when the FED prints a ton
of money, people start getting stimulus checks, and businesses can borrow huge amounts of
money for basically a bag of popcorn? Well, the stockmarket SKYROCKETS.
(stockmarket montage) So while everybody is enjoying their huge
gains, from the stock market hitting all time highs. Companies are loving their lives because
they can borrow huge amounts of money for basically no costs.
Jerome Powell, the guy that controls the money maker machines. Well, let s just say he went
a little too crazy with that money maker machine. We printed 40% of all US dollars in the span
of 12 months (laughs) And you know what happens when you print that
much money out of thin air and have extremely low interest rates?
*Inflation enters the chat* Inflation.
Prices for gas, food, EVERYTHING has been going up.
So if we don t want to end up like Venezuela where a loaf of bread costs $900,000. We had
to do something, and we had to do something fast.
So the only way to get around this, was by increasing interest rates.
And this is where my plans start to begin. (insert ad)
So when interest rise, that means your loans, they become more expensive.
So for example. Say if you bought a home back in 2020 when
interest rates were extremely low. You bought a house for say $750,000 and at the time interest
rates were only 2%. So your monthly mortgage payment was only
$2,700 which you could afford that. But then as we fast forward and interest rates
start rising extremely rapidly. You re $2,700 monthly payment, just became
$4,500 today. So if you bought the house thinking you could just barely afford the $2,700 monthly
payment, you are definitely not able to cover the $4,500 payment that it is today.
And what make s this even crazier, you re not only one.
So now there s not as much demand for these crazy expensive homes, and when there s a
lot of supply of something, like houses. And not a lot demand for it. Prices go down.
And that s exactly what s happening as I m making this video.
And on top of that, the housing market is already so inflated that prices are already
way overpriced. For example, this house in santa cruz, California
sold for $1,025,000 last October. I wish I was kidding.
So yeah, its fair to say the housing market is inflated, and with these current interest
rates, people wont be able to afford the houses they once could, and more importantly, people
that want to buy house, are going to have search for cheaper ones.
So realestate agents are going to have a tough time selling their houses, and are going to
have to drop their prices. If you sold house back in 2020, you could
list it on Zillow, eat a bag of chips, and by the time you were done with chips, your
house would of sold. If you tried to sell a house now, well, lets
just good luck. So obviously I have a pretty pessimistic view
of the housing market in it s current state. And who knows, this housing bubble might not
even be a bubble and housing prices will just continue to flourish. Forever.
That could be a possibility. But with everything that I just stated, I really doubt that s
the case. And I m going to put my money where my mouth is.
Now there are a lot of ways to do this. Now the way I m choosing to do it is probably
one of the stupidest/degenerate ways you could do it, and probably the most risky, but fc
it. We re here to make money right?
Now you may be asking. How are you going to short the housing market?
Well I m actually going to be showcasing all of my investments on Gainy.
Gainy is basically an app that helps you invest in the form of thematic stock collections
around an industry, rather than an individual stock.
So if for some reason you think the crypto mining industry is going to go up in the near
future, they have a section of popular crypto minging stocks that you can invest in.
Gainy will actually keep track of the performance of these stocks and remove or add stocks based
on their performance. So your portfolio is always optimized, and up to date as it can
be. You can also filter your stock portfolio based
on your interests, your financial goals, or even your risk profile.
So if you re a little more risky, you can have a portfolio with huge potential gains,
but it s a little more on the risky side. If you want to stay on the safe side of investing,
you can filter your portfolios through that as well.
So I actually made my own portfolio on gainy where you can see all the stocks I m investing
in for this potential housing market crash. And even see how they are performing since
the making of this video. So if you want to go check out my portifolio
I ll leave in the description. And if not, I still encourage you to check out the app,
because it can give you some pretty good investment ideas.
So yeah, Ill be showing everything im investing in for this video on gainy.
But here s an example of one of the investments. Ticker DRV.
DRV is an ETF that takes an index of large US realestate companies and allows you to
short them by just buying this stock. This an inverse ETF.
So what that means, is if the housing market goes down, this ETF goes up.
And if you look at this chart, there s a lot of room for it to go up. A lot. Of room.
What make s this so risk though is this ETF is a 3x leveraged etf.
So say if the companies that make up this ETF go up 1%, DRV will go down 3%.
So yeah, it s pretty risky, but so was shorting the housing market in 2008.
I ll be putting down $5000 in this ETF and the other stocks that I ll share on Gainy.
If you guys want to stay up to date with my investment and how it goes you can either
track it on gainy or I ll be giving updates on my Instagram.
Wish me luck boys.