Hedge Fund net exposure readings are available in Prime Broker reports. Currently, institutional net exposure isn't that high on a historical lookback. They've essentially been forced to chase since April (the market movement since then has essentially been a large front-run until recently). They are at high gross exposures though, so their contribution to the risk landscape has been, well, what we've seen in the past few days with a huge rotation/unwind under the hood, with mild net selling but large amounts of reshuffling.

Bank balance sheets are conservative currently.

>It'll pop, the question of course is when? Ponzi's can go on for decades before something breaks.

Tautological. Broken clock right twice a day, etc etc. We had a massive collapse in March 2020, and in 2022 when the banking system was pseudo-nationalized/backstopped. If you're still waiting for "the collapse", it begs the question about how one was positioned for those events. Frankly, I saw many people cruise right through 2022 without ever switching to bullish, even when Meta was single digit forward PE and such. As someone who was managing a portfolio that heavily deployed after the Fed backstopped the banking system, I clearly remember that this moment (which was one of the best moments to buy in the last decade, and offered a long list of ludicrously low valuations, especially on the fringes ex: I was buying Chinese companies for less than half of the valuation of the cash on their balance sheet, with the actual business with PE under 5 included for free), retail and institutional sentiment readings were the most pessimistic since the Great Depression. Likewise, stepping away from the AI bubble there is a long list of extremely low valuations in the current market (companies with PE under 8, buying back 15% of its shares every year, for example, or energy companies sub-10 PE with conservative balance sheet management, which has been a huge positive shift in the industry, yet everyone wants AI stocks at 300x forward earnings).

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icedchai 3 days ago | parent | next [-]

Those collapses were great buying opportunities.

During the pandemic, I bought energy stocks near the bottom. Remember when the price of oil went negative? I was watching CNBC at the time. I felt either the world was ending and none of this mattered anyway, or it was a great time to buy. The fund I bought (VDE) is now up almost 150%. And I'm getting a great dividend, relative to my initial investment.

I got good deals on AMZN, GOOG in 2022. Bought them all under $100. I got a good deal on AAPL, too.

The banking problems in 2023 was a good time to get into bank stocks. I started averaging into a regional bank fund and it's done quite well.

My advice to the average retail investor is simple: don't panic.

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everybodyknows 3 days ago | parent | prev [-]

> energy companies sub-10 PE with conservative balance sheet management

Hmm ... so for us inattentive investors, buy VDE?

	▲	Fade_Dance 3 days ago \| parent \| next [-]
		Normally I would say stock picking is a fool's errand, but in this specific example, the appeal really is in the dramatic shift in management in some (but not all) of the energy sector post 2020. For a long time, all of the money went to holes in the ground. They also raised massive amount of debt, which again, went to holes in the ground. Now it's in vogue to focus on shareholder returns, which may seem "normal" for US corporations, but these guys and gals loved drilling holes with reckless abandon. To do it the easy way, maybe a quant factor overlay with Quality factor? I'm sure there are ETFs doing that for low fees. But the juice is really from the smaller and midsized companies which still trade at a discount because of the expectation that geopolitical risks and lower oil prices will cause havoc in the sector, and then you drill into the earnings call and the CEO is going "we've frozen over half of our planned investment, have redirected some of the cash to increase efficiency of older sites to boost efficiency at the expense of growth, and all cashflow is being split between paying down debt and buybacks." Suddenly the outlook becomes considerably brighter. I just have a small basket that passed all of the screens, and check in every earning's call to make sure they aren't drilling too many holes or doing obscene M&A from boredom. It's a complex industry, but it's also a simple one. Mostly comes down to drilling holes...
	▲	icedchai 3 days ago \| parent \| prev [-]
		Hahhh... I did exactly that in 2020 near peak COVID.