The Benefits Of A Market Crash

As Warren Buffett says: 'It's only when the tide goes out that you learn who has been swimming naked.'

The Benefits Of A Market Crash

One of the benefits of all these 'limit down' days is that the market is going to wipe out (and probably has already started wiping out) a lot of really dumb money that have looked like geniuses throughout this last 11-year bull market.

Dumb Money

Over the last 11-years, the dumber you were, the more money you 'generally' made.

The sexiest-hight flying businesses have been the best performers. The higher the multiple, the better the performance.

The Index Fund Bubble

Many smart people have had their funds destroyed because they couldn't keep up with the momentum investors and passive investing bubble in ETF's and index funds. Michael Burry has talked extensively about this over the years. See the article, here.

Going Forward

I think it's likely these past few weeks (and potentially upcoming few months) will wipe out a lot of this behavior as liquidations continue.

(Disclaimer: Not investment advice)