HODL is a strategy, selling the rally is the exit | Crypto & macro analyst | Decoding BTC, Fed policy, inflation & global capital flows | CPA | CMT | Sydney🇦🇺
Sydney, New South Wales
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Luc Auffret
MARKETS DON'T CRASH. THEY MEAN REVERT.
One of the most common sayings in investing is "time in the market, not timing the market."
And honestly, I think it's one of the most misleading sayings in investing. It completely ignores valuations, market cycles and the price you're paying for an asset. Whether it's property, equities, precious metals or commodities, they all go through the same process. Markets are forward-looking. Investors price in years of future growth, and during major bull markets, prices can run well ahead of their long-term averages. Eventually, they get too expensive. And what happens next?
MEAN REVERSION.
I've studied markets across multiple asset classes for years, and one thing I've learned is that what people call a "crash" is often just an asset returning towards its long-term average.
It probably should never have reached those extreme prices in the first place.
LOOK AT 100 YEARS OF THE S&P 500
The chart tells an incredible story.
Look at the red circles.
1929, the late 1960s, 2000 and now.
These were periods when US equities were historically expensive, following enormous bull markets. What followed those earlier extremes? Years of disappointing returns, particularly once inflation was taken into account. And here's what people often miss. Markets don't always need a massive sell-off to reset valuations. They can correct sharply, or they can spend 10 to 15 years going sideways while earnings and fundamentals catch up.
Either way, valuations eventually reset.
NOW LOOK AT THE GREEN CIRCLES
These represent periods when valuations were much more attractive.
Think about the early 1930s, the 1940s, the early 1980s and the GFC.
Investors buying around those major valuation lows generally enjoyed much stronger long-term returns.
Same market. Same companies. Completely different starting valuations. That's why I believe the price you pay matters enormously.
WE'VE SEEN THIS EVERYWHERE
Remember the Nasdaq in 2000? It fell nearly 80% from its peak. People called it a crash. I see it as mean reversion. Technology valuations had become completely disconnected from reality. Look at silver's recent run towards $120 and subsequent fall towards $55. Again, people call it a crash. My view? It simply ran too far, too quickly. Even US property during the GFC followed a similar pattern. Land values in many markets had become extremely stretched relative to historical norms, and the subsequent correction helped unwind those excesses. Different assets. Different cycles. Same underlying behaviour.
SO WHAT ABOUT TODAY?
Look at the Shiller P/E ratio on the chart. We're sitting around 41. That's historically expensive. 2nd highest in history. Now ask yourself something. If you had a large amount of capital to invest today, would you rather buy equities when they're historically expensive or when they're historically cheap? It's the same question I'm asking about Australian property. Are we looking at historical buying opportunities, or are we looking at markets where years of future growth have already been priced in?
Warren Buffett built much of his investing philosophy around the idea of a margin of safety. Why shouldn't we apply that same thinking to entire asset classes? I'm not saying markets can't continue higher from expensive valuations. Of course they can. But the more expensive an asset becomes, the more future growth you're paying for today, and the less room you have for things to go wrong. And when the cycle eventually turns, you need to be prepared to weather the storm. Because what the headlines call a crash may simply be the market returning to a more reasonable valuation.
The biggest risk isn't necessarily a market correction. It's paying too much for an asset in the first place.
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🚨 MICHAEL BURRY'S AI SHORTS ARE FINALLY PAYING OFF 🚨
"The Big Short" investor has been betting against AI all year.
This month, it started working!
Here are his winning shorts 👇🏻
1/5 Micron $MU
🔴 15.0% down since
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- born in South Africa
- moves to North America
- co-founds Zip2 in 1995
- sells it to Compaq for $307M
- founds in 1999 merges it with Confinity
- the company eventually becomes PayPal
eBay acquires PayPal for $1.5B
- becomes a multimillionaire before 32
- founds SpaceX in 2002
- wants to make humanity multiplanetary
- invests in Tesla in 2004
- co-founds SolarCity in 2006
- Tesla later acquires it
- SpaceX develops the Falcon 9 rocket
makes reusable orbital rockets commercially viable
- develops Dragon to transport cargo and astronauts
- helps restore crewed orbital launches from US soil
- co-founds OpenAI in 2015
- leaves its board in 2018
- co-founds Neuralink in 2016
- wants humans to control computers using their brains
- launches The Boring Company
- starts building underground transportation tunnels
- SpaceX launches Starlink
- deploys thousands of satellites into orbit
- brings internet access to remote areas worldwide
- expands into batteries, solar energy and grid storage
- buys $1.5B worth of Bitcoin in 2021
- buys Twitter for $44B in 2022
- fires thousands of employees and renames the platform X
- founds xAI in 2023
- launches Grok
- wants to send humans to Mars
- launches the first flying car
Elon Musk
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The AI selloff is being sold as “stocks got too expensive.” Bu the real story is actually debt and here’s why 👇
🤖 The AI boom was built on cheap borrowing and data centres are financed with it. Rates just hit a 2007 high, and cheap borrowing is gone. So the market is stress-testing the most leveraged builders first.
💣 The epicentre is CoreWeave: 🔻down ~25% in 5 days, its bonds yielding 15%+, credit markets pricing a 60% chance of DEFAULT. Its GPU-backed financing is drawing comparisons to 2008 subprime.
$NVDA Nvidia’s slide 📉 and cooling IPO valuations are what you see but underneath is leverage meeting higher rates.
🩸 U.S. STOCK MARKET IS IN SERIOUS TROUBLE!
Over 5,000 stocks are down more than 20% from their 52-week highs!
Hotter than expected CPI and PPI data fueled this week's selloff.
U.S. Treasury yields have also surged, raising fears of further Fed rate hikes.
Higher rates could drain liquidity, putting more pressure on stocks and Bitcoin.
With markets closed for the weekend, we could see further selling when trading resumes next week.
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Paul Tudor Jones just said he’ll be short US stocks all of 2027 — and when a legend like him speaks, you listen.
Here’s why! 💡This is the man who called the 1987 crash and shorted the Nasdaq in 1999.
His read is sharp: a coming wave of AI share supply — big IPOs, lockup unlocks flooding the market, just like the issuance that made shorting easy in 2000-2002.
❗️But notice his discipline. HE isn’t shorting yet. His call is 2027, at 60-40, waiting for the catalyst.
That caution is everything. In 1999 the market “felt expensive” too then ran another ~80% before it broke.
Expensive can stay expensive, and get more expensive.
🔥BILLIONAIRE PAUL TUDOR ON SHORTING STOCKS IN 2027:
“I'm sure...I’ll be short the whole year.”
“It still feels like 1999,” he said, comparing today’s AI market to the year before the dot-com crash.
"If I go back to 2000, you had all this issuance, all these IPOs in 98 and 99 and really 2000, 2001, 2002, those were the easiest years to be short."
He expects new AI shares would flood the market in 2027, pushing prices down and helping shorts profit.
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BREAKING: The S&P 500 officially posts its worst day since July 29th, erasing -$800 billion of market cap.
Inflation is rising again in the US, now nearly double the Fed's long-term target.
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Gold is climbing again after the hot inflation print and sharp sell-off. Behind it sits a problem the Fed can’t hike its way out of.
Warsh is read as a hawk, but he's boxed in. With 🇺🇸US debt north of $40 trillion and interest costs over $1 trillion a year, he simply can't afford to fight inflation as aggressively as a true hawk would. ⛔️Hike too hard and you blow up the debt and the bond market.
Is the Fed still choosing to fight inflation, or starting to protect the bond market instead? That’s the question worth asking ❓because the day the Fed stops fighting inflation and starts shielding the bond market is the day gold re-rates.
Gold is rising again after yesterday's hot inflation print.
I don't get why people think Warsh is a hawk and therefore bad for gold.
If he were serious about fighting inflation, he would have hiked more aggressively... 25 bps is ridiculous.
Warsh might want to be a hawk, but he is constrained by US debt and deficits.
Whether he wants to or not, he will eventually have to sacrifice the dollar to save the bond market.
We don't own enough gold for when that happens.
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🚨 BREAKING: Bitcoin flash CRASHES -$1,500 in just 10 minutes, plunging below $81,000 as Ethereum drops below $2,350.
Nearly $1 BILLION in positions liquidated in the past 24 hours.
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OMG - WHAT AN EMBARASSMENT 🤣🤣🤣
Reporter: "You said she's an attorney, Where did she pass the bar exam. What State."
Trump: Looks at her and asks "Which State"
Katie Zacharia: "Trying." 🤣
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Absolutely incredible! 10 stocks drove 70% of the S&P 500's 23% rally since March. $NVDA alone did 13% of it — adding $1.2 TRILLION in value on its own. 👇
The top 10 names are now 40% of the entire index, versus 27% at the dot-com peak. Nvidia's single weight is the highest for ANY stock in over 50 years. 👀
So when you hear "the market's at record highs," be precise about what that means. It's not 500 companies winning. It's about just 10 of them and the other 490 are largely along for the ride. 🎢
The index isn't strong. A handful of stocks are.
#SP500 #Stocks #Nvidia #Investing
Absolutely incredible.
Just 10 stocks have driven 70% of the S&P 500’s gain since March 30th.
These stocks have added +16 percentage points to the index’s +23% gain over this period.
Nvidia, $NVDA, has contributed the most, accounting for 13% of the S&P 500's gain, or +3 percentage points.
This is followed by Micron, $MU, Apple, $AAPL, and Microsoft, $MSFT, each accounting for 9% of the S&P 500’s advance, adding +2 percentage points.
Return contributions of AMD, $AMD, and Alphabet, $GOOGL, have been 8% and 7%, respectively.
Meanwhile, the remaining 490 stocks have accounted for just 30% of the S&P 500's gain since March 30th, adding +7 percentage points.
Diversification is dead.
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I’m 60 years old and retired from JPMorgan. My monthly income is $105,000.
Unwritten rule for the stock market:
1. If the price drops 10%, just hold.
2. If the price drops 20%, add 10%.
3. If the price drops 30%, add 20%.
4. If the price drops 40%, add 30%.
5. If the price drops 50%, add 50%.
6. If the price rises 10%, just hold.
7. If the price rises 20%, still hold.
8. If the price rises 30%, sell 10%.
9. If the price rises 40%, sell 20%.
10. If the price rises 50%, sell 30%.
11. If the price rises 60%, sell 40%.
12. If the price rises 100%, sell everything.
Don't forget to save it to look back on later…
If you are not following us with notifications turned on, you might miss our next alerts.
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ONE SECTOR I BELIEVE IS NEARING A MAJOR BOTTOM:
SPORTSWEAR
$NKE, $LULU, $ONON and $DECK are all deeply oversold.
In other words, while prices continue to make lower lows, indicators are already forming higher lows.
Selling pressure is weakening, even as prices continue to fall.
I truly believe it's only a matter of time before these names make a major comeback.
Are you invested?
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The S&P 500 is sitting near record highs but most of the stocks inside it are falling 🔻🔻Both are happening at the same time, and the breadth has quietly collapsed.
As of early October:
🔴 Only a quarter of S&P 500 stocks are above their 50-day average — the lowest since April 2025, down from 70% in mid-August
🔴 Fewer than half are above their 200-day
🔴 New 52-week lows have beaten new highs in 17 of the last 18 sessions
🔴 The median stock sits 16% below its 52-week high
The index isn’t broadly strong, it’s NARROWLY strong. A handful of 🤖AI giants are carrying the scoreboard while most of the roster quietly struggles.
💡This is because the surge in bond yields as the Fed turned to mid-cycle hikes. Higher yields punish the average stock, while the mega-caps with huge balance sheets shrug it off.
Narrow can stay narrow for months without breaking but it tells us that the market is fragile and the concentration risk is real💔
US market breadth is COLLAPSING:
Just 21% of S&P 500 stocks are trading above their 50-day moving averages, the lowest share since April 2025.
Meanwhile, 85% of index constituents are down at least -10% from their all-time highs, while 59% are down at least -20%.
The damage is broad-based, with 41% of stocks down at least -30%, 26% down at least -40% and 17% down at least -50%.
Meanwhile, only 2% of S&P 500 stocks are trading at record highs, while the average constituent is 20.1% below its peak.
The headline index is masking a severe deterioration in the underlying market, with the vast majority of stocks trading in a BEAR MARKET.
How is this a historically 'strong' market?
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