The Greatest Mania of All Time
Strategies for navigating the biggest financial event of our lifetimes
I started the Ross Report for one simple reason…
We’re living through the greatest financial mania of all time.
My bet is simple: trillions of dollars in paper wealth will evaporate across stocks, bonds, real estate and cryptocurrencies over the next 18 - 24 months. This record wealth transfer will present incredible risks and opportunities.
My goal - chronicle the madness, while equipping you with actionable investment ideas for navigating the financial event of our lifetimes.
The Everything and More Bubble
The history of capital markets shows that, once you inflate an asset bubble, the unwind is inevitable. The degree of fallout scales with the preceding degree of speculative excess. And the sheer volume of absurdity in today’s market surpasses any precedent.
Unlike prior manias that remained confined to a single asset class (i.e. tech stocks in 1999 and real estate in 2006), today’s mania has swallowed up the entire financial system. It’s the first time ever that U.S. stocks, corporate bonds and real estate all trade at or near the highest valuations on record.
There’s so much cheap money sloshing around, we’ve invented entirely new asset classes for hot money to flow into - including over $2 trillion in cryptocurrencies alone. That’s larger than the entire subprime mortgage market at its zenith in 2007. Regardless of how you feel about crypto, this new multi-trillion dollar asset class is either part of the bubble, or a direct consequence of the cheap money inflating the bubble.
The signs of speculative froth can be found almost everywhere you look in this market, including the rise of digital art trading via non-fungible tokens (NFTs). Read the following Tweet and tell me we’re not living through a full fledged financial mania:
Contrary to popular narrative, bubbles are often obvious and easy to spot in real-time. You can find countless examples of investors and pundits calling out the tech bubble as early as 1996 (i.e. Greenspan’s irrational exuberance speech). Likewise, many also recognized real estate prices were unsustainable during the mid-2000s.
Today, I’m far from the first person to call out the obvious mania gripping financial markets. Investing legend Jeremy Grantham - a billionaire who called both the Dot Com and Real Estate bubbles within 18 months of their implosion - recently labeled today’s market as “one of the greatest bubbles in financial history.”
Now, here’s the thing - I’m not here to preach endless doom and gloom. I’m here to make money, above all else. That means providing you with actionable investment ideas, designed for navigating the here and now - regardless of whether the bubble continues inflating or implodes tomorrow.
How? With an investment process designed for meeting two basic criteria:
1) Lose a little money when you’re wrong
2) Make a lot of money when you’re right
I’ve learned that if you can achieve goal number one - with a ruthless focus on managing risk - then goal number two - the upside - often takes care of itself. Let me explain, with a little background…
What I Learned from a Professional Money Manager
Everything I know about risk management came from working as a senior research analyst at a $500 million global macro fund. As a relatively small Fund, I got the chance to work directly with the CIO for three years. During that time, I gained firsthand insight into managing exposure across a complex portfolio of global equities, commodities, currencies and fixed income markets. The key in his approach was combining a series of uncorrelated bets together, which protected the downside and provided multiple ways to win.
The 2016 Brexit market panic provided a great example. Without any special insight into how the event would play out, the Fund went into the event with long stock exposure across the board. A big mistake. Over the next three days, global stocks tanked - including a 5.3% drop in the S&P 500. Yet, the Fund delivered a 7.7% return over the same period. How? Because of offsetting positions that overcame the losses in equities. This included a big short position in the British Pound, and even bigger long positions in global sovereign bonds, among other positions.
The experience revealed the importance of always having a backup plan. Mr. Market likes to throw curve balls, and you can’t predict how each one will break. That’s why my process starts with a top down, macro approach to risk management. But that’s just the start...
Top Down Risk Management + Bottom Up Stock Picking
My analyst experience goes beyond just the macro world. I’ve also published research on the long-only side, covering individual companies for over 40,000 subscribers monthly. This includes bottoms-up research on everything from energy to consumer staples to tech companies.
So you could call me a generalist when it comes to finding profit opportunities. I’ll bet on anything from tobacco stocks to Tesla to Treasury Bills - long or short. My only specialty is a laser-like focus on risk management. It’s all designed to keep the potential source of winners as broad as possible, while keeping a strict limit on losses along the way.
The end goal: small losses when things don’t go as expected, and occasional windfalls when they do. Yes, the windfalls are few and far between - maybe a couple times a year, maybe more if you get lucky. But if you manage the downside in between, you don’t need many big winners to do very well in this game.
That’s exactly what I plan to show with a tracking portfolio - designed to show the results of my process with 100% transparency and accountability. Premium subscribers will get access to the full portfolio of ideas, tracked in real-time. Here’s what else you get…
What You Get with a Premium Membership
For $39 per month, premium subscribers will get access to the following features:
Top down macro-driven research
Bottom up single stock research, including long and short ideas
Advanced trading strategies, including options for income and hedging
Performance tracking portfolio for 100% transparency and accountability
Weekly review of portfolio performance and current investment ideas
Connect with the author and a community of like-minded investors
I’m convinced that the next 18 - 24 months will make history.
Sign up now to join me in navigating the financial event of our lifetimes!
Good investing,
Ross Hendricks
"I’m convinced that the next 18 - 24 months will make history."
I really like your content and I share your views regarding the markets - specifically that we are currently living through the biggest bubble of all time eclipsing any previous precedent. At some point this will all collapse spectacularly, however the issue is always timing with these things. Already back in 2018-19, I thought this would finally occur - well in Feb/March 2020 we witnessed a huge sell off and I was convinced that this would lead to perhaps a 2-3 year bear market - boy was I mistaken! Central banks came to the rescue and markets rallied hard.
There is no guarantee that this will happen in the next 18-24 months. There is every chance though that it could, however my feeling is that as long as interest rates remain at these rock bottom levels in the coming months and even years, this bubble can just keep on inflating and keep making a fool out of all diligent investors, even if from a fundamental perspective they are completely correct in their analysis on the market and how insane it currently is.