Bill Gates Is Selling His Stocks & The Reasons Are Terrifying - YouTube

Eventually will result in an economic slowdown,  so I'm afraid that the bears on this one have a  

pretty strong argument. That concerns me a lot. You know, you avoid taxation or any sort of  

government rules about kidnapping fees or things. Until we get there, which we're absolutely not. 

Bill Gates has been selling his stocks  to prepare for one of the worst economic  

disasters in history. Gates is known for being  a CEO and he's even better at capital growth.  

Through the help of his fund manager, Michael  Larson, Gates managed to make 50 billion over  

the past 20 years. Gates and Larson not  only made billions when the bull run,  

but also successfully prepared for the dot-com  bubble in the 2008 recession. This has allowed  

him to consistently beat the S&P 500 and grow  his wealth to new heights. Gates and Larson  

are now aggressively preparing for what will  become one of the worst recessions of all time. 

It's no secret that the economy is in a  tough position. The US economy is undergoing  

accelerating inflation, the lowest consumer  sentiment in history, the Russia Ukraine War,  

low consumer savings rates, and record high debt  levels. The government pumps trillions of dollars  

into the economy in 2021. 2022 is the complete  opposite of that. With the government pulling back  

trillions of dollars out of the economy, Gates  is especially concerned about the artificial  

trap that the Fed created for themselves. The economy is currently being hit by a  

double-edged sword. One edge of the sword is  accelerating inflation and the other edge is the  

massive level of government debt. The government  now has two choices; to destroy the US dollar,  

or crash the economy at the risk of popping the  debt bubble. The Fed has decided to go with the  

second choice of slowing the economy at  the risk of an unprecedented collapse. 

We recently saw the Fed raise interest rates by 75  basis points, which is the largest increase since  

1994. This increase helps substantially with  slowing inflation, but it comes at substantial  

risk. First of all, raising rates that sharply  means that borrowing will cost significantly more  

for business investments and mortgages. Rates on  the 30-year fixed rate mortgage recently increased  

by the largest one week jump in 35 years. If this  increase in interest rates slows the economy too  

much, it could pop the existing debt bubble and  spiral the economy into a recession or depression. 

So since we last talked, small thing has  happened. Russia has invaded Ukraine and  

it feels like we're in a new world. We are going  to be seeing higher energy prices, higher food  

prices, for years to come. It seems difficult  to see how this resolves itself very quickly. 

What does that say to you about the  economic outlook for the next few years? 

Well, it comes on top of the pandemic, where  government debt levels were already very,  

very high and there were already some supply  chain problems. And so it's likely to accelerate  

the inflationary problems that virtual economies  have and force an increase in interest rates that  

eventually will result in an economic slowdown.  So, I'm afraid that the bears on this one have  

a pretty strong argument that concerns me a lot. The bear thesis that gates is talking about makes  

complete sense. A surge in oil prices  is strongly correlated with recessions.  

The gray areas in this chart are periods in which  the US economy was in a recession. You can see how  

every time Brent Crude Oil crosses $100 per  barrel, a recession almost always follows.  

Brent Crude Oil is currently at roughly $120 per  barrel, signaling that a recession is coming. 

The reason why a recession almost  always follows oil prices breaking $100  

is because rising oil prices are a tax against  the consumers. High gas prices take money directly  

out of the consumer's pocket. This not only  leaves the consumer with less money to spend,  

but it also drastically lowers consumer sentiment. The University of Michigan Consumer Sentiment  

Index shows that the consumer sentiment is  currently the lowest it has been since a  

2008 recession. The economy works in cycles, with  debt levels continuously peaking and bottoming in  

a cyclical form. Gates and Larson recognize that  2021 represented a period of immense speculation.  

The complete opposite of this is coming;  a considerable economic slowdown. 

In preparation for a collapse in the US stock  market, Gates and Larson have been implementing  

a variety of hedging strategies. One of these  strategies includes shorting stocks. Unlike  

long positions, short positions don't  have to be disclosed to the public.  

The SEC is trying to change this with a new  proposal, but until that goes through, we have  

no idea what stocks Gates is actually shorting. With that being said, we know that Gates has a  

short position against Tesla stock  because Elon confirmed it himself.  

Gates touts himself as a strong  supporter for sustainable technologies  

but Musk believes that his Tesla  short position contradicts this.  

Musk tweeted that, "Since Gates still has a  multi-billion dollar short position against Tesla,  

while claiming to help with global warming, I  guess I have some trust issues with him too." 

Gates is already down over one billion  dollars on his Tesla short position,  

but he clearly hasn't closed out his position  yet. Elon explained how it was 500 million,  

but then Tesla went up a lot, so now it's 1.5  billion to two billion dollars to close it out. 

Gates and Musk were about to meet to talk about  philanthropy, but leaked messages show that Gates,  

Tesla short position hindered the meeting from  occurring. Gates texted "720 on Wednesday,  

to be clear." To which to Elon replied by saying,  "Great." Gates then told Elon that he, "Just  

landed." Elon said, "Cool. Do you still have a  half billion dollar short position against Tesla?"  

Gates admitted that he had a short position by  replying, "Sorry to say I haven't closed it out.  

I would like to discuss philanthropic  possibilities." Must confirm that these leaks  

messages were true and claims that gates having  a Tesla short position isn't top secret at all.  

Though Tesla stock experience  substantial price appreciation in 2021,  

the epitome of the bubble was the rise of NFTs. NFTs like the Bored Ape Yacht Club rose by  

hundreds of percent before recently dropping by  over 80% in two months. While there is long term  

potential for the Ethereum platform, there's  no reason for pictures of apes to be trading  

for hundreds of thousands of dollars. Gates  recently criticized the Bored Ape Yacht Club  

for the lack of utility that it provides. I don't know. I mean, obviously expensive,  

digital images of monkeys are going  to improve the world immensely. 

We all agree on that. And you know, that's so incredible.  

Anyway, I'm used to asset classes where like  a farm, where they have output or a company  

where they make products, have an asset  class that's a hundred percent based on  

sort of greater fool theory that somebody's  going to pay more for it than I do.  

And where it has at its heart, sort of this  anonymity that you avoid taxation or any sort of  

government rules about kidnapping fees or things. Anyway, I'm not involved in that. I'm not  

long or short. Any of those things. At the time that I'm recording this video,  

the S&P 500 is still over 15% higher than its  P-pandemic peak. Gates sees no reason for that to  

be the case. The economy was much stronger before  the pandemic hit. Consumer activity was booming  

and the supply side was as well. The pandemic has  a serious impact on both consumers and suppliers.  

Money printing can't just boost economic activity  back to pre-pandemic levels. The economic impact  

of the pandemic is still being felt today. The behavior of people, in terms of wanting  

to travel or go to events, or even go to  a restaurant, it's been utterly changed by  

the concerns about this disease. And so until  we can say to people that we're tracking this  

thing so well, that actually going out to your  job, to a car factory, to a construction site,  

that those are safe enough that we feel confident  you can do those things. Until we get there,  

which we're absolutely not, no one should  think that government can wave a wand  

and all of a sudden the economy is anything  like it was before this happened. That awaits  

either a miracle therapeutic that has an over  95% cure rate or broad usage of the vaccine. 

And so, you know, we've had a demand side shock  and a supply side shock, and that demand side  

piece is both mediated by fear of infection and by  the overall wealth effects of many people losing  

their jobs and entire industries will be operating  at a far lower level than in a normal economy. 

In addition to the economic landscape being  fragile, Gates also doesn't believe that the  

pandemic is over. Gates told the Financial Times  that we're still at the risk of this pandemic  

generating a variant that would be even  more transmissive and even more fatal.  

He explained further by saying that, "It's not  likely. I don't want to be a voice of doom and  

gloom, but it's way above a 5% risk at this  pandemic, we haven't seen the worst of it." 

So not only do we have high inflation and  liabilities, but also a pandemic that could  

still get worse. All of these factors combined  put the US at risk of a frightening economic and  

social crisis. Gates mentioned productive assets  as his specialty when it comes to investing,  

but he actually has been selling his assets.  His most recent quarterly filing for the  

first quarter of 2022, revealed that he sold  millions of shares in a variety of companies. 

This included over 1.3 billion  dollars of Berkshire-Hathaway,  

over 500 million dollars of Caterpillar and  a vast array of other stocks. In order to  

understand why Gates is selling his stocks, we  have to dive into Michael Larson's strategy. 

Larson is the brains behind the operation.  He knows exactly how to maximize Alpha,  

which is known in the investment world as  the risk adjusted return. While the market  

crashed immensely during the 2008 recession,  Gates experienced a very small decline in  

his net worth according to sources close to him. Although Larson's strategy has remained secretive,  

we know from public filings that he  mirrors Buffet's investment strategy.  

If we take a look at the holdings in Gates's  portfolio, we can see how most of the companies  

would not be impacted by economic fluctuations.  One instance of this is Waste Management stock,  

which gates owns three billion dollars  of. Nobody is going to stop dumping their  

waste because the stock market is down 50%. Another component of Larson's strategy includes  

diversifying into other asset classes. Gates is  the largest US private owner of farmland for two  

reasons; high alpha and diversification.  Farmland averaged a return of over 11%  

from 1991 to 2018, with not a single year being  negative. This is because during a recession,  

people are not going to stop eating food. This  allows farmland to have a high Alpha, because it  

delivers high returns with little to no downside. Larson is also known for investing in alternative  

assets, such as private equity, which involves  buying out private companies. Similar to farmland,  

private equity is a sector that's not available  to retail investors like you and me. However, for  

Gates, private equity is a fantastic way to hedge  his portfolio further through diversification. 

Let me know whether you are selling stocks like  Gates down below. If you enjoyed this video.  

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