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InsideArbitrage May 2023 Mid-Month Update – Booms and Busts

  • May 16, 2023

Every eight to ten years, we seem to find ourselves in some sort of crisis. The crisis often follows a bubble and different investors react differently to these boom/bust cycles. I recently came across a New Yorker article called The Secret Cycle that was an absolutely fascinating read. While I don’t subscribe to the wild theories discussed in the article, I have invested during various market cycles and have observed the different styles investors use to navigate these cycles.

There are investors like Michael Burry, of The Big Short fame, that anticipate the collapse of a bubble and position themselves for the inevitable unraveling. There are investors like George Soros that like to participate in the middle of bubbles and then there are investors like Warren Buffett that like to pick up bargains in the aftermath of the bubble.

Every quarter we get a glimpse into how some of these investors have been positioning themselves when they file their 13Fs with the SEC within 45 days after the end of a quarter. While the information is stale by a few weeks and the 13Fs don’t include all their positions, reviewing their filings can be a source of new ideas.

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