I have my sights on a certain ETF for this cycle. Go through ARK Innovation ETF’s [ARKK] position list, go through all the quasi-affiliated firms that have copied this position list. All these firms have surprising concentrations in the same names.
When it comes tumbling down, you don’t want to own any of these positions—especially the ones where ARKK owns more than 10% of the shares. You won’t want to own positions that are owned by people who own ARKK type positions as they’ll be forced sellers too. You want to be as far away from the Ponzi Sector ecosystem as possible.
I don’t know when it’s going to blow, but if I’m right that the top is in, the deluge isn’t too far off. Bubbles are highly unstable—if they’re not inflating, they’re usually bursting—there isn’t really a middle option.
I think the past few weeks are more than a simple pullback—the losses from the SPAC bubble are going to dent the Ponzi Sector psychology. With this in mind, I took my long book way down over the past few weeks (including my GameStop [GME] straddle for a nice score). That said, I don’t have shorts because this is still “Project Zimbabwe.” If I’m wrong, so be it. I’ll do just fine on my Event-Driven book. Besides, 2021 has already been a pretty spectacular year for me. By Harris Kupperman, founder of Praetorian Capital, Adventures in Capitalism.
