With fears of a recession rising again largely thanks to the Trump administration’s aggressive policy measures—tariffs, spending cuts, aggressive layoffs, and an increasingly combative trade stance—it’s time to awaken the vulture investor within. Both Main Street and Wall Street are at risk of losing a lot of money now.
I don’t particularly enjoy the idea of being a vulture investor. It feels exploitative, capitalizing on the misfortune of others. But in a capitalistic society, opportunism isn’t just encouraged—it’s essential for survival. If the rapid indiscriminate firings of federal government employees teach us anything, it's that the rich and powerful don't care about you! Therefore, you must change your mindset to go on the offensive.
Every market downturn triggers a wealth transfer, moving money from the unprepared to the prepared, from the weak to the strong. If you refuse to adopt a vulture mindset during uncertain times, you risk becoming the prey. Embracing this approach is both a defensive safeguard and an offensive strategy for seizing opportunities.
A Bear Market Could Easily Come Back
We’ve just experienced two phenomenal years of stock market returns. A natural reversion to the historical valuation mean of 18x earnings could easily pull the S&P 500 down by another 10% or more from current levels. If so, we should expect to see an acceleration of mass layoffs.
While that downside move may seem extreme, so is the ongoing tariff flip-flopping, which ultimately hurts consumer sentiment. Think about it—if confidence in the future fades, the logical response is to save, not spend. If too many people start saving, a recession ensues.
Although the NASDAQ has corrected by ~15% already, there’s not exactly blood on the streets yet, with the S&P 500 only down about ~10% from its peak. However, if self-inflicted wounds continue to mount, a savvy vulture investor knows to keep cash ready to pounce on emerging opportunities.
The Goal of a Vulture Investor
A vulture investor’s mission is simple: identify distressed assets, wait for capitulation, and strike when the price is right.
Like actual vultures circling the dying, financial vultures must exercise patience and discipline. Instead of chasing assets at inflated prices, you must wait for forced sellers—those who can no longer hold on due to excessive debt, economic hardship, or mismanagement.
I've made vulture investing sound immoral due to the word “vulture.” I could have easily changed the term to “Opportunity Investing” or “Strategic Investing” to make being opportunistic sound better. However, in a free market, most of us have the ability to buy or sell anything we want.
The early warning signs are already here:
Job cuts are accelerating – Companies are trimming fat, preparing for leaner times. Layoffs ripple through local economies, creating secondary distress in housing, consumer spending, and small business revenues.

Household debt levels and delinquencies are inching higher – Some homeowners stretched themselves thin to afford property at historically low interest rates. While credit card debt and auto loan debt continue to rise. With rates still elevated, carrying costs are biting hard.
Commercial real estate remains fragile – Office vacancies are still high, and if companies start downsizing further, landlords with too much leverage could be in big trouble.
Erratic and unpredictable government – When government actions are inconsistent, it becomes difficult to make reliable projections about a company's performance and the broader economy's direction. The free market wants less government intervention, not more.
GDP growth is decelerating or may even be declining – The Atlanta Fed is forecasting 1Q2025 GDP growth of -1.5%.

Who to Prey On as a Vulture Investor
To capitalize, vulture investors must know where to look for opportunity. So long as the investment is legal, it is within your right to take advantage of the situation. Here are some targets to consider:
1. Homeowners Who Overleveraged
During the post-pandemic housing boom, many buyers ignored traditional affordability rules. Instead of following the 30/30/3 rule (spend no more than 30% of gross income on a mortgage, put down at least 30%, and don’t buy a home more than 3x your annual income), they stretched themselves thin, banking on low mortgage rates and rising home prices.
Now, with persistently high interest rates and rising layoffs, forced selling and foreclosures could increase. This may be especially true in states that overbuilt, such as Florida, Texas, Tennessee, and Colorado. Additionally, mass layoffs in the Washington D.C. area could lead to a surge in home listings as homeowners downsize. A savvy vulture investor monitors foreclosure trends and waits patiently for properties to hit auction at steep discounts.
2. Small Business Owners Who Took On Too Much Debt
The surge in small business formation during 2020-2022 was impressive, but many businesses survived on cheap debt and government aid. Now, with higher borrowing costs and weaker consumer spending, those without strong cash flow or pricing power will struggle.
As a vulture investor, you can look for:
• Businesses forced to liquidate assets at discounts (real estate, equipment, intellectual property).
• Acquiring distressed companies with strong fundamentals but short-term cash flow issues.
• Buying into struggling but promising startups at fire-sale valuations. During downturns, client growth slows and it's much harder to get funding.
3. Overleveraged Commercial Real Estate Owners
Although recovering, the commercial real estate sector remains in a precarious position. If a recession hits, the post-pandemic return-to-office trend may stall, as companies will freeze hiring or downsize, reducing office space demand further.
Meanwhile, many landlords refinanced their properties at rock-bottom interest rates and are now facing ballooning debt payments with few options to refinance affordably. Those who can’t restructure will be forced to sell, creating prime opportunities for deep-pocketed investors.
The easiest way I've found to gain commercial real estate exposure is to invest through Fundrise. With an investment minimum of only $10, it's easy to dollar-cost average in. Personally, I've invested over $300,000 with them and will continue to dollar-cost average given I see good relative value. Real estate tends to outperform tremendously during times of uncertainty.

4. Large Corporations With Excessive Debt
Corporate debt levels soared when rates were near zero. Now, with borrowing costs much higher, overleveraged firms face an earnings squeeze. The weakest companies will:
• Sell off divisions or assets at distressed prices.
• Restructure through bankruptcy, wiping out existing shareholders.
• Issue dilutive secondary stock offerings to stay afloat.
Vulture investors can profit by:
• Buying bonds of distressed companies at steep discounts.
• Acquiring cash-generating divisions spun off by struggling firms.
• Short-selling overvalued, debt-laden companies before they collapse.
5. Panic Sellers in the Stock Market
The beauty and curse of the stock market is its emotional nature. Fear-driven selling can create incredible bargains, much like we saw in March-April 2020 when great companies were trading at absurdly low valuations.
Vulture investors:
• Build a watchlist of high-quality companies with strong fundamentals (strong free cash flow, large balance sheets, large moat, etc) that may get unfairly punished by panic.
• Look for indiscriminate selling based on macroeconomic and policy-driven panic rather than company-specific problems.
• Use dollar-cost averaging to buy in phases as prices fall further.

6. Former Startup Employees with Illiquid Stock
In difficult times, some employees holding stock options or equity in private companies may look to offload their shares at a discount. Vulture investors can:
- Buy shares in struggling but promising private companies on the secondary market.
- Look for pre-IPO companies with strong fundamentals but temporary cash flow issues.
- Negotiate with ex-employees who need liquidity before a company can go public or be acquired.

7. Vacation Homeowners Hit by Rising Costs
Many buyers rushed into vacation homes during the pandemic, expecting strong rental demand to subsidize operating costs. Now, with higher mortgage rates, insurance costs, and a slowdown in vacation home purchases, some are struggling to hold on. Vulture investors can:
- Scoop up discounted vacation properties in overbuilt markets.
- Target Airbnb investors who can no longer cover their costs.
- Look for resort-area real estate owned by overleveraged investors.
8. Distressed Luxury Asset Sellers
Economic downturns often force individuals to sell luxury assets at a discount. Opportunities include:
- High-end watches from brands like Rolex and Patek Philippe.
- Classic and exotic cars that require costly maintenance.
- Yachts and private planes from owners looking to downsize their lifestyles.

9. Overleveraged Crypto and NFT Speculators
The crypto boom led many investors to borrow against their digital assets. Now, with crypto market volatility, some may be forced to sell:
- Bitcoin, Ethereum, and other assets at distressed prices.
- High-value NFTs from collections like Bored Ape Yacht Club or CryptoPunks.
- Crypto-backed real estate and other assets that have gone underwater.
10. Landlords Struggling with Rent Control and Evictions
In cities with strict rent control laws or slow eviction processes, some landlords may be unable to raise rents or remove non-paying tenants. This can push them to sell properties below market value. Vulture investors can:
- Target distressed multi-family properties where owners are tired of dealing with regulations.
- Buy single-family rentals from landlords who can’t keep up with rising costs and stagnant rent growth.
- Seek out mom-and-pop landlords looking to exit the rental business altogether.
11. Divorcees Facing Asset Liquidation
Divorce often forces the sale of assets, including homes, businesses, and investment portfolios, at inopportune times. One spouse may need to offload real estate quickly to divide assets, or a business could be sold below fair value to settle a split. Vulture investors can:
- Identify luxury properties being sold at a discount due to divorce settlements.
- Look for businesses that one spouse is forced to sell, especially those with strong fundamentals but temporary distress.
- Buy out investment portfolios or private equity stakes that one spouse needs to liquidate.
12. Overleveraged Car Owners Facing Repossession
Buying too much car is the #1 personal finance wealth killer. This realization led me to develop the home-to-car value ratio, a simple guideline to help people make smarter spending decisions. The recent surge in car loan delinquencies suggests that many owners, particularly those with luxury vehicles, are struggling to keep up with their payments. Vulture investors can:
- Buy repossessed vehicles at auction for resale or rental fleets.
- Offer private-party cash deals to desperate sellers before repossession.
- Acquire car rental businesses liquidating their inventory due to financial struggles.
The Power of Cash: Your Ultimate Weapon
The best vulture investors don’t just recognize opportunity—they have the liquidity and the courage to act. Most people who get into trouble do so by taking on excessive debt, leaving them vulnerable when a downturn hits.
One of the biggest risks in a downturn is being forced to sell assets at the worst time. Savvy investors avoid this fate by maintaining strong cash reserves and having a clear game plan for when to deploy capital.
If you’re sitting on cash, a downturn isn’t something to fear—it’s an opportunity. The more uncertainty and panic in the market, the more negotiating power you have as a buyer.
Forget about only have six months of living expenses in cash. A vulture investor has years of cash ready to deploy!
So Rich You Don’t Care How Much You Temporarily Lose
One of the biggest dangers of electing billionaires policymakers to run the economy is that they might not feel as much pain as the rest of us during downturns. When you have hundreds of millions or billions in wealth, losing a lot of money means nothing.
But for the average investor, homeowner, or small business owner, a downturn can be catastrophic. That’s why thinking like a vulture investor isn’t just about making money—it’s about financial survival. You hope you never have to go into vulture investing mode, but you're prepared if you need to.
Whether you like it or not, downturns can create life-changing opportunities for those who are prepared. Those who gobbled up stocks and real estate during the 2008 Global Financial Crisis are sitting on huge fortunes today. Meanwhile, those who sold stocks and foreclosed on their homes back then have likely fallen behind for good.
If history is any guide, wealth will once again transfer from the weak to the strong, from the overleveraged to the liquid, from the fearful to the opportunistic.
The question is: Which side will you be on?
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Another fantastic post Sam. No one can do all of these but these are all categories of things that a vulture/strategic investor can and should be continuously evaluating.
The overwhelming strategic sentiment for the masses over the last 20 years has been “you can’t beat the market” so just join it by “buying the market”. For the majority of people, this is right, and I would advise them accordingly.
However, there are a minority of people who can operate as vultures/strategic investors and create asymmetric return opportunities. We have no idea if they will pay off brilliantly but they COULD. That is what you are getting at with this post.
You can’t dabble as a vulture/strategic investor. You can’t respond to tips from a buddy. It’s a mindset and posture.
Please don’t invest in distressed debt and companies unless have done it before and are a professional with a decent liquidity profile in the background.
That is not for the everyday investor.
It is not indeed. What is your experience investing in distressed debt and companies that need a bailout?
Do it at times in my professional setting, won’t do it in my personal (and not allowed anyway)
If the investments have done well for you, then you might as well continue to do it. Without risk, there are simply not enough reward.
Big pockets at work – not at home to be able to control the workout and plan of action.
I don’t think buying distressed assets is unethical or “vulture-like” behaviors. Well, in the real world, vultures perform important ecosystem services.
There’s definitely unethical investing or unethical businesses like casino, or putting in slot machines inside your gas station for example, or exploiting whales who don’t know how to stop.
Similarly, there are positive actions you can do, like building something useful on a property instead of engaging in real estate speculation. “Everybody works but the empty lot” is a famous phrase that comes to mind.
People who are under? Distressed assets? You didn’t cause them to go under. That was the government this time around.
how much lower will they go is the question
Wow. Phenomenal overview. Thanks, Sam!
I get your reluctance to celebrate the coming investor Christmas when it will be a terrifying Halloween for so many, but also agree it’s the way the markets work, so if you have the luxury of choosing a holiday …Christmas is nice.
Reminds me of the quote attributed to the legendary investor Jim Rogers, “I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up….”.
Stocks and real estate felt that way 2010-2012, some stocks felt that way again in 2022 (META at $90 anyone? What?!), and it’s hard to argue against the flood of indicators pointing to another downturn.
When it happens, global governments will, as usual, print massive amounts of currency to paper over another financial crisis, but, also as usual, there will be that window between a crash and the next paper mache recovery in which the prepared investor can pounce. I wish the best of luck to all!
I don’t have any ingenious investing strategies for the year but I am inching in during the dips. It does feel good to buy when prices are down but I have to shield myself from looking at my active losses.
Investing is so complex and we each have to find a groove that works for our own goals and comfort. It’s a challenge not to get emotional about it, but I’m trying to just focus on the opportunities at hand and keep the rest of my thoughts on the long term horizon.
It’s definitely a good opportunity for those of us with cash to take out our competition and to buy at fire sale prices.
It’s pretty amazing how the Trump administration wants to raise prices for middle class Americans and hurt the retirement savings and investments of all.
But if you are rich and can afford to gobble up Assets and firesale prices, then your future generations will be set. It was awesome to be able to buy foreclosures during the 2008 crisis.
Trump is doing something heroic right now. He is trying to eliminate the deficit which of course will bring short term pain. Without eliminating the deficit, we are headed to fiscal oblivion.
While desperately trying to not be political, I will say that this was a purposely orchestrated stock market dip, so the rich can get richer by doing all the things you have suggested.
Maybe ask how and why we got here. It’s no more orchestrated than the pump.
actually the Ares Strategic Income Fund class I shares