Legendary investor Dan Loeb says Koyaanisqatsi can sum up the stock market turmoil. It’s one of his favorite art films about ‘life out of balance’.

The stock market looks shaky in 2022. Inflation at a 40-year high and rising interest rates have sent the market swinging, leaving investors on edge.

Making sense of this volatile stock market can be difficult, but one famous investor has one word to sum it up: Koyaanisqatsi.

In his latest letter to investors, prolific hedge fund manager Dan Loeb likened the current state of the stock market to the atmosphere of a 1982 experimental art film. Koyaanisqatsi it relies on sights and sounds rather than dialogue and contrasts images of idyllic natural landscapes with images of cities, specifically the impact of modern technology on human life. As Loeb points out in his letter, “koyaanisqatsi” is a Hopi Native American word that translates to “life out of balance.”

The stock market is falling because investors are unbalancing the prices of life, says Loeb.

“Forty years later, this film and soundtrack provide a fitting backdrop for today’s investment environment. ‘Koyaanisqatsi’ clearly captures current market conditions that are, in many ways, a reaction to imbalances,” Loeb wrote.

Loeb, whose Third Point hedge fund managed about $18 billion last year, wrote that the current state of stock market volatility is itself a response to subtle but significant changes occurring in the economy. She suggests that the “change” taking place in the market is not receiving an adequate response from investors to adjust their practices.

“I have seen many investors (myself included) stumble after years of success because they did not adapt their models and frameworks quickly enough as conditions changed,” Loeb wrote.

Loeb didn’t elaborate on what specific imbalances he was witnessing in the market, but in another, less esoteric part of the letter, he touched on some big events Third Point is watching, including last month’s rapid sell-off in tech stocks.

Tech stocks have been in a tailspin for weeks, with the tech-heavy Nasdaq index hitting its lowest point since June 2020 last week. Third Point says it has avoided the carnage by focusing its assets on more cyclical stocks, according to the letter, but not all fund managers were so lucky. Technology-focused fund Tiger Global, which currently manages around $80bn, lost $17bn this year after liquidation.

The volatility of tech stocks means companies have had to start tightening their belts, slowing down hiring processes and even laying off staff.

Loeb said it’s hard to predict which direction the tech sector will head now, but suggested the industry’s reliance on stock performance to determine company valuations and internal compensation could lead to a “spiral” and more imbalances. in the market.

And Loeb writes that the sell-off in tech stocks is a sign that big changes are coming for the broader market.

“I’ve said before that they don’t ring a bell when the rules of the game are changing, but if you listen closely, you can hear a dog whistle. This seems like a good time to hear that high-pitched sound,” she wrote.

This story originally appeared on Fortune.com

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