Burry, who shorted real estate to gain his fortune, has bought puts totaling $1.7B against the S & P and the NASDAQ. 90% of his fund totals Makes me nervous. Is there a way to find out the details of his short positions? Minor movements short term or bigger drops and when? Michael Burry, of ‘Big Short’ fame, just bet $1.6 billion on a stock market crash - Boston News, Weather, Sports | WHDH 7News New York (CNN) — Michael Burry, the “Big Short” investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash. Burry is making his bearish bets against the S&P 500 and Nasdaq 100, according to Security Exchange Commission filings released Monday. Burry’s fund, Scion Asset Management, bought $866 million in put options (that’s the right to sell an asset at a particular price) against a fund that tracks the S&P 500 and $739 million in put options against a fund that tracks the Nasdaq 100. Burry is using more than 90% of his portfolio to bet on a market downturn, according to the filings.
I just don't see it. It wouldn't have surprised me at all if it happened over the last 2 years, but at this point I'd be wondering what indicators he's looking at. Outside of real wages and the wealth gap, all indicators are strong.
Isn’t that what was said in 08 though? I would imagine we bottom out as an economy sometime in the near future?
I was listening on the radio today about this issue. He made his money the first time shorting real estate, one sector. Now he is shorting the NASDAQ which is many different sectors. One thing about shorting stocks is that it has the potential for unlimited losses. If the NASDAQ starts moving up, margin calls will start and his fortune could go just as quickly.
Read TBS and saw the movie. Both wonderful. Instantly I felt some alarm from your post, but I don't follow this stuff closely enough to trust any instinct I have and so I don't know whether I should be alarmed or not I do think to myself that because he nailed it one time, doesn't mean it can't happen again...but it also doesn't mean it will happen again. The housing crisis was kind of a unique situation at the time. But then again...
A lot of people in the real estate industry knew what was up in 08. Our old buddy @gatorknights (RIP) used to tell those stories all the time. Maybe there's some weird behind the scenes stuff happening we'll find out about in the future, but nothing seems teetering from an normal indicator standpoint. Maybe he's betting on the general state of the country and the disenfranchisement of the younger generation. I dunno.
which leaves me wondering what he knows or believes and why?or if he has insurance on this. Not sure how you insure that big of a bet without a comparable bet in the other direction
Im guessing the list of things he didn’t see since 08 is very long. I have no idea but Home Depot reported good earnings on lower sales (price gouging I’m sure). Walmart earnings tomorrow with target and Lowe’s. Won’t those be better indicators than a bet?
Shorting a stock position has the potential for unlimited loses. I don't know how you could offset that.
could it be a bet on a trump conviction? would that hurt the market? or maybe on Biden's health? dud must know something to go all in
The market doesn’t have to crash for him to make money. The price of the index funds just need to drop below the strike price minus the option fee. What’s unclear to me from the story is whether the $1.5 billion is the number of shares times the strike price of the funds, or is it the value of the fee that he paid for the options. I’m guessing it’s the former, so he didn’t have to put up that amount of money. It would be interesting to know the strike price, the option expiration date, and the option fee paid.
would it be that hard to identify the date and strike position for a bet that big or a series of major big bets?
Might be possible if we had some idea on the date he did it. We just have to look for an option with a very high volume. According to this table, the lowest strike price is $4355 versus a current price of $4404. S&P 500 Index Options Prices - Barchart.com
didn't read everything. don't know what he & Buffet are "looking at", but P/E ratios by themselves are pointless. P/Es in relation to int rates are very important. 25 is supa high given int rates. But, that certainly can't be the whole story. China prob factors in heavily. regardless, Buffet's (& I guess this guy's) moves should give 1 pause.
Back in like 2014 I heard an interview with Buffett where he said the Russell 2000 indicated stocks were very overpriced and he expected a serious correction. It never happened. If I had sold based on the Buffett interview, I would’ve missed out on a lot of games.
