$1.7 B Short

Burry since 2008 has made a bunch of public calls that have been wrong.

10 Times Michael Burry’s Market Crash, Other Predictions were Wrong

This isn’t unusual. There have been other people who have predicted other crashes, and afterwards tend to predict other crashes that never happen.

 

12/31/14 russell = 1245
12/31/15 russell = 1149
2/5/16 russell = 985

 

Burry has been wrong about a lot of stuff post 2008.

 

mkts are smarter than AI. AI does not have & cannot get the data that mkts get. AI & smart people try to infer info from prices b/c prices incorporate all info. This is what people don't understand about mkts. ALL MKTS.

 

no. more importantly his actions did. he sold off a shitload in Q2 ON NET

 

Warren Buffett selling $8 billion worth of stock raises economy crash fears

 

I'm sure you are right...I just don't keep up. man, if someone has 1 sexy move, they are forever given a guru-like status. It makes for good headlines & even more importantly to the machine, it makes people trade.

 

I posted a post prior to this with a link but it has ya hoo link and it is sitting there waiting for mod approval.

 

Google this


10 Times Michael Burry’s Market Crash, Other Predictions were Wrong

 

What do you know. The big guy was right. Guess that’s why he’s a billionaire and I’m not.

 

yeah, but his advice to you woulda been, do nothing which I hope is what you did. fun fact. people who "correctly" got out prior to 2008 crash did WORSE than those who did nothing.

 

would be great if we had a time machine. otherwise, not so much

 

Making a decision to acquire an investment with more risk (stocks) for potential higher ROI doesn't look as favorable now with risk-free investments of CDs returning ~5.5%. The idea of CAPM pricing model comparing assets considering ROI vs risk. (a CD vs a equity mutual fund)


Another pessimistic outlook….

The S&P 500 is massively overvalued - and likely to plunge like it did last year, top economist David Rosenberg says.

"It would be one thing if the S&P 500 was priced for these imperfections, but instead it is priced for perfection,"

 

The fact that CDs are at 5.5% isn’t itself an indication that sticks are over valued. The fact that rates are higher and valuations are still at higher multiples could be a sign stocks are overvalued.

TIPS - short term to long term, are all at about 2.0% real. Been a long time since we’ve seen that.

 

Selective selling back then could have been profitable. For example, my dad sold off homebuilders and Sallie Mae and Freddie Mac before they crashed. I procrastinated and lost quite a bit.

 

Seeking Alpha has the opinion that the headlines around Burry’s action are exaggerated or misleading.. #2 is as I suspected.

#1: This is already old news.
13F filings are delayed by 45 days, so by the time it is revealed, Burry may have closed these positions already. Or, he could have added to them. We will know after the next filing, which will also be old news when it comes out.

#2: He did not spend $1.6 billion.
The $1.6 billion headline is incredibly misleading. Burry bought Put Options on the S&P 500 ETF Trust (SPY) and the Nasdaq Invesco QQQ Trust (NASDAQ:QQQ). The notional value, which you can read about here, refers to the total value of the underlying assets - not what is paid for the options. In actuality, Burry paid a fraction of $1.6 billion, and the options could be a hedge or speculative.

#3: He did not go "all in" on a market crash.
Despite what you may have read, Burry did not put all his chips on double-zero at the roulette wheel. Scion Management is still long stocks. The fund increased its holding in MGM Resorts (MGM), Expedia (EXPE), and CVS (CVS). Increasing bets on consumer discretionary and staples stocks isn't exactly a bet on calamity. Instead, it lends credence to the put options being used as hedges against the fund's long positions.

 

But Buffett making that kind of move would almost tank the market on its own. If I had foreknowledge of him making a big move like that I would sell too.