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Contrarians betting against the herd have often been very successful. For example, John Paulson and Michael Burry made billions by shorting CDOs that lead to the 2008 crisis. The movie "The Big Short" is an Ok dramatization of how it all unfolded. Same herd mentality, different soapbox.
Contrarians betting against the herd have often been very successful. For example, John Paulson and Michael Burry made billions by shorting CDOs that lead to the 2008 crisis. The movie "The Big Short" is an Ok dramatization of how it all unfolded. Same herd mentality, different soapbox.
"Be greedy when others are fearful, and fearful when others are greedy"???
Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
Earlier quoted context omitted.
"Be greedy when others are fearful, and fearful when others are greedy"???
I'd say the short was more like "when others are greedy, be greedy and aware". Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
Earlier quoted context omitted.
I'd say the short was more like "when others are greedy, be greedy and aware". Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
what does it mean to be aware?
Earlier quoted context omitted.
I'd say the short was more like "when others are greedy, be greedy and aware". Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
what does it mean to be aware?
1. The short trade (The Big Short or similar trades during the housing bubble) happened during a period of market euphoria. I.e. when most investors were irrationally confident and greedy.
2. Instead of sitting out or being fearful (as Buffett's original advice would suggest), the people who shorted the market took an aggressive position. They were indeed "greedy" in the sense of seeking profit, but they did so with deep awareness of the systemic risk that others were ignoring.
Earlier quoted context omitted.
how does that compare to betting against Jim Cramer?
I haven't benchmarked inverse Cramer recently, but last I heard not too well: https://www.reddit.com/r/wallstreetbets/comments/187612o/inv... Anyone know how it is doing recently?
- Vix, IV vs realized/historical
- option flows
- market makers gex, skews, (1st 3 probably best src of edge)
- /NQ and /ES trading volume,
- bond yld curve, credit spreads, how much prim dealers hold after long auctions, PBC holdings
- metals
- geopolitical: Europe / middle East / China/ South America
- energy
- currency
- commodity prompt spreads, contangos
Contrarians betting against the herd have often been very successful. For example, John Paulson and Michael Burry made billions by shorting CDOs that lead to the 2008 crisis. The movie "The Big Short" is an Ok dramatization of how it all unfolded. Same herd mentality, different soapbox.
We analyzed hundreds of stock recommendation videos from finance YouTubers (aka finfluencers) and backtested the results. Turns out, doing the opposite of what they say—literally inverting the advice—beat the S&P 500 by over +6.8% in annual returns (but with higher volatility).