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Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

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Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#161

Post by huhtenberg »

ProjectArcturis wrote: post #133
huhtenberg wrote: post #100

Earlier quoted context omitted.

To add some context - Powell's 4-year term ends January 31, 2026. Whether he is reconfirmed by the Senate for another term is an open question.

Uhh... Powell's term as chairman ends in May 2026. His term as a board member ends Jan 2028. Senate confirmation is irrelevant because Trump will not nominate him again for anything.

Bah, you are correct [1]. I got my date from the Wikipedia page and apparently it's wrong.

[1] https://www.congress.gov/crs-product/R48233

[2] https://en.wikipedia.org/wiki/Jerome_Powell#Federal_Reserve_...

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#163

Post by nr378 »

AzzyHN wrote: post #118

A bet against Nvidia is smart. A bet against Palantir is not. Palantir has become deeply integrated into the surveillance states of America, and won't be going anywhere anytime soon.

Palantir is trading at 80x revenue (NTM), whereas Nvidia is only trading at 19x revenue (NTM).

Both companies are growing revenue at a similar rate (~50% YoY), and Nvidia has a higher net margin, however Palantir's share price is up 717% over 18 months, whereas Nvidia is only up 124%.

It's hard to argue Palantir's valuation reflects its fundamentals, even if you believe Palantir will be benefit from lucrative government contracts for years to come.

Buying companies at 80x revenue has not historically been a great way to make money, unless they're growing revenue at several hundred percent per year.

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#165

Post by JumpCrisscross »

drob518 wrote: post #108
lordnacho wrote: post #9

I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.

Yes, but premiums on NVDA and PLTR are not small as premiums go. He’s still going to be spending a huge chunk.

> premiums on NVDA and PLTR are not small as premiums go. He’s still going to be spending a huge chunk

He may be. We may also only be seeing parts of the trade.

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#166

Post by JumpCrisscross »

ericmcer wrote: post #69
lordnacho wrote: post #9

I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.

Yeah I feel like 200m of PLTR put options would distort the market so much the contracts would struggle to overcome their own premium. They must be referring the the value of the shares the contracts represent?

> PLTR put options would distort the market

Puts are calls and calls are puts [1]. On a certain level, all options of a given expiry and underlying are shadows of the same object.

[1] https://en.wikipedia.org/wiki/Put%E2%80%93call_parity

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#167

Post by geoka9 »

embedding-shape wrote: post #46
FanaHOVA wrote: post #34

Earlier quoted context omitted.

The equivalent of "If you have to ask, you can't afford it" here is "If you have to ask, you shouldn't do it".

Overall for the common person I'd agree, but I assume we're all more or less hackers here and for us, I'd say "If you have to ask, ask and learn, then do it". If everyone followed your advice no one would ever do anything, as we all begin somewhere, something that should OK. Of course, don't do million dollar trades when you begin, but we shouldn't push back on people wanting to learn, feels very backwards compared t…

> "If you have to ask, ask and learn..."

Totally! But also keep in mind this :)

https://www.explainxkcd.com/wiki/index.php/1570:_Engineer_Sy...

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#168

Post by mvdtnz »

blitzar wrote: post #23
prodigycorp wrote: post #4

Palantir's valuation is far more egregious than Nvidia's. Palantir is Becky (IBM) with the good hair.

> 5 million Palantir shares worth $912 million, and 1 million Nvidia shares worth $187 million The Nvidia trade is a rounding error compared to Palantir (which looks a bit oversized given it is 1/400th of the entire market cap)

20% is not a rounding error...

Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir

#170

Post by rurp »

astrange wrote: post #113
jkelleyrtp wrote: post #38

Earlier quoted context omitted.

It seems like the economy is on a “K” shaped flywheel. How much worse can the economy get for the regular worker before the systems just pops? We’ve put so much speculation into an AI/tech salvation that seems premature, especially when you look at ROI vs depreciation timelines. I’m not sure what timeline to place on that but there has to be a floor for how bad it can get for the regular man. Shit is just expensive.…

Graph looks like it's going up to me. https://fred.stlouisfed.org/series/MEHOINUSA672N

I'm sure the Fed chart is accurately measuring what it's measuring but when I was a kid in Southern California it was normal to buy a house and raise kids on a single teacher or construction worker salary. That has become nearly impossible over the past couple decades. Many others have seen similar changes in their own areas and I don't think they're being crazy when they say it has gotten much harder to finance a normal household on a normal salary.

I don't know what the disconnect is with that chart and people's observations. Is that chart controlling for number of incomes and hours worked? If a household income increases by 20% because the members are working a combined 80% more hours that's not great. Category differences in inflation might be another factor. Sure TVs and other niceties are a lot cheaper, but essentials like housing and medical care eat up a huge portion of most budgets.

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