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Michael Burry shorts Major index in sizable bets

thestreet.com

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Re: Michael Burry shorts Major index in sizable bets

#21

Post by aidenn0 »

andromeduck wrote: post #18
fullstackchris wrote: post #15

Earlier quoted context omitted.

that's what everyone said in 99 when nasdaq basically doubled in a year... then continued to more than double the year after that! a lot of guys blew up being too early trying to guess when the selloff would finally happen... they're called bulls for a reason - they're not the brightest, but you gotta be sure to either join 'em or get the heck out of the way while they're in control!

But how much higher can the market really go with interest rates like this?

"The market can stay irrational for longer than you can stay solvent"

Re: Michael Burry shorts Major index in sizable bets

#22

Post by jongjong »

I feel strongly that the stock market is due for a massive crash but I'm also aware of the possibility that some highly connected individuals may find a way to cheat, cover up and censor their way to extend the 'growth' period by some arbitrarily long amount of time by which point my put options will have expired many times over.

There is no way that the stock market would experience a massive crash without some serious massive-scale cheating. If this is an extinction-type event, some banks would go rogue and come up with new (possibly illegal) ways to start printing money to prop up the stock market... Given the complexity of the monetary system and correspondent banking, they could keep this going for a while. I mean there are thousands of institutions involved and countless ways to corrupt the system.

Our modern system is all made up of centralized databases with thousands of participants trusting each other; trusting the data that all those thousands of distinct centralized systems are reporting and treating them as if they were a cohesive whole... That's our monetary system; thousands of databases managed by different people who trust each other based on what each others' systems are reporting with no way to verify any of those systems.

Re: Michael Burry shorts Major index in sizable bets

#23

Post by senthil_rajasek »

From earlier this year (Jan?),

Michael Burry of ‘Big Short’ fame expects another ‘inflation spike’ after recession rocks U.S.

" Cassandra B.C. @michaeljburry · Inflation peaked. But it is not the last peak of this cycle. We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike. It's not hard.

"

None of these predictions were right.

The lesson here is always do your own homework. Or get a trusted financial advisor.

p.s since his twitter handles are ephemeral I saved the tweet that was attributed to him.

Re: Michael Burry shorts Major index in sizable bets

#25

Post by dragonwriter »

andromeduck wrote: post #18
fullstackchris wrote: post #15

Earlier quoted context omitted.

that's what everyone said in 99 when nasdaq basically doubled in a year... then continued to more than double the year after that! a lot of guys blew up being too early trying to guess when the selloff would finally happen... they're called bulls for a reason - they're not the brightest, but you gotta be sure to either join 'em or get the heck out of the way while they're in control!

But how much higher can the market really go with interest rates like this?

The market did great in the 1980s, and the Fed Funds rate averaged about 10% over the decade and never dropped below about 6%, which is higher than it is today. So, there's that.

Re: Michael Burry shorts Major index in sizable bets

#26

Post by tedunangst »

jjoonathan wrote: post #5
xcxcx wrote: post #3

He's not short the index, he's long the puts. Different convexity profile.

I need some ELI5 help here. Does that mean he bet on a big, fast downward move as opposed to a slow, small downward move?

Losing less money when it goes up is always good.

Re: Michael Burry shorts Major index in sizable bets

#28

Post by echelon »

jjoonathan wrote: post #20
mmastrac wrote: post #8

You gotta give it to him. Michael Burry has predicted 20 of the last 3 crashes.

But he deleted his twitter account for the 17 that didn't work out, so it's like they never happened, right?

He's notorious for deleting his entire post history every month or so. That's why people screenshot him.

Here's an account dedicated to preserving his Tweets: https://twitter.com/BurryArchive

Re: Michael Burry shorts Major index in sizable bets

#29

Post by echelon »

0cf8612b2e1e wrote: post #9
guywithabowtie wrote: post #2

Burry and his Scion Asset Management fund bought put options (contracts giving the option to sell at a certain price) with a value of $886 million against the SPDR S&P 500 ETF Trust which tracks the S&P 500. Scion also bought put options totaling $739 million against against the Invesco QQQ Trust ETF QQQ that tracks the Nasdaq 100. The $1.6 billion Scion spent betting against the market represents 93% of the fund's e…

What is the expiration date on the puts?

That's not included in the filing.
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