Makes me wonder how much of a self-fulfilling prophecy this can be.
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
#262You don't just need to decide that Nvidia is overvalued by the market and will crash in price to make money on a short position. You need to time the crash. If you're off, it could still crash and you could spend more money sustaining the position than you'd make. Or you could end up getting margin called, not just by semi-impotent private investors as Michael Burry was, but by the platform you're trading on itself.…
Hence the famous warning: “the market can remain irrational much longer than you can remain solvent ”
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#263You don't just need to decide that Nvidia is overvalued by the market and will crash in price to make money on a short position. You need to time the crash. If you're off, it could still crash and you could spend more money sustaining the position than you'd make. Or you could end up getting margin called, not just by semi-impotent private investors as Michael Burry was, but by the platform you're trading on itself.…
There's no way he gets margin called, these surely are puts, not pure stock shorting. This isn't some random guy.
No, but everybody here is some random guy, being tempted to mirror trades by the superhero investor they saw in that movie. And that movie depicts Burry trying to outlast the market in this sort of situation, resorting to quasi-fraudulent ideas like taking the phone off the hook; Those ideas are not available to us at all, because the online broker would just seize the account.
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#264You don't just need to decide that Nvidia is overvalued by the market and will crash in price to make money on a short position. You need to time the crash. If you're off, it could still crash and you could spend more money sustaining the position than you'd make. Or you could end up getting margin called, not just by semi-impotent private investors as Michael Burry was, but by the platform you're trading on itself.…
These are puts, you buy them, they have a fixed expiration date at which point they will be worthless if the price is above the strike price. Fixed down side, upside is $100 per contract per dollar the stock is below the strike at expiry. You can also sell them before then, and price depends on time to expiry, volatility, and distance to the strike price. See Black-Scholes model for more info.
Are you actually disagreeing with this?
> If you're off, it could still crash and you could spend more money sustaining the position than you'd make.
And in Black Scholes this is called Theta Decay. In any form of short, there are maintenance costs, and maintenance costs roughly scale with the risk-free interest rate (usually assumed to be roughly the Federal Reserve's overnight lending rate)
Theta Decay is above-and-beyond the risk-free rate because you're also losing time-value. So you must always factor in the amount of time before a predicted crash: the longer it takes the more money you lose.
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#265Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#266His track record since “the big short” has been horrific. That’s the problem with being a perma-bear, eventually the market dips but you missed out on extraordinary gains vastly out weighing your negative thesis. It’s a hellva lot easier to be bullish American companies then try and time draw downs. Doesn’t make any sense.
Yes, but I haven't seen anything from AI technology to suggest it's going to live up to the hype in the short term. I'm not saying Burry is completely accurate in this case, but the draw down could be quite big. GPT-4 was released in early 2023. Back then AI maximalists were saying AGI is near. We're approaching early 2026 and we obviously aren't anywhere close to anything any reasonable person would consider AGI. Bu…
Have you tried claude code? I despise AI to my bones but even I can’t say claude code is not impressive.
If any anthropic reps read this, I think you guys, while probably better than open AI and meta, possibly Google, are delusional and are more likely to destroy the world than create infinite human life.
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#267What does Palantir actually do? I feel like every earnings discussion is vague and goes on about things like “Ontology” without sharing trustworthy details. As far as I can tell they are more like a consulting firm. Why are they not viewed like another IBM?
They're basically IBM + Oracle but sexy because tech is different this time around for some reason?
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#268His track record since “the big short” has been horrific. That’s the problem with being a perma-bear, eventually the market dips but you missed out on extraordinary gains vastly out weighing your negative thesis. It’s a hellva lot easier to be bullish American companies then try and time draw downs. Doesn’t make any sense.
A crisis is when money flow stops in the market. In The Big Short, he bet on the fact that cash flow would stop, and they won. The stock market works in a similar way to a company’s cash flow. When money is pumped into a stock, its value increases; when money is pulled out, the value drops.
The news is essentially about making a bet, as the title suggests, with no real evidence or information on who will pull the money out or how it will happen. Just because the price is high doesn’t necessarily mean there will be an outflow. It’s more like gambling, based on speculation rather than solid facts.
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#269Betting against Palantir is interesting. I guess he saw the margins on that Mamdani victory and decided it means that the table is turning.
Re: Michael Burry a.k.a. "Big Short",discloses $1.1B bet against Nvidia&Palantir
#270You don't just need to decide that Nvidia is overvalued by the market and will crash in price to make money on a short position. You need to time the crash. If you're off, it could still crash and you could spend more money sustaining the position than you'd make. Or you could end up getting margin called, not just by semi-impotent private investors as Michael Burry was, but by the platform you're trading on itself.…
There's no way he gets margin called, these surely are puts, not pure stock shorting. This isn't some random guy.
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