Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

sherwood.news

Post reply on HN
Print view View original

301–310 of 352 posts

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

#301

Post by weird-eye-issue »

lucaslazarus wrote: post #283
danielmarkbruce wrote: post #274

Earlier quoted context omitted.

He's not clearly right on Nvidia. People have been saying "it's clearly overvalued" for years now. And it just keeps growing at an insane pace and quite frankly their position in the market isn't really being eroded by anyone. There are hopes and dreams, but little real competition.

A good time to remember that Cisco was briefly the most valued company in the world: https://www.nytimes.com/2000/03/24/technology/cisco-briefly-... I met a traveller from an antique land, // Who said—“Two vast and trunkless legs of stone // Stand in the desert…

Cisco's earnings weren't growing at the same rate as Nvidia's. There is actual underlying sales and profit growth at the same rate as the stock price growth in NVDA's case.

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

#302

Post by weird-eye-issue »

itsoktocry wrote: post #289
danielmarkbruce wrote: post #274

Earlier quoted context omitted.

He's not clearly right on Nvidia. People have been saying "it's clearly overvalued" for years now. And it just keeps growing at an insane pace and quite frankly their position in the market isn't really being eroded by anyone. There are hopes and dreams, but little real competition.

How short-term of a thinker do you have to be to consider Nvidia's run a long time? I blame TikTok.

You are the one who needs to zoom out on the stock price graph lol

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

#303

Post by [deleted] »

dragontamer wrote: post #264
slashdev wrote: post #257

Earlier quoted context omitted.

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…

[deleted]

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

#304

Post by weird-eye-issue »

mapt wrote: post #241

You 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.…

You are right about timing being key when buying put options but...

> Or you could end up getting margin called

Completely false

Buying puts is a short position and does not require any further maintenance costs

Yes, theta decay is a thing but stating you can get margin called or there is any level of maintenance required is completely wrong and shows a total lack of understanding of the very basics of options

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

#305

Post by danielmarkbruce »

cs702 wrote: post #284

Before Burry's bets were disclosed, Palantir's trailing price-earnings ratio (P/E) peaked at 486x. What does that mean? I like to think about it this way: Absent growth, had a private investor purchased the business at 486x earnings, it would have taken the investor 486 years to recoup the investment. Only crazy-fast future growth could justify that multiple. I estimate earnings/share would have to grow 30-fold withi…

If a company has 1 billion in revenue and 999 million in costs, they are doing 1 million in earnings. It's trivially easy for them to grow earnings 30x, they can just decide to do it in most cases.

You have to look at the cost structure now v what it should be in a "steady state" situation, perhaps 10 years out.

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

#306

Post by chollida1 »

jb1991 wrote: post #294
cjbarber wrote: post #243

Article is misleading/wrong on the sizing: > Scion bought roughly $187.6 million in puts on Nvidia and $912 million in puts on Palantir, according to Securities and Exchange Commission filings. But 13F reports the market value of the underlying shares for options, not the premium paid for the options All we know is at time of filing he has 10k NVDA puts and 50k PLTR puts. We don't know the strike price or the duratio…

Personally I find the reporting of underlying value more useful than the price paid in puts, since it reflects the asset itself rather than an arbitrary price for an option that could be any of many different strikes or expirations. The option price itself is not that meaningful.

> Personally I find the reporting of underlying value more useful than the price paid in puts

How so?

If I buy TSLA puts at a $10 strike or a $500 strike they show up the exact same on the 13F as both have to be reported as if they are delta 1 when showing a share count.

One is a very meaningful bet and one is throwing money away.

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

#307

Post by svantana »

cs702 wrote: post #284

Before Burry's bets were disclosed, Palantir's trailing price-earnings ratio (P/E) peaked at 486x. What does that mean? I like to think about it this way: Absent growth, had a private investor purchased the business at 486x earnings, it would have taken the investor 486 years to recoup the investment. Only crazy-fast future growth could justify that multiple. I estimate earnings/share would have to grow 30-fold withi…

This math doesn't always hold up to common sense, as these ratios will explode when E hovers around zero, but it has a very small effect on the business itself.

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

#308

Post by Yizahi »

Jun8 wrote: post #246

I periodically read this ACT post to degauss my brain so I can think about these matters from a fresh perspective: https://www.astralcodexten.com/p/heuristics-that-almost-alwa...

This is a correct and at the same time rather misleading article. Sure, in principle it would be prudent to investigate literally everything every time. And he makes it sounds like not doing so makes a person literally 100% useless and dysfunctional. But he "forgets" to mention that investigation is non-free. And depending on the topic, the amount of such investigations and the length of each one can vary dramatically. Up to the point where whole life and all of the resources could be spent doing it.

Heuristics That Almost Always Work have a helpful hint right there in the name. They do work, and they do it almost every time. And depending on the topic that 99.99% may be even 100%, but we just can't reliably prove it. Stuff that works 99.99% of the time is very valuable and helps humans free resources and time for the less reliable or more severe problems. Or just for leisure. Personally, I invite author to go disprove every single idea on the internet and do it in careful and deep detail, let's see how long he would last without heuristics. :)

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

#310

Post by danielmarkbruce »

jb1991 wrote: post #298
Der_Einzige wrote: post #292

Earlier quoted context omitted.

Given how fucked it’s competition is and how the delta between CUDA/NCCL and everything else like rocm/zulda has only grown yeah, Nvidia will own the whole thing for minimum 10 years. Everyone who tried to compete failed hard because no one has the money, and raw talent or ability to get that talent needed to beat Nvidia at the software game.

This game is far from over and I find your prediction almost naive.

People have been talking about competing and trying to compete with the nvidia GPU/Cuda stack for almost 20 years (since the start). There have been various efforts. They have all fallen flat. Nvidia isn't standing still, the target keeps moving forward.

To suggest Nvidia will have the game to themselves for another 10 years might turn out to be wrong, but it isn't naive. You are the naive one here.

Post reply on HN