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Michael Burry shorts Major index in sizable bets

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Re: Michael Burry shorts Major index in sizable bets

#51

Post by thunky »

senthil_rajasek wrote: post #23

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…

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

No, because you will be wrong and your financial advisor will be wrong too.

The better lesson is: don't try to outsmart or time the market.

Re: Michael Burry shorts Major index in sizable bets

#52

Post by senthil_rajasek »

thunky wrote: post #51
senthil_rajasek wrote: post #23

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…

> The lesson here is always do your own homework. Or get a trusted financial advisor No, because you will be wrong and your financial advisor will be wrong too. The better lesson is: don't try to outsmart or time the market.

Or Do your own homework and you might conclude that it's no use timing the market?

Re: Michael Burry shorts Major index in sizable bets

#53

Post by deadeye »

the_only_law wrote: post #44
thefourthchime wrote: post #32

FWIW: Clark Howard, a finance guy I highly regard, predicts that the 4th quarter will see a softening of the economy. His reasoning is that the regional banks are being extremely tight with lending right now, and by the fourth quarter many small/medium businesses will have trouble staying afloat due to the lack of financing.

A lot of the small businesses near me are already collapsing, though it seems a lot of that is delayed downfall from Covid.

Where is that? There are lots of regional issues.

Re: Michael Burry shorts Major index in sizable bets

#54

Post by weard_beard »

thefourthchime wrote: post #42
ivalm wrote: post #34

Earlier quoted context omitted.

But are small businesses that important at this point?

They employ about half the jobs in America, so yeah.

but are the jobs and people who work them that important? that's like, 1/5 of the annual salaries on wallstreet.

Re: Michael Burry shorts Major index in sizable bets

#55

Post by weard_beard »

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?

Of the two possible ways to bet against the market we are discussing Burry chose the one with less immediate downside if you have to wait to be right. But there isn't much difference.

Re: Michael Burry shorts Major index in sizable bets

#56

Post by goodbyesf »

thefourthchime wrote: post #32

FWIW: Clark Howard, a finance guy I highly regard, predicts that the 4th quarter will see a softening of the economy. His reasoning is that the regional banks are being extremely tight with lending right now, and by the fourth quarter many small/medium businesses will have trouble staying afloat due to the lack of financing.

> FWIW: Clark Howard, a finance guy I highly regard, predicts that the 4th quarter will see a softening of the economy.

Highly regarded finance guys aren't podcasters or media personalities. If the guy could predict the direction of the economy, he'd be a trillionaire living his best life. Not peddling silly books and hosting podcasts. But then again, jim cramer has a following. How do explain that other than the masses are naive.

> His reasoning is that the regional banks are being extremely tight with lending right now, and by the fourth quarter many small/medium businesses will have trouble staying afloat due to the lack of financing.

He is just parroting nonsense he saw on cnbc or read in a newspaper or on social media. Just like every grifter out there. Do you really think he has inside connections to all the regional banks? To the FED?

Re: Michael Burry shorts Major index in sizable bets

#57

Post by thefourthchime »

goodbyesf wrote: post #56
thefourthchime wrote: post #32

FWIW: Clark Howard, a finance guy I highly regard, predicts that the 4th quarter will see a softening of the economy. His reasoning is that the regional banks are being extremely tight with lending right now, and by the fourth quarter many small/medium businesses will have trouble staying afloat due to the lack of financing.

> FWIW: Clark Howard, a finance guy I highly regard, predicts that the 4th quarter will see a softening of the economy. Highly regarded finance guys aren't podcasters or media personalities. If the guy could predict the direction of the economy, he'd be a trillionaire living his best life. Not peddling silly books and hosting podcasts. But then again, jim cramer has a following. How do explain that other than the mas…

Fair, he is a media personality. That said, I've read a Jim Cramer book, I've listened to Dave Ramsey. Those guys are charlatans selling mysterious wisdom and, frankly, bullshit. Clark Howard doesn't do any of that.

Dave Ramsey once said anyone should be able to get a 12% return in a mutual fund. What?? Jim Cramer's constantly picking stocks and is about as good as a drunk monkey with a dartboard.

Everything Clark Howard has said that I've looked at doing, I've vetted and researched. Sometimes he gets it wrong, but I believe he is an honest actor and just trying to help people "Save money, Spend less, and avoid getting ripped off."

Honestly, nobody knows, but I put more weight on his take than most.

Re: Michael Burry shorts Major index in sizable bets

#58

Post by huijzer »

I still don’t get why he wouldn’t just wait for the crash and then buy the index. Shorting has 100% upside at most and infinite downside. Going long has infinite upside and at most 100% downside. Buffett has gotten pretty rich by buying during crashes, so you can’t say it doesn’t work.

Re: Michael Burry shorts Major index in sizable bets

#59

Post by piva00 »

weard_beard wrote: post #54
thefourthchime wrote: post #42

Earlier quoted context omitted.

They employ about half the jobs in America, so yeah.

but are the jobs and people who work them that important? that's like, 1/5 of the annual salaries on wallstreet.

Yes, of course it's important, they're people for fucks sake, with lives and salaries for expenses that move the economy.

What does it matter it's 1/5 of Wall Street salaries? Even worse, saying they aren't "important" because of how much they earn, I feel disgusted reading this comment...

Re: Michael Burry shorts Major index in sizable bets

#60

Post by once_inc »

slashdev wrote: post #36
senthil_rajasek wrote: post #23

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…

He can be wrong on the timing but right on the prediction. I think he could still be right here in 2024. Certainly he was right about inflation peaking. So now is that recession still to come or not?

He was wrong on the timing in 2007 as well. The only reason his short position was vindicated is that he held on despite the protests of his investors. Burry would have been rekt if the collapse had come later.
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