Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
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Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#2The bet against market from someone like him is bot unusual, but the size of the bet: 80% of his portfolio?
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#3The bet against market from someone like him is bot unusual, but the size of the bet: 80% of his portfolio?
It isn’t. CNN and many others have awful financial literacy and reporting standards.
The 13F notional value calculations are horrendous. There is simply no way of knowing how big of a bet it is, but I can all but guarantee that it isn’t remotely close to 80% of his portfolio.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#4The bet against market from someone like him is bot unusual, but the size of the bet: 80% of his portfolio?
It isn’t. CNN and many others have awful financial literacy and reporting standards. The 13F notional value calculations are horrendous. There is simply no way of knowing how big of a bet it is, but I can all but guarantee that it isn’t remotely close to 80% of his portfolio.
heck, it might even be larger-than-usual hedge where he thinks a crash is possible and the reward is relatively high to the small loss he'd be making, there's a lot of nuance skipped over here.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#5The bet against market from someone like him is bot unusual, but the size of the bet: 80% of his portfolio?
He has bought options... This is just a contract with a nominal fee attached to buy or sell an instrument at a pre determined price at a point in the future. The fee a small amount compared to the price of the share. So yeah he has tied up a small amount of capital to do this.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#6The bet against market from someone like him is bot unusual, but the size of the bet: 80% of his portfolio?
It isn’t. CNN and many others have awful financial literacy and reporting standards. The 13F notional value calculations are horrendous. There is simply no way of knowing how big of a bet it is, but I can all but guarantee that it isn’t remotely close to 80% of his portfolio.
You are right. I'm one that believes that the market will continue its downturn for a few more weeks but there's no way I would bet 80% of my portfolio even if I was 99.99% sure of a downturn. I know better and I'm an amateur. Burry is a professional, he knows better than to be so reckless. The news article is just reporting nonsense. With options it's easy to lose it all even if ultimately you were right since options expire after a period of time. You have to be very careful if you decide to use them as an investment tool. I have no doubt he's betting on a downturn but he's not betting most of his assets. What ever it is, it's small relative to his portfolio.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#7Simultaneous debt collapse and global de-dollarization: good luck timing this one.
Knowing that the markets are massively distorted and unsustainable gets you nothing. Knowing the next wave of irrational distortion gets you good long-term returns. Good timing is either pure luck, insider information, or outright manipulation.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#8Earlier quoted context omitted.
It isn’t. CNN and many others have awful financial literacy and reporting standards. The 13F notional value calculations are horrendous. There is simply no way of knowing how big of a bet it is, but I can all but guarantee that it isn’t remotely close to 80% of his portfolio.
You are right. I'm one that believes that the market will continue its downturn for a few more weeks but there's no way I would bet 80% of my portfolio even if I was 99.99% sure of a downturn. I know better and I'm an amateur. Burry is a professional, he knows better than to be so reckless. The news article is just reporting nonsense. With options it's easy to lose it all even if ultimately you were right since optio…
He's also basically shorting S&P and Nasdaq ETFs - $1.8billion is a blip against these, like throwing a pebble at an oil tanker...yet the article seems to have an air about it like the very presence of this man and this money is enough to help precipitate his expected downturn.
The market does seem overpriced at the moment, particularly stocks like Nvidia undergoing some kind of correction, but it seems that the medium term trajectory is on the rise. I'm not sure what kind of huge downturn the market isn't going to be able to account for when phenomenal, unprecedented shocks like COVID are something it took in its stride even though prices are still recovering due to the debt so many companies took on. The bullish run of the past 6 months seems to have taken analysts by surprise so to be expected that some of them are now betting against its turn in the other direction.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#9Apparently he did this a while ago its just hitting the news now. As they say, its hard to time the market and it can remain illogical longer than you remain solvent. But hey I dont know verify what I say too.
Re: Michael Burry, of Big Short fame, just bet $1.6B on a stock market crash
#10Apparently he did this a while ago its just hitting the news now. As they say, its hard to time the market and it can remain illogical longer than you remain solvent. But hey I dont know verify what I say too.
> it can remain illogical longer than you remain solvent
I don't know the details in real life, but in the movie he was mildly early and losing money for a long time before the move started realizing. I and heard rumors that there were other players that were even earlier and had to close their positions before it realized in order to avoid going bankrupt.
BRB buying the book.