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I don’t know a whole lot about professional investing, but if watching The Big Short has taught me anything it’s that the pros will say one thing publicly but d

I don’t know a whole lot about professional investing, but if watching The Big Short has taught me anything it’s that the pros will say one thing publicly but do the opposite in private until it’s to their advantage to do a 180 and make their private stance actually public. Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. The following exchange from The Big Short stuck with me. It’s Dr. Burry’s response to Goldman Sachs when they finally returned his numerous calls: Deeb: Dr. Burry? Burry: Yeah. Deeb: Deeb Winston, Goldman Sachs. Listen, I've been reviewing your position. I wanted to discuss your marks and make sure they're fair. Burry: Yeah, I think you mean that you've secured a net short position yourselves. So you're free to mark my swaps accurately for once because it's now in your interest to do so. Deeb: I'm not sure what you want me to say. Burry: I think that...I think that you've already said it.

jonmc12 6y ago
https://finbox.com/ideas/ray-dalio https://finbox.com/ideas/ray-dalio
- Scoundreller 6y ago
  Holdings here: https://www.sec.gov/Archives/edgar/data/1350694/000156761921003290/xslForm13F_X01/form13fInfoTable.xml https://www.sec.gov/Archives/edgar/data/1350694/000156761921...
- ROARosen 6y ago
  Big fund holdings (without knowing their full strategy) are insightful, but only in the sense that you can see how many big funds are holding a particular stock. Looking just at holdings of any one fund can be pointless since you never know how these holding are part of some bigger strategy especially when you don't know what other derivatives they're holding like options / futures and other non publicly traded products. Any particular holding might also be part of a bigger ploy. It can be part of a hedge / bet / short / or acquisition strategy. Any single holding can also be part of multiple portfolios within one fund each with their own diverse investment goals.
  - infinite8s 6y ago
    Also shorts aren't required to be published in SEC disclosure forms, so for a market neutral long-short fund you're only seeing half the picture.
fakedang 6y ago
> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. But Jamie Dimon also has a reputation of not being the smartest bulb in the block, and also being overly cautious so.... I think the GP statement is more correct though. A lot of fund managers love to gloat about their positions rather than talk the inverse.
- cosmodisk 6y ago
  You don't become a CEO of a large bank by being the smartest,this title usually belongs to the ones a few steps below.
  - WJW 6y ago
    Perhaps a few quants in the bank have higher IQ, but you don't make it to CEO of a large bank by being stupid. A carefully cultivated image of being "not the smartest bulb" can be a powerful advantage. Making dumb mistakes when it doesn't matter can make people underestimate you at more crucial moments.
    - MegaButts 6y ago
      It's generally agreed upon that the CEO of Bank of America during the 2008 financial crisis is an idiot.
    - fakedang 6y ago
      Lol, this is some nth order thought going on here. Simon's dimness isn't proofed by some bullshit crafted image but by how laggardly JPMorgan is due to Dimon's innate cautiousness. Dimon is just lucky to be head of America's largest bank at the turn of '08. Next you'll tell me IBM is a highly innovative company, I reckon.
    - cosmodisk 6y ago
      I didn't mean the CEOs of large financial institutions are stupid( at least not most of them). To get to such positions by only being smart is never enough: there's a plethora of skills and personal traits that play their part.
JMTQp8lwXL 6y ago
On this topic, I've seen news reports that the GME short squeeze will happen 'any day now' according to analysts. Now, that initially makes me believe they're attempting to encourage buying, which raises prices. (In prior weeks, financial media implored retail to get out; there has been a very apparent shift in sentiment). Assuming financial media is a mouthpiece for key market participants, I found the reports surprising. Unless it's a 3D chess move: since we all so publicly are aware their statements have negative correlation to their securities positions, perhaps the rules for interpreting public statements have changed. If they always act as predictably as stated, there's too obvious of an arbitrage opportunity.
- grupthink 6y ago
  Don't overthink it. They just want to sell to retail at the highest price possible. Either they want to short GME or they want to unload their current positions.
csomar 6y ago
> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. Did he change his position, though. Having a negative opinion of something is one thing; and profiting from selling shovels for the gold rush is another thing. The trading desk is not a long position.
- dmurray 6y ago
  In the case of bitcoin, it probably is. Legitimising bitcoin as an investment for institutionals pushes the price higher, and also increases trading volumes and thereby trading profits. In contrast with stocks, where a sell off generally brings volatility and good news to trading desks.
  - smeyer 6y ago
    Just because adds some legitimacy and pushes bitcoin prices higher doesn't have to mean that JPM (let alone Dimon himself) has a long position nor a longterm positive belief in bitcoin. Maybe they do! But maybe they just want to make some money selling shovels.
koheripbal 6y ago
Generally investors want to convince other investors of the truth (as they see it) once they've already made the bet. The exception to that rule is if you have trouble getting OUT of an illiquid position (as in the example you quote) - then you don't want to panic other investors before you've successfully taken the other side.
- dmurray 6y ago
  That's the same rule, rather than an exception. You don't want to influence the other investors because you haven't "already made the bet".
altcognito 6y ago
Unless they are trying to move markets, which they do all the time. I mean, the entire WSB subreddit is basically dedicated to this.
- IgorPartola 6y ago
  I’ve been watching WSB with interest for a bit. This has not been what they’ve been about until January of this year. Before it was basically a place where the one eyed were leading the blind: someone would post their research on a particular play, like buying TSLA options for a particular date at a particular price because they think the phase of the moon and the mood of the CEO will line up to give the stock price a bump, and then everyone putting their 401k savings all into that play because it sounded plausible. Sometimes it would pay off, often it resulted in people losing lots of money. The “specialness” of the community came from when people posted “loss porn” aka screenshots of their accounts with huge losses, people would basically be really encouraging towards the poster. It was a sort of sign of respect that you risked it all and lost. Actually buying stock and not just options is brand new to that group, and they have nearly doubled in size since January so it seems to be going through serious transitions. Now they are doing what they can to put the thumb on the scale to squeeze hedge funds out of their GME positions. The crux of it is whether enough shorts have been made to make this possible and the rumor de jour is that hedge funds misreport their positions. Whether this is true or not, well if you look at WSB posts they’ll say it’s obviously true. I am not convinced personally. To be clear, WSB to me appears to be doing absolutely nothing illegal or wrong to manipulate the market. The only coordinated effort is to buy GME and AMC and not sell the stock unless it seriously goes up in value (current posts think it’ll go to $10k-100k). They suspect hedge funds are performing ladder attacks to lower the price, so every time the price dips the advice is to buy more. I don’t see how simply buying stock at market price is market manipulation except that it does have an effect on the volume of a particular stock.
  - eru 6y ago
    What's a ladder attack?
    - 6y ago
cosmodisk 6y ago
I think this is quite normal for larger corporations. At any given time they operate on multiple layers and they may not even be compatible with each other: there's the public image of the company, revenue targets, political pirouette,or internal battles between departments. Even in a small company I had enough situations where I have to say one thing but do the opposite.
eru 6y ago
I wouldn't rely on the Big Short for anything..
- dsr_ 6y ago
  It's critical to explaining that investment banks can be wrong, stupid, or both for very long periods of time, and that can make the whole world worse off.
- valuearb 6y ago
  The book or the movie? Because the book was very well researched, and the film was a very accurate summation of the book.
jgalt212 6y ago
> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. JPM Chase has 250K employees. Do you think Jamie was made aware every time the markets division took a hard look at crypto?
- refurb 6y ago
  Not only that, there is a difference between thinking crypto is a fad and creating a trading desk to profit off that fad.
- obmelvin 6y ago
  Considering he said in 2017 [0] that he would fire anyone trading Bitcoin for being "stupid", yes, the GP's astonishment about Jamie Dimon is well placed. [0] - https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-...
  - valuearb 6y ago
    Do you understand the difference between brokering trades for clients, and what you allow employees to trade using the banks capital? There are all sorts of arbitrage and correlation trades to be made in bonds, stocks and similar securities (mortgages) because they all have intrinsic values or maturity dates, etc. To protect the banks capital it’s important to restrict the types of trades allowed, and to disallow pure speculation. Jamie in that article describes cryptocurrencies as pure speculation because they have no intrinsic value, which is why he said he’d never allow employees to trade them. But one thing I believe about Jamie Dimon is that he has a sharp and flexible mind. If the newer innovations in the DeFi markets around crypto convince him he’s wrong about cryptocurrencies, he will turn on a dime. While still putting in adequate safeguards for his banks capital.
floor2 6y ago
It's great that you recognize professional investing isn't something you know a lot about. It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.
- stjohnswarts 6y ago
  What they said is a basic property of humans who value money (object of value) over morals, it's hardly limited to wall street. Whether it's depicted in a hollywood flick or medieval morality play. It's as old as humanity
- TuringNYC 6y ago
  While clearly not all of Hollywood portrays the industry accurately, from my perspective the movie was incredibly reflective of the players in the space, and the dynamics. I worked in the mortgage/CDO/CDS industry for 10yrs during that period (2005-2015). If anything, the movie was too positive. There aren't as many players like Steve Carell's character who are worried about the world, they are usually worried about how to liquidate their book at the right time. The bit about getting marked the wrong way was especially spot on. Another very accurate movie: "Margin Call"
  - pc86 6y ago
    > Another very accurate movie: "Margin Call" Jeremy Irons is fantastic in this film. The entire board room scene is amazing.
    - TuringNYC 6y ago
      The distinct personalities in the movie also perfectly represent the typical archetypes in these situations and firms.
    - harryh 6y ago
      One of my answers for "Best scene about a meeting in film" (a super fun question).

jonmc12 6y ago

https://finbox.com/ideas/ray-dalio https://finbox.com/ideas/ray-dalio

Scoundreller 6y ago
Holdings here: https://www.sec.gov/Archives/edgar/data/1350694/000156761921003290/xslForm13F_X01/form13fInfoTable.xml https://www.sec.gov/Archives/edgar/data/1350694/000156761921...
ROARosen 6y ago
Big fund holdings (without knowing their full strategy) are insightful, but only in the sense that you can see how many big funds are holding a particular stock. Looking just at holdings of any one fund can be pointless since you never know how these holding are part of some bigger strategy especially when you don't know what other derivatives they're holding like options / futures and other non publicly traded products. Any particular holding might also be part of a bigger ploy. It can be part of a hedge / bet / short / or acquisition strategy. Any single holding can also be part of multiple portfolios within one fund each with their own diverse investment goals.
- infinite8s 6y ago
  Also shorts aren't required to be published in SEC disclosure forms, so for a market neutral long-short fund you're only seeing half the picture.

fakedang 6y ago

> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. But Jamie Dimon also has a reputation of not being the smartest bulb in the block, and also being overly cautious so.... I think the GP statement is more correct though. A lot of fund managers love to gloat about their positions rather than talk the inverse.

cosmodisk 6y ago
You don't become a CEO of a large bank by being the smartest,this title usually belongs to the ones a few steps below.
- WJW 6y ago
  Perhaps a few quants in the bank have higher IQ, but you don't make it to CEO of a large bank by being stupid. A carefully cultivated image of being "not the smartest bulb" can be a powerful advantage. Making dumb mistakes when it doesn't matter can make people underestimate you at more crucial moments.
  - MegaButts 6y ago
    It's generally agreed upon that the CEO of Bank of America during the 2008 financial crisis is an idiot.
  - fakedang 6y ago
    Lol, this is some nth order thought going on here. Simon's dimness isn't proofed by some bullshit crafted image but by how laggardly JPMorgan is due to Dimon's innate cautiousness. Dimon is just lucky to be head of America's largest bank at the turn of '08. Next you'll tell me IBM is a highly innovative company, I reckon.
  - cosmodisk 6y ago
    I didn't mean the CEOs of large financial institutions are stupid( at least not most of them). To get to such positions by only being smart is never enough: there's a plethora of skills and personal traits that play their part.

JMTQp8lwXL 6y ago

On this topic, I've seen news reports that the GME short squeeze will happen 'any day now' according to analysts. Now, that initially makes me believe they're attempting to encourage buying, which raises prices. (In prior weeks, financial media implored retail to get out; there has been a very apparent shift in sentiment). Assuming financial media is a mouthpiece for key market participants, I found the reports surprising. Unless it's a 3D chess move: since we all so publicly are aware their statements have negative correlation to their securities positions, perhaps the rules for interpreting public statements have changed. If they always act as predictably as stated, there's too obvious of an arbitrage opportunity.

grupthink 6y ago
Don't overthink it. They just want to sell to retail at the highest price possible. Either they want to short GME or they want to unload their current positions.

csomar 6y ago

> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. Did he change his position, though. Having a negative opinion of something is one thing; and profiting from selling shovels for the gold rush is another thing. The trading desk is not a long position.

dmurray 6y ago
In the case of bitcoin, it probably is. Legitimising bitcoin as an investment for institutionals pushes the price higher, and also increases trading volumes and thereby trading profits. In contrast with stocks, where a sell off generally brings volatility and good news to trading desks.
- smeyer 6y ago
  Just because adds some legitimacy and pushes bitcoin prices higher doesn't have to mean that JPM (let alone Dimon himself) has a long position nor a longterm positive belief in bitcoin. Maybe they do! But maybe they just want to make some money selling shovels.

koheripbal 6y ago

Generally investors want to convince other investors of the truth (as they see it) once they've already made the bet. The exception to that rule is if you have trouble getting OUT of an illiquid position (as in the example you quote) - then you don't want to panic other investors before you've successfully taken the other side.

dmurray 6y ago
That's the same rule, rather than an exception. You don't want to influence the other investors because you haven't "already made the bet".

altcognito 6y ago

Unless they are trying to move markets, which they do all the time. I mean, the entire WSB subreddit is basically dedicated to this.

IgorPartola 6y ago
I’ve been watching WSB with interest for a bit. This has not been what they’ve been about until January of this year. Before it was basically a place where the one eyed were leading the blind: someone would post their research on a particular play, like buying TSLA options for a particular date at a particular price because they think the phase of the moon and the mood of the CEO will line up to give the stock price a bump, and then everyone putting their 401k savings all into that play because it sounded plausible. Sometimes it would pay off, often it resulted in people losing lots of money. The “specialness” of the community came from when people posted “loss porn” aka screenshots of their accounts with huge losses, people would basically be really encouraging towards the poster. It was a sort of sign of respect that you risked it all and lost. Actually buying stock and not just options is brand new to that group, and they have nearly doubled in size since January so it seems to be going through serious transitions. Now they are doing what they can to put the thumb on the scale to squeeze hedge funds out of their GME positions. The crux of it is whether enough shorts have been made to make this possible and the rumor de jour is that hedge funds misreport their positions. Whether this is true or not, well if you look at WSB posts they’ll say it’s obviously true. I am not convinced personally. To be clear, WSB to me appears to be doing absolutely nothing illegal or wrong to manipulate the market. The only coordinated effort is to buy GME and AMC and not sell the stock unless it seriously goes up in value (current posts think it’ll go to $10k-100k). They suspect hedge funds are performing ladder attacks to lower the price, so every time the price dips the advice is to buy more. I don’t see how simply buying stock at market price is market manipulation except that it does have an effect on the volume of a particular stock.
- eru 6y ago
  What's a ladder attack?
  - 6y ago

cosmodisk 6y ago

I think this is quite normal for larger corporations. At any given time they operate on multiple layers and they may not even be compatible with each other: there's the public image of the company, revenue targets, political pirouette,or internal battles between departments. Even in a small company I had enough situations where I have to say one thing but do the opposite.

eru 6y ago

I wouldn't rely on the Big Short for anything..

dsr_ 6y ago
It's critical to explaining that investment banks can be wrong, stupid, or both for very long periods of time, and that can make the whole world worse off.
valuearb 6y ago
The book or the movie? Because the book was very well researched, and the film was a very accurate summation of the book.

jgalt212 6y ago

> Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. JPM Chase has 250K employees. Do you think Jamie was made aware every time the markets division took a hard look at crypto?

refurb 6y ago
Not only that, there is a difference between thinking crypto is a fad and creating a trading desk to profit off that fad.
obmelvin 6y ago
Considering he said in 2017 [0] that he would fire anyone trading Bitcoin for being "stupid", yes, the GP's astonishment about Jamie Dimon is well placed. [0] - https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-...
- valuearb 6y ago
  Do you understand the difference between brokering trades for clients, and what you allow employees to trade using the banks capital? There are all sorts of arbitrage and correlation trades to be made in bonds, stocks and similar securities (mortgages) because they all have intrinsic values or maturity dates, etc. To protect the banks capital it’s important to restrict the types of trades allowed, and to disallow pure speculation. Jamie in that article describes cryptocurrencies as pure speculation because they have no intrinsic value, which is why he said he’d never allow employees to trade them. But one thing I believe about Jamie Dimon is that he has a sharp and flexible mind. If the newer innovations in the DeFi markets around crypto convince him he’s wrong about cryptocurrencies, he will turn on a dime. While still putting in adequate safeguards for his banks capital.

floor2 6y ago

It's great that you recognize professional investing isn't something you know a lot about. It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.

stjohnswarts 6y ago
What they said is a basic property of humans who value money (object of value) over morals, it's hardly limited to wall street. Whether it's depicted in a hollywood flick or medieval morality play. It's as old as humanity
TuringNYC 6y ago
While clearly not all of Hollywood portrays the industry accurately, from my perspective the movie was incredibly reflective of the players in the space, and the dynamics. I worked in the mortgage/CDO/CDS industry for 10yrs during that period (2005-2015). If anything, the movie was too positive. There aren't as many players like Steve Carell's character who are worried about the world, they are usually worried about how to liquidate their book at the right time. The bit about getting marked the wrong way was especially spot on. Another very accurate movie: "Margin Call"
- pc86 6y ago
  > Another very accurate movie: "Margin Call" Jeremy Irons is fantastic in this film. The entire board room scene is amazing.
  - TuringNYC 6y ago
    The distinct personalities in the movie also perfectly represent the typical archetypes in these situations and firms.
  - harryh 6y ago
    One of my answers for "Best scene about a meeting in film" (a super fun question).