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Investment personalities predicting crashes is a classic PR move, because if the predicted crash doesn't occur, there's no penalty. If it does, the person recei

Investment personalities predicting crashes is a classic PR move, because if the predicted crash doesn't occur, there's no penalty. If it does, the person receives universal permanent adulation. Ultimately, this nonsense preys on the public's misunderstanding about how markets work, and that all financial positions are bets, which express a measure of certainty in an uncertain outcome.

blackoil 5y ago
It should be easy to cite all the bad predictions he had made.
- polishTar 5y ago
  Well, that'd be exhausting, but it didn't take long to find that since he became a celeb-investor in late 2015 (when the movie came out), he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 (https://www.lombardiletter.com/michael-burry-stock-market-crash/10895/ https://www.lombardiletter.com/michael-burry-stock-market-cr...), in 2019 (https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry-says-he-has-found-the-next-market-bubble.html https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry...), and now obviously in 2021. Continually predicting the market is about to crash seems to be his thing.
  - rkk3 5y ago
    > Continually predicting the market is about to crash seems to be his thing. It's a story the press love & he has been type cast.
  - rualca 5y ago
    > he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-say https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 His predictions sound spot on. Here's what Burry said about the state of the economy back in 2017. > Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook. Now that half a decade passed between that article was published and right now, do you see any failure in the analysis?
lake_vincent 5y ago
Yeah, but at least he puts his money where his mouth is. His fund has huge puts on treasuries, and calls on food staples. Not just a PR move, his investments actually reflect his prediction.
- tambeb 5y ago
  >> Yeah, but at least he puts his money where his mouth is. I'd argue one could also interpret this as "putting his mouth where his money is."
  - what_ever 5y ago
    Doesn't work that because putting mouth is free, putting money isn't.
- inshadows 5y ago
  If I bet on, say, TSLA, I'm going to convince everyone that it's good bet. Why would he state his opinions about stock markets, without having his investments reflecting that opinion? I don't see how your statement adds any validity to his prediction. It's logical step. Short sellers put out such opinions all the time.
ItsMonkk 5y ago
I see Burry as a financial pen-tester. He researches very deeply into the mechanics of how the market works. He's looking into the code. Once he finds a bug, he finds what effects would occur if the bug occurs. Once he has found something with a big enough impact, then he asks what would trigger it to occur. In 2006 he found excessive margin being applied to housing. He saw that the Fed was raising their rates. He knew that it was inevitable that this would cause foreclosures. There were massive bets bigger than anything the system could bear, and in fact his bets were a piece of it. Was he early? Yes. Had he been later, would he have got a bigger return? Perhaps not. It was only that he was so early that no one else had a clue that he was given such amazing odds. Now he sees the bubble is happening because passive investing into the stock market through our 401k's has driven the smart money of the money into front-running that passive investment[0]. He's saying the massive 30% increase in the money supply after CO-VID is going straight into the stock market and that flow is drying up. Every stock is now far above their value, with their 'value' being their net future risk adjusted returns. Burry sees that this is unsustainable, and he sees that this bubble is now two times of magnitude as large as any other bubble ever created. When a small percentage of people pull their money from the being invested in passive funds, they will quickly overpower the buy pressure and the markets will drop, causing others to pull until they go to 0. His expectation is that once this starts to burst, the Fed is going to have no other choice than to do the same exact thing they did last time, and they have to react faster than last time with no way to think about it. They will print beyond ever thought possible or the system will fundamentally collapse. This is why he mentions Weimar Republic inflation. If 2008 was the previous largest bubble and that costs us 4T, two magnitude is a 400T problem. So he's asking what the economy will do when 400T is created in the blink of en eye. He's got his money where his mouth is. And particularly importantly, nothing he is saying now can affect the future. Either we are the Titanic, and we already hit the Iceburg, or he's wrong this time. Maybe he's early. But is he wrong? [0]: https://www.youtube.com/watch?v=x-rJciYZmi0 https://www.youtube.com/watch?v=x-rJciYZmi0
- boldslogan 5y ago
  >>He's got his money where his mouth is. Looking at his scion capital quarterly report, it seems he has a lot of his portfolio in puts (40%?) then the next 30% in calls then a mixed bag of stocks. https://whalewisdom.com/filer/scion-asset-management-llc#tabholdings_tab_link https://whalewisdom.com/filer/scion-asset-management-llc#tab... to me it seems he is more bearish on Tesla than the market? So it is hard to say he is against the entire market...? Judging by the gigantic position he has against them. Can you clarify what you mean here? Does he have other positions like puts on crypto?

blackoil 5y ago

It should be easy to cite all the bad predictions he had made.

polishTar 5y ago
Well, that'd be exhausting, but it didn't take long to find that since he became a celeb-investor in late 2015 (when the movie came out), he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 (https://www.lombardiletter.com/michael-burry-stock-market-crash/10895/ https://www.lombardiletter.com/michael-burry-stock-market-cr...), in 2019 (https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry-says-he-has-found-the-next-market-bubble.html https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry...), and now obviously in 2021. Continually predicting the market is about to crash seems to be his thing.
- rkk3 5y ago
  > Continually predicting the market is about to crash seems to be his thing. It's a story the press love & he has been type cast.
- rualca 5y ago
  > he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-say https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 His predictions sound spot on. Here's what Burry said about the state of the economy back in 2017. > Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook. Now that half a decade passed between that article was published and right now, do you see any failure in the analysis?

lake_vincent 5y ago

Yeah, but at least he puts his money where his mouth is. His fund has huge puts on treasuries, and calls on food staples. Not just a PR move, his investments actually reflect his prediction.

tambeb 5y ago
>> Yeah, but at least he puts his money where his mouth is. I'd argue one could also interpret this as "putting his mouth where his money is."
- what_ever 5y ago
  Doesn't work that because putting mouth is free, putting money isn't.
inshadows 5y ago
If I bet on, say, TSLA, I'm going to convince everyone that it's good bet. Why would he state his opinions about stock markets, without having his investments reflecting that opinion? I don't see how your statement adds any validity to his prediction. It's logical step. Short sellers put out such opinions all the time.

ItsMonkk 5y ago

I see Burry as a financial pen-tester. He researches very deeply into the mechanics of how the market works. He's looking into the code. Once he finds a bug, he finds what effects would occur if the bug occurs. Once he has found something with a big enough impact, then he asks what would trigger it to occur. In 2006 he found excessive margin being applied to housing. He saw that the Fed was raising their rates. He knew that it was inevitable that this would cause foreclosures. There were massive bets bigger than anything the system could bear, and in fact his bets were a piece of it. Was he early? Yes. Had he been later, would he have got a bigger return? Perhaps not. It was only that he was so early that no one else had a clue that he was given such amazing odds. Now he sees the bubble is happening because passive investing into the stock market through our 401k's has driven the smart money of the money into front-running that passive investment[0]. He's saying the massive 30% increase in the money supply after CO-VID is going straight into the stock market and that flow is drying up. Every stock is now far above their value, with their 'value' being their net future risk adjusted returns. Burry sees that this is unsustainable, and he sees that this bubble is now two times of magnitude as large as any other bubble ever created. When a small percentage of people pull their money from the being invested in passive funds, they will quickly overpower the buy pressure and the markets will drop, causing others to pull until they go to 0. His expectation is that once this starts to burst, the Fed is going to have no other choice than to do the same exact thing they did last time, and they have to react faster than last time with no way to think about it. They will print beyond ever thought possible or the system will fundamentally collapse. This is why he mentions Weimar Republic inflation. If 2008 was the previous largest bubble and that costs us 4T, two magnitude is a 400T problem. So he's asking what the economy will do when 400T is created in the blink of en eye. He's got his money where his mouth is. And particularly importantly, nothing he is saying now can affect the future. Either we are the Titanic, and we already hit the Iceburg, or he's wrong this time. Maybe he's early. But is he wrong? [0]: https://www.youtube.com/watch?v=x-rJciYZmi0 https://www.youtube.com/watch?v=x-rJciYZmi0

boldslogan 5y ago
>>He's got his money where his mouth is. Looking at his scion capital quarterly report, it seems he has a lot of his portfolio in puts (40%?) then the next 30% in calls then a mixed bag of stocks. https://whalewisdom.com/filer/scion-asset-management-llc#tabholdings_tab_link https://whalewisdom.com/filer/scion-asset-management-llc#tab... to me it seems he is more bearish on Tesla than the market? So it is hard to say he is against the entire market...? Judging by the gigantic position he has against them. Can you clarify what you mean here? Does he have other positions like puts on crypto?