3 ms·

I don't think that's a sign of Burry being wrong, it very well could mean he couldn't stay solvent in that position longer than the irrationality of the market.

chillacy 5y ago
> irrationality of the market The idea that the market can be irrational presumes some sort of external correctness, but it can become a circular definition: either Burry is right or the market is irrational, there is no space to say that he's wrong. It's useful to remember that all models, including looking at fundamentals and value based investing, made to approximate reality, not reality itself.
H8crilA 5y ago
That's what I keep telling myself too. I've shorted TSLA way before Bury, and already made my peace with the losses. The truth is that if you get squeezed out of a short you were wrong. The result is all that matters. This kind of stuff is why most investors do not ever short anything at all (best example: Buffett & Munger), as you can be "right" and still lose. On the long side you cannot be squeezed out of a position. Traders, market makers and other "technical" participants such as HFTs - that's a different story, their use of shorting is kind of more sensible.
koonsolo 5y ago
The "irrationality of the market" is most of the time just blaming everyone else for your own mistake. "I was right, it's just that the whole market keeps being wrong". Denial at its finest.
- dnautics 5y ago
  Not if it eventually crashes, you had given a mechanism, and the mechanism was indeed the causal factor in the eventual crash.
  - koonsolo 5y ago
    That is true. But most of the time when I see it used, it's "it will eventually crash just wait and see.... wait for it.... wait for it ..."
  - paxys 5y ago
    The market always eventually crashes. The question is whether it will be tomorrow or 20 years from now. Unless your prediction also comes with a specific date it is useless.
    - dnautics 5y ago
      Sure, but you can definitely lose a lot of money, give up, and watch the asset crash a few weeks after you called it.

chillacy 5y ago

> irrationality of the market The idea that the market can be irrational presumes some sort of external correctness, but it can become a circular definition: either Burry is right or the market is irrational, there is no space to say that he's wrong. It's useful to remember that all models, including looking at fundamentals and value based investing, made to approximate reality, not reality itself.

H8crilA 5y ago

That's what I keep telling myself too. I've shorted TSLA way before Bury, and already made my peace with the losses. The truth is that if you get squeezed out of a short you were wrong. The result is all that matters. This kind of stuff is why most investors do not ever short anything at all (best example: Buffett & Munger), as you can be "right" and still lose. On the long side you cannot be squeezed out of a position. Traders, market makers and other "technical" participants such as HFTs - that's a different story, their use of shorting is kind of more sensible.

koonsolo 5y ago

The "irrationality of the market" is most of the time just blaming everyone else for your own mistake. "I was right, it's just that the whole market keeps being wrong". Denial at its finest.

dnautics 5y ago
Not if it eventually crashes, you had given a mechanism, and the mechanism was indeed the causal factor in the eventual crash.
- koonsolo 5y ago
  That is true. But most of the time when I see it used, it's "it will eventually crash just wait and see.... wait for it.... wait for it ..."
- paxys 5y ago
  The market always eventually crashes. The question is whether it will be tomorrow or 20 years from now. Unless your prediction also comes with a specific date it is useless.
  - dnautics 5y ago
    Sure, but you can definitely lose a lot of money, give up, and watch the asset crash a few weeks after you called it.