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Thankfully people that can’t admit when they’re wrong despite almost absurd evidence of their wrongness just don’t matter that much in economic bets. The peopl

Thankfully people that can’t admit when they’re wrong despite almost absurd evidence of their wrongness just don’t matter that much in economic bets. The people constantly predicting Tesla failure and shorting the stock lost all of their money. This guy won’t matter. You’d think people would learn to change their mind and update when massive economic incentives exist to do so, but often they don’t. Confirmation bias is a powerful thing.

XorNot 5y ago
Michael Burry was dead on the money that a crash was imminent in 2008, but he was still in serious danger of going bankrupt before it happened and his short would pay out.[1] "The market can remain irrational longer then you can remain solvent" is a saying for a reason. [1] https://en.wikipedia.org/wiki/Michael_Burry#cite_note-Burry-6 https://en.wikipedia.org/wiki/Michael_Burry#cite_note-Burry-...
- gonehome 5y ago
  He was also wrong about Tesla. There was a crash in 1999, but the underlying economic shift created by the internet was real and major companies survived it. I suspect something similar is likely here.
  - XorNot 5y ago
    You are not addressing the point: having enough capital to support a completely valid short position against an irrational market is staggeringly hard to do, to the point the most reliable short in history was still in danger of wiping out the person who was right about it and ended up making a huge amount of money from it.
    - gonehome 5y ago
      It’s somewhat of a tired point. You’re right of course and Michael Burry made a great trade recognizing the CDO issue and bad incentives around reselling mortgages leading to banks giving mortgages to people that couldn’t afford them and not taking the risk directly. It was also time bounded (he knew when the rates would change and they’d start to fail). That said, people often use the “market can remain irrational longer than you can remain solvent” line as an excuse - basically to say they’re right about an “impending crash” on an infinite timeline. If you can’t predict it within a bounded timeframe than your prediction is useless and ultimately equivalent to predicting nothing. In the case of the OP he was clearly wrong, and instead of updating is spinning it as he was kinda right anyway. I think that’s dumb.
      - XorNot 5y ago
        Which might be relevant if it was 20 years later, but it's not. Tesla's stock run-up preceded a number of unprecedented events that are all notably not associated with it's actual fiscal success. So it's incredibly vapid to a year later saying "see! It's not going to crash!" I mean sure...put your money where your mouth is on that one, but I'm not buying TSLA at $1096 per share.
        gonehome 5y ago
        The claim was that Tesla wouldn’t ship Model 3s successfully and would fail. That claim is false. The stock price today may be a bubble, I don’t know. But Burry’s comments were before the current run up.
        XorNot 5y ago
        The original comment was nothing about Burry. Burry is relevant because he did sucessfully make money off the GFC by spotting the issue. Barely: he was facing stockholder revolt over the fees involved in maintaining the position, even though it resolved. Which is the point: the market can (generally) remain irrational longer then you can remain solvent. Even when you're right.
- koonsolo 5y ago
  Michael Burry seems to be a broken clock. He was right once and wrong all the other times.
cyphertruck 5y ago
The most amazing thing about bitcoin is that it turns every disadvantage to an advantage. For example, the bias you are talking about means that the open minded and more virtuous people will adopt bitcoin earlier, and those who profit from the existing exploitive system much later. This produces a massive wealth transfer from evil to good.

XorNot 5y ago

Michael Burry was dead on the money that a crash was imminent in 2008, but he was still in serious danger of going bankrupt before it happened and his short would pay out.[1] "The market can remain irrational longer then you can remain solvent" is a saying for a reason. [1] https://en.wikipedia.org/wiki/Michael_Burry#cite_note-Burry-6 https://en.wikipedia.org/wiki/Michael_Burry#cite_note-Burry-...

gonehome 5y ago
He was also wrong about Tesla. There was a crash in 1999, but the underlying economic shift created by the internet was real and major companies survived it. I suspect something similar is likely here.
- XorNot 5y ago
  You are not addressing the point: having enough capital to support a completely valid short position against an irrational market is staggeringly hard to do, to the point the most reliable short in history was still in danger of wiping out the person who was right about it and ended up making a huge amount of money from it.
  - gonehome 5y ago
    It’s somewhat of a tired point. You’re right of course and Michael Burry made a great trade recognizing the CDO issue and bad incentives around reselling mortgages leading to banks giving mortgages to people that couldn’t afford them and not taking the risk directly. It was also time bounded (he knew when the rates would change and they’d start to fail). That said, people often use the “market can remain irrational longer than you can remain solvent” line as an excuse - basically to say they’re right about an “impending crash” on an infinite timeline. If you can’t predict it within a bounded timeframe than your prediction is useless and ultimately equivalent to predicting nothing. In the case of the OP he was clearly wrong, and instead of updating is spinning it as he was kinda right anyway. I think that’s dumb.
    - XorNot 5y ago
      Which might be relevant if it was 20 years later, but it's not. Tesla's stock run-up preceded a number of unprecedented events that are all notably not associated with it's actual fiscal success. So it's incredibly vapid to a year later saying "see! It's not going to crash!" I mean sure...put your money where your mouth is on that one, but I'm not buying TSLA at $1096 per share.
      - gonehome 5y ago
        The claim was that Tesla wouldn’t ship Model 3s successfully and would fail. That claim is false. The stock price today may be a bubble, I don’t know. But Burry’s comments were before the current run up.
        XorNot 5y ago
        The original comment was nothing about Burry. Burry is relevant because he did sucessfully make money off the GFC by spotting the issue. Barely: he was facing stockholder revolt over the fees involved in maintaining the position, even though it resolved. Which is the point: the market can (generally) remain irrational longer then you can remain solvent. Even when you're right.
koonsolo 5y ago
Michael Burry seems to be a broken clock. He was right once and wrong all the other times.

cyphertruck 5y ago

The most amazing thing about bitcoin is that it turns every disadvantage to an advantage. For example, the bias you are talking about means that the open minded and more virtuous people will adopt bitcoin earlier, and those who profit from the existing exploitive system much later. This produces a massive wealth transfer from evil to good.