4 ms·
Burry had a great play last year of shorting bonds via TLT, unfortunately he was about 6 months too early and his option positions expired before it collapsed.
by cloudking 4y ago
Burry had a great play last year of shorting bonds via TLT, unfortunately he was about 6 months too early and his option positions expired before it collapsed. His thesis was based on "hyperinflation" occuring in the USA, and while inflation has increased it's still far from "hyper". Point is, his thesis may be correct, but his time horizon may also be off.
- IAmGraydon 4y agoBeing early is the same thing as being wrong.
- cloudking 4y agoAbsolutely, that's why it's important to look at his other bets not just his big win in the GFC.
- ttul 4y agoAnd herein lies the problem with being contrarian. It’s impossible to be both contrarian and correct with sufficient reliability that you beat the market. You will get it right sometimes and wrong other times. But not consistently. Everyone should go and read A Random Walk Down Wall St and Irrational Exuberance. For a retail investor, the first book teaches you that beating the market is a random process, so there is no point in trying. Any advantage you gain from being smart will be paid for in time invested in being smart enough to beat the market. Irrational Exuberance teaches the retail investor that markets go through long, yet unpredictable, periods of irrational behavior. Even experts struggle to explain the movements of the market, so as a lowly retail investor, you’re unlikely to have any chance at winning the game. Ultimately, while each book looks at the world in a contrasting way - one assumes investors are collectively rational and the other assumes the opposite - the lesson is the same for a retail investor: just live your life, invest passively, and give up on trying to get rich quick in the market because it’s random whether you’ll succeed.