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Contrarians betting against the herd have often been very successful. For example, John Paulson and Michael Burry made billions by shorting CDOs that lead to th

Contrarians betting against the herd have often been very successful. For example, John Paulson and Michael Burry made billions by shorting CDOs that lead to the 2008 crisis. The movie "The Big Short" is an Ok dramatization of how it all unfolded. Same herd mentality, different soapbox.

Corgipower12 1y ago
I wonder if it is because we hear about people who are successful betting against the herd.
- mathgeek 1y ago
  This is certainly part of it. The survivors write the narrative.
- Ekaros 1y ago
  Markets can stay irrational longer than you can stay solvent... We just rarely present those who became insolvent unless it was massive screwup. And even then, well they don't get movies.
chistev 1y ago
"Be greedy when others are fearful, and fearful when others are greedy"???
- kylecazar 1y ago
  I'd say the short was more like "when others are greedy, be greedy and aware". Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
  - chistev 1y ago
    what does it mean to be aware?
    - deleted 1y ago
      [deleted]
    - Corgipower12 1y ago
      My 2 cents TLDR: seize opportunity but based on sound analysis and caution, not blind optimism. I think they are saying something of the effect of: 1. The short trade (The Big Short or similar trades during the housing bubble) happened during a period of market euphoria. I.e. when most investors were irrationally confident and greedy. 2. Instead of sitting out or being fearful (as Buffett's original advice would suggest), the people who shorted the market took an aggressive position. They were indeed "greedy" in the sense of seeking profit, but they did so with deep awareness of the systemic risk that others were ignoring.
      - kylecazar 1y ago
        Precisely my take, thanks for the elaboration!
antifa 1y ago
Are they actually contrarians or are they people who were looking deeply into the topic and noticed both a bubble and an opportunity?

Corgipower12 1y ago

I wonder if it is because we hear about people who are successful betting against the herd.

mathgeek 1y ago
This is certainly part of it. The survivors write the narrative.
Ekaros 1y ago
Markets can stay irrational longer than you can stay solvent... We just rarely present those who became insolvent unless it was massive screwup. And even then, well they don't get movies.

chistev 1y ago

"Be greedy when others are fearful, and fearful when others are greedy"???

kylecazar 1y ago
I'd say the short was more like "when others are greedy, be greedy and aware". Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
- chistev 1y ago
  what does it mean to be aware?
  - deleted 1y ago
    [deleted]
  - Corgipower12 1y ago
    My 2 cents TLDR: seize opportunity but based on sound analysis and caution, not blind optimism. I think they are saying something of the effect of: 1. The short trade (The Big Short or similar trades during the housing bubble) happened during a period of market euphoria. I.e. when most investors were irrationally confident and greedy. 2. Instead of sitting out or being fearful (as Buffett's original advice would suggest), the people who shorted the market took an aggressive position. They were indeed "greedy" in the sense of seeking profit, but they did so with deep awareness of the systemic risk that others were ignoring.
    - kylecazar 1y ago
      Precisely my take, thanks for the elaboration!

antifa 1y ago

Are they actually contrarians or are they people who were looking deeply into the topic and noticed both a bubble and an opportunity?