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Thread: Michael Burry - The Big Short

  1. #1

    Default Michael Burry - The Big Short

    The Big Short’s Michael Burry says he has found the next market bubble

    Passive investments are inflating stock and bond prices in a similar way that collateralized debt obligations did for subprime mortgages more than 10 years ago, Burry told Bloomberg News.

    “Like most bubbles, the longer it goes on, the worse the crash will be,” said Burry.

    “The theater keeps getting more crowded, but the exit door is the same as it always was. All this gets worse as you get into even less liquid equity and bond markets globally,” he said.
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  3. #2

    Join Date
    Sep 2006
    Upstate NY
    Blog Entries

    Default Re: Michael Burry - The Big Short

    RE: passive indexing; I can say first hand that one reason I piled money into the market in late March was due to the amount of alleged buy and holders panicking and selling on a popular forum. Buy and hold is easy money when markets are going up, but once they go down, it's a different story. I also find it hard to believe anyone is truly buy and hold and hasn't messed with their accounts from time to time. People often will tell you the time they were right, but will never admit the times they were wrong.

    Options trading is a bigger worry than pension funds choosing indexing over active management.

    Government-directed shutdowns in the U.S., which led to millions of job losses and may trigger one of the country’s deepest-ever economic contractions, aren’t necessary to contain the epidemic and have disproportionately hurt low-income families and minorities, Burry argued.

    Burry has so far refrained from tweeting about his investments. He told Bloomberg News last month that he placed a “significant bearish market bet that is working out for now,” without providing details except to say it was a trade of a “good size” against indexes. He said the pandemic could unwind the passive investment boom, which he has compared to purchases of collateralized debt obligations that fueled the pre-2008 mortgage bubble.


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