Will The Big Short Be Wrong?

Michael Burry, of The Big Short fame, is shuttering his fund, Scion Capital.

In his letter to shareholders, he wrote: “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”

It looks as though Mr. Burry is a victim of the famous quote from economist John Maynard Keynes:

“The market can stay irrational longer than you can stay solvent.”

Ironically (or NOT) short sellers are generally more objectively right than most investors.

And here’s a few examples:

• The shorts called Enron a fraudwhen investment banks were telling people to buy it
• They blew the whistle on Madoffbefore he collapsed
• And they warned repeatedly about 2008 on national televisionbefore the entire global economy nearly collapsed

Burry made a fortune in 2008 and became famous for having the guts to stick with his convictions when it looked like everyone was against him. *

(* The Big Short, movie is a must watch)  

But now that Burry is calling it quits, does that mean the markets will keep up their lofty positions…especially in the AI and Tech Sector?

Au Contraire!

Back in 2005, Burry was early by about two years when he was shorting housing using CDS.

But even though he ultimately got the trade right, the carry trade on the CDS crushed him.

The Big Short 2.0

Maybe he’s early again and just doesn’t want to wait this one out.

Or Maybe he realized that betting against the FED is a losing proposition.

Or Maybe, JUST MAYBE, Burry is likely seeing the road ahead getting rough.   And he realizes he will be more nimble on his own.

And like most money managers, he doesn’t want the responsibility of handling other people’s money when the SHTF this go around. 

BTW, according to Scion Capital’s recent 13-F filing, the two biggest short positions were in Palantir (PLTR) and Nvidia (NVDA).

Whether he’s right or wrong remains to be seen.

However, Buffet went to cash over a year ago, and Burry bailing is a sign of a top in the markets.

And let’s not forget that most of the market mania has everything to do with our Federal government flooding the “system” with money.

Because the recipients of that money must do something with it, hence DOW 48,000, and BTC 100,000+.

So, where should you put your money now?

Find out in our upcoming November newsletter (HERE).

Share this with a friend…even if they didn’t see The Big Short movie.  They’ll thank YOU later.

And tell them:

We’re Not Just About Finance

But we use finance to give you hope.

“And you shall know the truth, and the truth shall make you free.”

~John 8:32~