by John Walters

MH will be taking a summer break tomorrow—perhaps longer—so here’s a little lagniappe on top of today’s edition. To tide you over. We’ll be back… when we’re back.

Three things we know about megamillionaire hedge-fund manager Michael Burry, who was profiled in Michael Lewis’ fantastic book, The Big Short:

  1. He’s the smartest guy in the room.
  2. He’s the wealthiest guy in the room.
  3. He is a fearless and unapologetic iconoclast.

More than a decade ago, Burry made himself (and his few remaining clients) hundreds of millions of dollars by seeing through the charade of the housing market and CDOs, etc. He shorted mortgages when housing prices had only been increasing for six consecutive decades. Rule No. 1: Gravity always wins.

Last week, under his Twitter name of @cassandra (a reference to the Greek goddess who issued dire warnings that no one heeded b/c who wants to hear bad news?), Burry sent out the following tweet:

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble Of All Time In All Things. By two orders of magnitude. #FlyingPigs360”

The tweet has since been deleted but the message lingers.

It’s frothy out there and you have to wonder, Will we be looking back and wondering how come more of us didn’t listen to Burry sooner? The first time we had an excuse. None of us knew he existed. Now we do.

Check out just a few stocks or currencies that are discussed daily on CNBC:

Tesla (TSLA): Up more than 300% in the past year, and it had already risen about 300% in the year prior to that.

Greyscale Bitcoin Trust (GBTC): Up more than 200% in the past year, and again, it had been lower than that.

AMC Cinemas (AMC): Up more than 1,000% in the past year.

We’re not here to tell you what to do, if you’re in the market.

But here we sit in what will be the fourth consecutive 115-plus degree day in Phoenix, something we never experienced more than one day a summer (side note: it’s still spring) growing up here in the late 70s and early 80s. The point: people warned us about climate change for decades but everyone was too busy getting a killer tan to care. Now, people care. Particularly since it’s been about 10 months since the Valley’s last solid rain storm. No lie.

Why didn’t we listen? is a common refrain among failed civilizations. Or investors. We’re listening to Burry. Do what suits you best.

6 thoughts on “THE BIGGER SHORT?

  1. WAIT, WAIT, WAIT! The VERY DAY I return from my own, er, “sabatical”, you announce YOU are going on a break! No! Will you be back in time for the Olympics?!

    And why did you sell any NVDA? It’s having a 4 for 1 split just next month! If the entire market isn’t cratering by then (possible), it will continue to go “up, up & away”! (I’ve been working out to several CD packs the last several months – Best of the 60s, 70s, & 80s, 5-7 discs each & about 140-150 songs each so I’ve got “classic tunes” running through my head these days).

    And yes, I’ve been planning to sell/move yet another 5% of my 4 largest 401-k funds but you wanna know the only thing where I’m DOWN since January? The damn bond funds I put some of that cash in! And of course, that will only get worse as interest rates rise. So, where are we supposed to park our cash? The money market funds pay a BUCK on $100k! Hmpfh!

    Anyhoo, thrilled that you’ve made some money on the biggest con of our time (other than the orange-haired wanna-be dictator/NAZI). Better you than some of the hedge fund a-holes. Charlie Munger & I are in complete agreement on this crap. And the G-7 SHOULD have spent some of its time declaring the usage of crytocurency for goods & services in their countries as illegal. They will REGRET not doing so.

    And ahem, I told you during RIO & for the past 5 years that Simone is the GOAT of gymnastics! 🙂 In fact, she makes Jordan look like a slacker! Michael Phelps is her only comparison; and while he dominated his sport for twice as many years, she is performing skills not thought POSSIBLE just a few years ago.

  2. Dammit – whose free blog am I going to read just to find typos? Just kidding – I read your stuff for much more than that. Have a fun time, wherever you’re going/whatever you’re doing.

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