Charlie and Jamie had always sort of assumed that there was some grown-up in charge of the financial system whom they had never met; now, they saw there was not.
-Michael Lewis, The Big Short: Inside the Doomsday Machine
I've often seen this in traders who get outrageously successful with a particular strategy at a particular point in time. Their brain overfits seeing that pattern at times when it really doesn't apply. The smart ones manage to get out before losing everything, the not so smart ones end up where they were before the success. It is like a lottery winner who 'reinvests' all his winnings back into lotteries.
He's done this before. He had a good run form 2000-2009 but then had a bad run and liquidated his fund to manage his own money.
he restarted a fund in 2013 and managed a relatively small amount of money(200M) and has had mixed results. He announced last month he's liquidating his fund but also left a teaser that he'll make an announcement on Nov 25th.
I think the one big lesson I've personally taken from him for money management is the saying that "right but early is still wrong". He was right in 2008 but nearly lost regardless.
Now he's made big bets on water, the ai boom ending and the age of free money for companies from the government ending, Palantir as a company wouldn't exist without copious amounts of government money, Thiel's bet on cozying up to Trump really paid off here..
He may be right on all 3 but he was early and therefor from an investing standpoint he was wrong.
With him and the rest of the old guard of short funds (Chanos, Kynikos and Hindenburg) all closing up shop it also proves the old adage that you can't fight the fed and when they pump out so much free money like they did from 2008 till now that its very hard to be short as even terrible companies can limp along forever.
I'll be watching closely to see what he does with his next act.
It’s extremely damning of the state of this country that all of these short sellers have closed up shop. As Coffeezilla says, “crime is legal now”. You can’t use logic and reason to short a company when with a few million dollars that company can make some donations and their problems go away.
The market has shifted drastically since he made his big break in 2008 and he doesn't seem to be able to adapt to it, which to be honest very few do regardless. That being said I think it's highly unlikely this is the last we hear of him. He does seem to have an eye for spotting things way ahead of the curve but that's both a blessing and a curse when trying to trade on shorter time scales.
> The market has shifted drastically since he made his big break in 2008 and he doesn't seem to be able to adapt to it
The market currently lives in some kind of post-rational reality where NVidia is worse more than the GDP of Germany, indices are dominated by a few interlinked companies using creative accounting and multiples are through the roof. Meanwhile, the government is openly trying to influence the central bank and probably fudge key statistics.
Find me someone who is really adapting to this market and not actually winging it hoping the plane doesn't crash.
Charlie and Jamie had always sort of assumed that there was some grown-up in charge of the financial system whom they had never met; now, they saw there was not. -Michael Lewis, The Big Short: Inside the Doomsday Machine
I've often seen this in traders who get outrageously successful with a particular strategy at a particular point in time. Their brain overfits seeing that pattern at times when it really doesn't apply. The smart ones manage to get out before losing everything, the not so smart ones end up where they were before the success. It is like a lottery winner who 'reinvests' all his winnings back into lotteries.
The default assumption in capitalism is luck+opportunity.
Beyond the sociopathy required to horde wealth, most of the market is now turtles all the way down when it comes to strategy.
This also explains why the grift economy makes more sense: once you realize it's all luck, it's better to corrupt it's outcomes.
THis is mostly a non event.
He's done this before. He had a good run form 2000-2009 but then had a bad run and liquidated his fund to manage his own money.
he restarted a fund in 2013 and managed a relatively small amount of money(200M) and has had mixed results. He announced last month he's liquidating his fund but also left a teaser that he'll make an announcement on Nov 25th.
I think the one big lesson I've personally taken from him for money management is the saying that "right but early is still wrong". He was right in 2008 but nearly lost regardless.
Now he's made big bets on water, the ai boom ending and the age of free money for companies from the government ending, Palantir as a company wouldn't exist without copious amounts of government money, Thiel's bet on cozying up to Trump really paid off here..
He may be right on all 3 but he was early and therefor from an investing standpoint he was wrong.
With him and the rest of the old guard of short funds (Chanos, Kynikos and Hindenburg) all closing up shop it also proves the old adage that you can't fight the fed and when they pump out so much free money like they did from 2008 till now that its very hard to be short as even terrible companies can limp along forever.
I'll be watching closely to see what he does with his next act.
It’s extremely damning of the state of this country that all of these short sellers have closed up shop. As Coffeezilla says, “crime is legal now”. You can’t use logic and reason to short a company when with a few million dollars that company can make some donations and their problems go away.
Donate newly minted money, fresh from the virtual presses, too.
The market has shifted drastically since he made his big break in 2008 and he doesn't seem to be able to adapt to it, which to be honest very few do regardless. That being said I think it's highly unlikely this is the last we hear of him. He does seem to have an eye for spotting things way ahead of the curve but that's both a blessing and a curse when trying to trade on shorter time scales.
> The market has shifted drastically since he made his big break in 2008 and he doesn't seem to be able to adapt to it
The market currently lives in some kind of post-rational reality where NVidia is worse more than the GDP of Germany, indices are dominated by a few interlinked companies using creative accounting and multiples are through the roof. Meanwhile, the government is openly trying to influence the central bank and probably fudge key statistics.
Find me someone who is really adapting to this market and not actually winging it hoping the plane doesn't crash.
You left off my caveat "which to be honest very few do regardless" but point taken.
Investors got angry that he bet against nvidia?