Should you panic because of famous investor Michael Burry's short positions
Michael Burry ( of the Big Short fame) who shot to prominence with his bearish bet against US Sub prime in 2008 has taken a bet against US banks and stocks with a large put option holding ( 1.6 US billion in bet) - This has led to a lot of panic in US markets
Should you follow suit - Well lets take a quick look at some of his recent trades
He bet against Tesla ( shorted) but then unwound very quick
He had bought Game Stop before the company had a major short squeeze
He has been very vocal about Gold, US Farmland and also holding cash
Some of his largest holdings are Private Prison stocks in the US ;)
So should u panic - don't think so - BECAUSE
We don't know when he is going to unwind his short position ( it could be very quick and you as an investor not get time to react
He is human and just because he has got 2008 right doesn't mean he will get it right again - I have rarely seen many fund managers get calls right all the time ( especially in the short term) , however a legend they might be. Also we dont know much about whats the context of his bet ( little knowledge can be dangerous)
We should stick to the game that we are good at ( which is predicting long term cycles and sticking to it) -
You should believe that we aren't in a bubble territory
The next few years economies globally would be in a better shape that it is now
4. However yes these times are important to just realise and not get carried away in the market euphoria
5. When markets are expecting a correction, they rarely come
So 'stick to your game' ( asset allocation), exit investments you wouldn't hold for the long term and answer the questions in point 3 above for holding on
https://edition.cnn.com/2023/08/15/investing/michael-burry-stock-market-crash/index.html
#michaelburry #thebigshort #usmarket #marketcommentary #nasdaq100
GoalTeller Pankaj Fitkariwala