Just listened to a podcast where Michael Burry did an interview with Michael Lewis:
I have to say, after listening to this I’m a little infatuated with M.D. Michael Burry. I love this guy.
Very grounded.
But to get back to your quote: financial media seems to have misreported the short position and they probably misinterpreted Burry’s 13-F filing (skip to minute 14 for learning about the details). His short position (according to him) is 10 million dollars …[$]
I haven’t fact checked this myself (apparently the 13-F reporting for options is messed up), but I can totally see how a headline like “Michael Burry (of The Big Short) has a billion short position on Palantir and Nvidia” will generate more clicks than “Well, looks like Michael Burry bet $10M on Palantir and Nvidia going down over the next two years”.
$ For those interested in the details:
Palantir is trading at $200.
Burry buys 50’000 Puts on Palantir expiring in two years at strike $50. He thinks they’re going to $30.
Since each option contract is for 100 shares, the press reports this as a $200 x 50’000 x 100 = $1B short bet.
In reality, the bet cost Burry 50’000 x $2 x 100 = $10M.
Well, there clearly is room for improvement here. I asked the free version of chatgpt questions around private enterprise valuation for tax purposes (Kreisschreiben 28 for the geekier amongst us) and it kept hallucinating about what it says, coming up with quotes that I welcomed as they would have supported what I wanted (to lower my tax bill😉) - except they were nowhere to be found in the actual document, or interpretations. When confronted, first it kept making excuses about having paraphrased, only when pushed admitting it made things up (‚thank you for keeping a sharp eye‘)…
Burry is absolutely right when he says bitcoin is worthless. And that people don’t get what they’re buying. People may be stupid.
But this is the point. Markets and the world is driven by human beings. Mostly less intelligent than this beautiful mind burry is. If they feel something stupid is right, then you have your bitcoin at 1M.
I feel, sniffing out bullshit coming from the LLM is a skill like Google-fu. One pattern I saw in current ChatGPT is that it throws a lot of tangentially related information at you if it can’t find an answer. Then it is a good time to call it out and force it to base interpretation on verbatim quotes from sources.
The LLMs (and ChatGPT in particular) are just so much quicker to find you relevant sources and the relevant part in the sources. You just need to guide it the right way.
“The largest cumulative losses before young/start-up companies turned a profit compared with cash burn for OpenAI and Anthropic based on media reports”
This is the thing, we are not talking about the ‘long term’ we are talking about the next 10 years. That might not be the same thing as ‘long term’ for some people.
As for what could be better, or at least to diversify, I’ve been putting my money into gold/precious metals, and related mining companies. Recently also oil companies (but I think it is really too early for oil).
Edit: 10 years is pretty long term even for academic purposes, I was unmarried and had no kids 10 years ago, in 10 years my kids will be adults. Plus we’ve gone over the “keeping investing pulls you out of the hole in 1/2-1/4 of the time from ATH to ATH” practically every single day!
Edit 2: But what about Japan? Then diversification in geographies and asset classes is the answer (as you know super well)!
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