[HN Gopher] Michael Burry warning of the biggest market bubble i...
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Michael Burry warning of the biggest market bubble in history
Author : paulpauper
Score : 39 points
Date : 2021-06-16 17:44 UTC (5 hours ago)
(HTM) web link (markets.businessinsider.com)
(TXT) w3m dump (markets.businessinsider.com)
| mywittyname wrote:
| This article is really light on details.
|
| What is in The Greatest Speculative Bubble of all time?
| Everything? Crypto? Stocks? Just Telsa stocks? All tech stocks?
|
| Then there's the other half of the equation, which is, "what can
| I do about it?" The answer to that question is what's actually
| important. Anyone can make accurate predictions, but it the
| decisions you make with those predictions that count.
|
| If everything is in a bubble, then what does it matter? If crypto
| is in a bubble and you don't own crypto, then what does it
| matter? Same with Tesla.
|
| The dude is probably right, but over what time frame remains to
| be seen. Frankly, I'm more worried in general over normal
| economic issues than I am about any speculative asset bubbles:
|
| The USA is "returning to normal" while a pandemic is still
| _raging_.
|
| There's a massive supply shortage across all sectors of the
| economy that politicians are blaming on a boogyman (unemployment
| insurance) instead of actually investigating or addressing the
| problem.
|
| The country still hasn't addressed the riot that happened in its
| capitol where a mob attempted to murder politicians (and
| successfully injured/murdered officers protecting them).
|
| There's a drought and record heat wave hammering half of the
| country, putting them at risk of more deadly wildfires.
|
| Plus dozens of other things I've either forgotten about, or are
| not widely reported enough for me to be aware of.
|
| So yeah, the likelihood of Bad Shit happening in the next year is
| pretty high. But I'm not worried about Tesla and crypto at all.
| fairity wrote:
| > If everything is in a bubble, then what does it matter? If
| crypto is in a bubble and you don't own crypto, then what does
| it matter? Same with Tesla.
|
| It matters because you can: 1) divest from said assets classes
| or 2) short said asset classes. It also matters because there
| are downstream consequences of a broad market crash, from which
| you can protect yourself (if you choose to believe this
| prediction).
|
| > Frankly, I'm more worried in general over normal economic
| issues than I am about any speculative asset bubbles
|
| There's nothing stopping you from worrying about inflated asset
| prices along with your long list of other unrelated concerns.
|
| I agree that the article is light on details, but I fail to
| understand the rest of your point if there is one.
| edmundsauto wrote:
| You can divest, and do what with the money? Real estate is
| the best I've come up with, but even real estate prices are
| bananas.
| ipspam wrote:
| Your skepticism is well founded given the lack of details. I on
| the other hand, instantly had the opposite reaction when I
| first read the claim earlier today.
|
| It stirred up memories of recent speculative manias like sports
| cards, D&D cards, Pogs, etc selling for ridiculous sums of
| money. 11 month wait times for grading of cards.
|
| Yeezyzs and sneakers are now bonafide asset classes to many
| people?
|
| Housing prices in my country were supposed to be stable or
| maybe even set for a correction and they are up 20-30-40% in
| different places.
|
| Used Cars are not really in the speculative, but the prices
| behind them have led to Runs on certain new cars. I recently
| had an acquaintance of mine purchase a brand new Rav4 hybrid at
| an "insiders" price from a friend at a dealership, with the
| sole purpose of flipping it for a couple thousand dollars
| profit when he finally took possession.
|
| These are just anecdotes, but it certainly seems like everyone
| is vying to participate in the get rich quick economy.
| real-dino wrote:
| I've gone all in on GME. It's old news, but there is
| something there.
|
| When I try to explain it, I end up looking like the crazy
| conspiracy meme guy.
| lotsofpulp wrote:
| > Yeezyzs and sneakers are now bonafide asset classes to many
| people?
|
| No? That kind of stuff makes for good headlines to get
| clicks, but is there any data showing it is anything but
| clickbait?
| jfim wrote:
| There are actually specialized websites to trade them. For
| example you can see a price chart and 52 week high/low for
| some sneakers: https://stockx.com/nike-air-force-1-low-
| white-07
| thedudeabides5 wrote:
| In fact there's a startup marketplace doing just that and
| apparently has a couple billion in GMV
|
| https://qz.com/1994596/stockx-a-sneaker-resale-site-is-
| now-w....
| mckirk wrote:
| I certainly see the value in those anecdotes. When I realized
| how much my Steam inventory was suddenly worth, because old
| CSGO items were rising in value for no apparent reason, that
| was my personal 'oh crap, this is exactly what an everything-
| bubble would look like' moment.
| someguydave wrote:
| Perhaps when every numerator you can find is wildly increasing
| the real problem is that your denominator is shrinking.
| ksaj wrote:
| I read once that if you're on a ship and notice the lighthouse
| is rising, you are are going down.
|
| Similar concept.
| super_seomis wrote:
| What does that mean?
| [deleted]
| totony wrote:
| I think he's suggesting inflation (money is losing value)
| vmception wrote:
| This article doesn't say anything
|
| No insight on why this is the top now, compared to 6 months ago,
| or 12 months ago
|
| No insight into flows of capital, any monetary policy
| shmageggy wrote:
| Yeah, I would like to see some analysis of why he thinks so.
| Having no financial knowledge I tend to agree based solely on
| the social phenomena surrounding these things, but it would be
| nice to see the reasoning and numbers from someone who actually
| knows something.
| T-A wrote:
| https://www.hussmanfunds.com/comment/mc210614/
| andrewmcwatters wrote:
| It's interesting to watch Tesla's valuation as a slow motion
| train wreck. Their earnings are steadily growing and the
| valuation of the company is slowly dropping, so maybe we'll
| eventually see on a longer timeline the price of the security
| approach fair value. As of writing its a bit above $150 a share
| based on free cash flow analysis.
| bob33212 wrote:
| Growth Stocks are not priced based on current profits, but
| future growth and profits. When I bought GOOG in 2005, the
| consensus was that GOOG was overpriced because they didn't have
| a lot of revenue. When I bought TSLA in 2014 the consensus was
| that another automaker would beat them or buy them before they
| were very profitable. In 2024 when TSLA is at $1500 and people
| are saying that it is overpriced because it only makes 5
| million cars a year, I'll still be explaining this same
| principal.
| andrewmcwatters wrote:
| Maybe you missed it, that's fair value at _future_ cash flows
| at about an 8% discount rate.
| bob33212 wrote:
| What margins and volumes on the Y, CyberTruck, and Model A,
| FSD subscriptions are you using in that calculation for
| 2025?
| paulpauper wrote:
| People have been calling it a train wreck since it went public
| in 2010, at just a tiny fraction of its current price. Tesla
| has long exhibited a tendency of suddenly surging and defying
| the doubters, over and over.
| anunnymouse wrote:
| Yes that's right. The halting problem does not actually exist
| in the financial world.
| rvbissell wrote:
| I estimate 99% probability of sarcasm.
| mywittyname wrote:
| Telsa is running out of ways to keep their stock going. Musk
| used some market manipulation to squeeze shorts, which
| propped up their stock price. Then there was the inclusion in
| the S&P500, which opened up the floodgates from retail
| investors who are forced to throw a portion of their
| retirement at Tesla. That helped for a while. Now it looks
| like they are trading/manipulating crypto prices in an effort
| to keep their stock price going.
|
| Telsa has absolutely defied the doubters. But I think they've
| reached the end of their bag of tricks. This crypto stuff
| might float them for another year or two, but eventually, the
| market is going to demand real revenue proportional to the
| value of the stock. When that happens, the fall is going to
| be epic. I wouldn't be surprised if stock plunge -> removal
| from S&P500 -> delisting -> private buyout at 1/1,000 of
| current price happens in the span of two months.
| aeternum wrote:
| If the EV market continues to grow by 173% YoY and Tesla
| continues to lead sales, then it's unlikely the market will
| demand real revenue for quite awhile. Investors are quite
| happy with companies that can maintain that kind of growth.
|
| https://insideevs.com/news/504647/global-plugin-sales-
| march-...
| andrewmcwatters wrote:
| This is just lazy handwaving. There have been entire years
| where Tesla was below fair value. Now it's not, and
| dramatically so.
|
| The price itself has nothing to do with it.
| spywaregorilla wrote:
| > It's interesting to watch Tesla's valuation as a slow motion
| train wreck. Their earnings are steadily growing and the
| valuation of the company is slowly dropping,
|
| Tesla is up 200% over the past year
| htk wrote:
| The US brings trillions from the future and injects into the
| economy, of course GDP is going up.
|
| I don't see a bubble per se, what I fear we might face is the
| consequence of projections based on the speed of a machine, where
| the machine is red hot and can't keep it up for too long.
| djohnston wrote:
| What do I put my money in?
|
| Crypto is having a fever dream. Real estate is ballooning. Index
| funds are at an all time high and the fed is printing money like
| Gutenberg reincarnate. What do I do?!
| [deleted]
| _ink_ wrote:
| NUSI ETF
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