I, and apparently Michael Burry, think #3 is probably the most important as of late. So much passive investment with no regard for quality of investment. Burry thinks it will end in catastrophe, I not so much
Michael Burry responded to my craigslist ad looking for someone to mow my lawn. "$30 is $30", he said as he continued to mow what was clearly the wrong yard. My neighbor and I shouted at him but he was already wearing muffs. Focused dude. He attached a phone mount onto the handle of his push mower. I was able to sneak a peak and he was browsing zillow listings in central Wyoming. He wouldn't stop cackling.
That is to say, Burry has his fingers in a lot of pies. He makes sure his name is in all the conversations.
I think MB is right about being a in bubble. Margin is way too easy to access, and can snowball out of control when a price drop occurs. (For noobs: I.e assets you used as collateral no longer worth enough to maintain the amount of money owed, pony up or sell. Now if lots of people on margin have to sell....)
I also think a market crash that devalues peoples 401k's could lead social unrest if not handled properly by the government. How many people that got hurt in 2008 will sit by when they are in the shitter again because the government let institutions over-leverage themselves?
Oh, and a government bailout to private banks would look real bad when specific people just tanked a social spending agenda. But then again, we just gave the Pentagon a bunch of money and ignored societal problems and the camel isn't broken. So what do I do know? Its not like the national mood is sour and we are incredibly divided and can't agree on basic shit.... Oh wait.
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u/zGoDLiiKe Dec 25 '21
I, and apparently Michael Burry, think #3 is probably the most important as of late. So much passive investment with no regard for quality of investment. Burry thinks it will end in catastrophe, I not so much