Investing Thread

[MU82]

Michael Burry's Scion Asset Management has taken bearish positions in AI darlings Nvidia (NVDA) and Palantir (PLTR), a regulatory filing showed, as the famed investor hinted caution toward the artificial intelligence trade that has boosted a lot of this year's market rally. Burry is best known for his prescient bet against the U.S. housing market ahead of the 2008 financial crisis.

https://seekingalpha.com/news/4514017-michael-burrys-big-short-instincts-target-ai-trade-with-puts-on-nvidia-palantir

[JWags85]

Michael Burry's Scion Asset Management has taken bearish positions in AI darlings Nvidia (NVDA) and Palantir (PLTR), a regulatory filing showed, as the famed investor hinted caution toward the artificial intelligence trade that has boosted a lot of this year's market rally. Burry is best known for his prescient bet against the U.S. housing market ahead of the 2008 financial crisis.

https://seekingalpha.com/news/4514017-michael-burrys-big-short-instincts-target-ai-trade-with-puts-on-nvidia-palantir

Will be interesting.  Post-2008, he's been good on non-US equities (crushed the China rebound) but pretty spotty on domestic names. And he's been bearish on semiconductors for like 2+ years now.  Suppose he's bound to right eventually

[Hards Alumni]

Will be interesting.  Post-2008, he's been good on non-US equities (crushed the China rebound) but pretty spotty on domestic names. And he's been bearish on semiconductors for like 2+ years now.  Suppose he's bound to right eventually

He's just a doomer that people take too seriously.  His record is very spotty since the big short.

[Uncle Rico]

He's just a doomer that people take too seriously.  His record is very spotty since the big short.

Indeed.  He did move the needle this week, though.  Palantir doth protest too much, methinks

[JWags85]

He's just a doomer that people take too seriously.  His record is very spotty since the big short.

He was notably right in a big and bold way on one of the most impactful contrarian trades in history.  And since then, he didn't blow up or completely fall apart as an investor, thus he still gets attention and press when he gets on the other (usually bearish) sides of popular sentiment.  I agree he's been mixed at best, like I mentioned, especially in specific stock picking, but I get why he's still a voice that gets note.

But ironically, I think the only reason he's still getting press is cause he hit that China trade pretty big, as a non-doomer bull.  Otherwise between his Tesla misses, bailing early on GameStop, etc...  he'd have lost PR credibility.  The only other big guy I can remember with him on the China rebound, and vocal about it, was Tepper...who as bad as he is as an NFL owner, still f***ing rips as a hedge fund manager.

[Pakuni]

Oh, great, they found another way to transfer wealth from the middle class to the rich, and from the young to the old, and create a class of lifetime debtors.

https://www.housingwire.com/articles/trump-proposes-50-year-mortgage-to-help-affordability/

[Skatastrophy]

Oh, great, they found another way to transfer wealth from the middle class to the rich, and from the young to the old, and create a class of lifetime debtors.

https://www.housingwire.com/articles/trump-proposes-50-year-mortgage-to-help-affordability/

This will lower the monthly payment by 10% vs a 30 year, assuming that both 30 and 50 year has the same rate. And they won't have the same rate.

This is a worthless idea that will cost a lot of money for the government and private industry to implement. 

[Uncle Rico]

This will lower the monthly payment by 10% vs a 30 year, assuming that both 30 and 50 year has the same rate. And they won't have the same rate.

This is a worthless idea that will cost a lot of money for the government and private industry to implement.

Done deal, then! 

[forgetful]

I'm far from an investment guru, or even particularly knowledgeable about a lot of the financial details, but was thinking the below and wondering Scoopers thoughts.

Today, ~93% of all stock/securities are held by the wealthiest 10% (with over 50% held by the top 1%). These are people that largely don't need that money and have no where else to put it.

Further, they have nowhere else to put their new wealth that is generated. Does this make the stock market less sensitive to market instabilities, as there is no viable alternative for storing wealth, and an essentially guaranteed flow of new cash/investments.

Note: I'm largely referring to long term crashes with when I refer to sensitivity to market instabilities. There could likely be higher sensitivity to short-term market instabilities, and large fluxes in individual stocks due to changes in sentiment amongst the "active" traders who actually represent a smaller part of the overall market due to a lower float.

[Jockey]

Oh, great, they found another way to transfer wealth from the middle class to the rich, and from the young to the old, and create a class of lifetime debtors.

https://www.housingwire.com/articles/trump-proposes-50-year-mortgage-to-help-affordability/

Simply a way to make even more money for his banker donors.

Corruption is so obvious, but still never ends.

[MU82]

I'm far from an investment guru, or even particularly knowledgeable about a lot of the financial details, but was thinking the below and wondering Scoopers thoughts.

Today, ~93% of all stock/securities are held by the wealthiest 10% (with over 50% held by the top 1%). These are people that largely don't need that money and have no where else to put it.

Further, they have nowhere else to put their new wealth that is generated. Does this make the stock market less sensitive to market instabilities, as there is no viable alternative for storing wealth, and an essentially guaranteed flow of new cash/investments.

It's an interesting question.

The wealth imbalance is little to no different from when there were big selloffs in 2022, 2018 or even the Great Recession, so I'm tempted to say no. But there's no way to really know what the depths of the next crash will be until it happens. And it will happen, so we'll get to find out.

[Shaka Shart]

Interesting

https://www.wsj.com/finance/investing/charles-schwab-joins-wall-streets-push-into-private-assets-with-forge-global-deal-4b7e2f86?gaa_at=eafs&gaa_n=AWEtsqfD_Q0uogqI1lO9JV-EQ8ZmLYZr98uF4z6gmRtcRf22g6tpPeXwKQbmegssvg%3D%3D&gaa_ts=6913863e&gaa_sig=OFa5hQ8txCXr2NT9SU-p5HS7Qvp-q02C6j753ui-yyH1l3pEF3smUynEnI1PIJqDWk9yKZuuvPC6Sh6Az_adTw%3D%3D

[MU82]

Interesting

https://www.wsj.com/finance/investing/charles-schwab-joins-wall-streets-push-into-private-assets-with-forge-global-deal-4b7e2f86?gaa_at=eafs&gaa_n=AWEtsqfD_Q0uogqI1lO9JV-EQ8ZmLYZr98uF4z6gmRtcRf22g6tpPeXwKQbmegssvg%3D%3D&gaa_ts=6913863e&gaa_sig=OFa5hQ8txCXr2NT9SU-p5HS7Qvp-q02C6j753ui-yyH1l3pEF3smUynEnI1PIJqDWk9yKZuuvPC6Sh6Az_adTw%3D%3D

I'll let others have fun with that.

[forgetful]

Interesting

https://www.wsj.com/finance/investing/charles-schwab-joins-wall-streets-push-into-private-assets-with-forge-global-deal-4b7e2f86?gaa_at=eafs&gaa_n=AWEtsqfD_Q0uogqI1lO9JV-EQ8ZmLYZr98uF4z6gmRtcRf22g6tpPeXwKQbmegssvg%3D%3D&gaa_ts=6913863e&gaa_sig=OFa5hQ8txCXr2NT9SU-p5HS7Qvp-q02C6j753ui-yyH1l3pEF3smUynEnI1PIJqDWk9yKZuuvPC6Sh6Az_adTw%3D%3D

Well that is one way to provide an out from my scenario above, where the market is stabilized from major long-term negative swings due to so much of the market being held by the 10%.

If they would pull major amounts of funds out of the traditional market to place it in these alternatives, it could lead to a major market crash.

[Shaka Shart]

Well that is one way to provide an out from my scenario above, where the market is stabilized from major long-term negative swings due to so much of the market being held by the 10%.

If they would pull major amounts of funds out of the traditional market to place it in these alternatives, it could lead to a major market crash.

I think institutional investing in private companies is fine, as long as we require these companies to publicly announce their earnings quarterly so people can have good information on which to make sound investment decisions

[jesmu84]

I think institutional investing in private companies is fine, as long as we require these companies to publicly announce their earnings quarterly so people can have good information on which to make sound investment decisions

Since when do things like quarterly earnings demonstrate value?

[JWags85]

I think institutional investing in private companies is fine, as long as we require these companies to publicly announce their earnings quarterly so people can have good information on which to make sound investment decisions

[Hards Alumni]

I'm far from an investment guru, or even particularly knowledgeable about a lot of the financial details, but was thinking the below and wondering Scoopers thoughts.

Today, ~93% of all stock/securities are held by the wealthiest 10% (with over 50% held by the top 1%). These are people that largely don't need that money and have no where else to put it.

Further, they have nowhere else to put their new wealth that is generated. Does this make the stock market less sensitive to market instabilities, as there is no viable alternative for storing wealth, and an essentially guaranteed flow of new cash/investments.

Note: I'm largely referring to long term crashes with when I refer to sensitivity to market instabilities. There could likely be higher sensitivity to short-term market instabilities, and large fluxes in individual stocks due to changes in sentiment amongst the "active" traders who actually represent a smaller part of the overall market due to a lower float.

Yes.  It's why it is a terrible indicator of economic health.

[Hards Alumni]

Well that is one way to provide an out from my scenario above, where the market is stabilized from major long-term negative swings due to so much of the market being held by the 10%.

If they would pull major amounts of funds out of the traditional market to place it in these alternatives, it could lead to a major market crash.

Much of the market is buoyed by retirement funds.  People can't just pull cash out of their investments willy nilly without being penalized.  Sure, some funds move money around, but a predictable amount is converted to cash daily, and many of the pull backs from one company necessitate the investment of those funds into another company.  Additionally, a predictable amount of money enters the market every day (or month, whatever) so as long as more people are placing money into the market rather than taking it out (for retirement, mainly) the market is fairly immune to a true crash.

As forgetful mentioned, the rich don't have anywhere else to stash their money.  Sure, some do real estate, art, or other stuff, but the majority of it is tied up in the market or bonds... for good reason.

[Shaka Shart]

Wow seems like maybe we shouldn't listen to Larry Summers' judgement on the economy

[MU82]

Bitcoin has fallen under $90K.

It's down 5% so far this year.

[Hards Alumni]

"AI is going to massively impact the global financial markets!"

*monkey's paw curls*

[MU Fan in Connecticut]

I meant to share this a few weeks ago.  It's more an interesting comment from my cousin's husband.  He's a research scientist and retired quite some time ago.  He got called back to head the Leukemia & Lymphoma Society and retired again just a few years ago.  He can't stay retired is consulting start-up companies now.  He said it's part time.  He said it is a really bad time for science and research more so because right after COVID all these investors dumped and threw money into a lot of pharmaceutical and science research and a high percentage of these projects never should have received a nickel.  Investors feel burned and with the current uncertainty aren't easily willing to fund research startups.

[JWags85]

I meant to share this a few weeks ago.  It's more an interesting comment from my cousin's husband.  He's a research scientist and retired quite some time ago.  He got called back to head the Leukemia & Lymphoma Society and retired again just a few years ago.  He can't stay retired is consulting start-up companies now.  He said it's part time.  He said it is a really bad time for science and research more so because right after COVID all these investors dumped and threw money into a lot of pharmaceutical and science research and a high percentage of these projects never should have received a nickel.  Investors feel burned and with the current uncertainty aren't easily willing to fund research startups.

Ive actually heard something similar.  I have a friend at a successful PE firm that had a robust biotech/pharma/medical science focus on a few of their funds and he said there was there was almost an overly altruistic attitude towards the sector and research focus on the heels of COVID.  Said he knew a former partner who ended up having a falling out with other partners cause he was leaning towards throwing money at "noble causes and cures" that might not have otherwise withstood proper scrutiny.  But that isn't working with investor pocketbooks anymore.

Also said if you're in the medical research/biotech space and you're tossing around AI without a rock solid algorithm and methodology for why the AI isn't just proprietary/innovative, but also vitally useful, you're getting skunked.