The people constantly predicting Tesla failure and shorting the stock lost all of their money. This guy won’t matter.
You’d think people would learn to change their mind and update when massive economic incentives exist to do so, but often they don’t. Confirmation bias is a powerful thing.
"The market can remain irrational longer then you can remain solvent" is a saying for a reason.
[1] https://en.wikipedia.org/wiki/Michael_Burry#cite_note-Burry-...
There was a crash in 1999, but the underlying economic shift created by the internet was real and major companies survived it.
I suspect something similar is likely here.
You’re right of course and Michael Burry made a great trade recognizing the CDO issue and bad incentives around reselling mortgages leading to banks giving mortgages to people that couldn’t afford them and not taking the risk directly.
It was also time bounded (he knew when the rates would change and they’d start to fail).
That said, people often use the “market can remain irrational longer than you can remain solvent” line as an excuse - basically to say they’re right about an “impending crash” on an infinite timeline. If you can’t predict it within a bounded timeframe than your prediction is useless and ultimately equivalent to predicting nothing.
In the case of the OP he was clearly wrong, and instead of updating is spinning it as he was kinda right anyway. I think that’s dumb.
I mean sure...put your money where your mouth is on that one, but I'm not buying TSLA at $1096 per share.
The stock price today may be a bubble, I don’t know. But Burry’s comments were before the current run up.
Which is the point: the market can (generally) remain irrational longer then you can remain solvent. Even when you're right.
For example, the bias you are talking about means that the open minded and more virtuous people will adopt bitcoin earlier, and those who profit from the existing exploitive system much later.
This produces a massive wealth transfer from evil to good.