The Biggest Short
The hate towards short sellers seems to be at an all-time high right now. Ever since the GameStop fiasco that led to a retail revolution, traders have been hungry to find short sellers to squeeze financially, and literally if they had the ability to. However, we need to respect short sellers who have made big splashes in the market by timing their trades right before an economic crash. We have George Soros, who shorted the British pound before its collapse, we have Bill Ackman, who shorted the market before the COVID-19 stock market crash, and we have Michael Burry, the man who short sold the housing market before it crashed, a decision that was adapted into a movie dubbed “The Big Short”.
Back in May, we covered Michael Burry’s backstory and his new big short at that time, which was a bet on Tesla. Guess what? Burry made some more moves today, and they could be even crazier than the Tesla short. To begin with, Burry increased his short position on Tesla with the purchase of 300,000 put options, with the same investment thesis in place. However, the crazy part is his new bet against Cathie Wood’s ARK Invest. ARK has been one of the most famous ETFs in 2020 due to Wood’s risky, high growth investing style. The idea of anyone shorting it seems unreal, but if anyone has the guts, it’s Burry. He shorted 235,500 shares of put options against the flagship ETF, saying that the company is overvalued and the disruptive growth they talk about hasn’t been realized yet. If Burry is right on these two investments, he is set to shock everyone while making a lot of money. What do you think about this Burry bet?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.