Back in August, I wrote this article on how the year 2015 sent investors INSANE (ps. what do you think of the new site? Not 100% done yet but this is the foundation we want to get Brits investing better).
And…
I’d like to say I am now vindicated.
Pretty much everything I outlined in that article is why Burry has shut his fund to outside capital and is now returning investor funds.
The market has changed, and Burry’s views, as he put it himself, do not align with how this market behaves.
Because the one large factor that is different now to 2007/8 is the passive complex.
Everyone is just long the SP500 and for very good reason.
US firms return money to shareholders at an insane rate, and US big tech dominates the global landscape.
If I can get you understanding this one fact, then my job is done.
From there, of course you can use methods to juice your returns, but as I say in the Academy’s first section, brainwashing you to think in this way is the absolute most pivotal mindset shift to getting better investing outcomes.
And Burry shutting his fund proves this.
Of course, this doesn’t mean we won’t get downturns.
We know this from the interest rate shift in 2022.
But what it does mean is there is going to be a permanent bid in the market which will make downturns much less severe, with a faster pace of recovery.
And remember…
We are individual investors.
We DO NOT have the same mandates as funds, who wish to generate market neutral alpha and or alpha from shot selling.
We want to be long beta (read this article I wrote for the FT) with strong risk management.
It’s not easy, but it is simple.