A must read WSJ article

I'm betting Paulson (trader/hedge fund manager in article) will have mediocre-to-poor results the rest of this career. Seems like it happens to most who make a really big call ('87 crash, long tech bubble or short tech burst, etc.).

The success usually goes to their head and they keep trying (and failing) to predict the next big thing afterwards.
 
The funny thing I used to be an employee of Ameriquest Mortgage and realized after someone with a 500 fico could get a refinance on "stated" income that things where out of control. I told everyone I knew the industry was in trouble but did I do anything? Of course not. No shorts of any kind. I regret it everyday! It is the only "inside" information I will ever have more than likely.
 
One problem, though, is that timing shorts before a bubble bursts is very hard. Like the tech bubble, many were talking about a housing collapse for 2 or 3 years before it happened. I'm sure some tried to short, and got shaken out as their losses built up and housing continued to explode.

Still, I know what you mean. I know someone who owned a siginficant amount of gold before Y2K, and I finally advised them to sell it a year later as gold kept going down...

Quote from Rickd23:

The funny thing I used to be an employee of Ameriquest Mortgage and realized after someone with a 500 fico could get a refinance on "stated" income that things where out of control. I told everyone I knew the industry was in trouble but did I do anything? Of course not. No shorts of any kind. I regret it everyday! It is the only "inside" information I will ever have more than likely.
More...
 
Quote from Daal:

how much would he lost had the good times extended for a year, thats what I want to know. this guy could easly be a survivorship bias sample being praised as genius
More...

Article states just that. He just happened to get involved at the right time. Plenty of others who bet the same, just too early.

Anyone looking at ET years ago knows that many upon many have long realized that the subprime game was just waiting to crack.
 
Timing is everything.

Picked up particularly on the point made by Peter Soros about how most pros would have cut loss on the trade.

The smarter you are, the more likely you are to be stopped out by fools before the move - especially when shorting. You also risk being the lonely genius - especially with value no one else can see, so nobody else bids up your osition.

The public makes more on paper than pros in bull markets because they hold on/double up on every dip - including the last one which they ride all the way back down to their entry.
 
This must be the smartest man that ever lived.

I'm in awe.


I mean how could you recognize a bubble when all you could see were bag ladies, tenement trash, and trailer park hobos, getting 500k morts.

This guy must have been psychic.
 
Quote from Hydroblunt:

Article states just that. He just happened to get involved at the right time. Plenty of others who bet the same, just too early.

Anyone looking at ET years ago knows that many upon many have long realized that the subprime game was just waiting to crack.
More...
that's why it pays to read ET, same can be said way back when ET warned about internet bubble.
 
Quote from MKTrader:

One problem, though, is that timing shorts before a bubble bursts is very hard. Like the tech bubble, many were talking about a housing collapse for 2 or 3 years before it happened. I'm sure some tried to short, and got shaken out as their losses built up and housing continued to explode.

Still, I know what you mean. I know someone who owned a siginficant amount of gold before Y2K, and I finally advised them to sell it a year later as gold kept going down...
More...
Agreed. Remember the Nikkei at stratopheric levels in the late 80s early 90s? Some would point to gold in the late 70s early 80s as another example.

I know a team that bought put options on the Nikkei and rolled them over, for years, before they payed off huge. That's discipline.

nitro
 
I felt the most important part of the article was the line

"What bubble can we short?"

It seems that the new economy from the dot com days isn't as "over" as we thought.

It seems as if the new economy is a boom bust cycle of a single leading sector, as opposed to the whole market in general. giving us smaller busts by creating new bubles in other sectors.

lol.
 
You must log in or register to reply here.
Back
Top