has bet over $1 billion that the share prices of AI chipmaker Nvidia and software company Palantir will fall
not a very tough bet to make tbh.
very misleading title and literally no commenters could even read the first paragraph here lol. Man the AI hate is truly reaching the looms now
are… you making that bet?
Nope can’t be bothered with any gambling - life’s too nice for crap like this.
What does his height have to do with anything? Are we body shaming?
deleted by creator
Huh. I understood that as “big player in shorting world”
You understood that part correctly, but misunderstood the joke
It’s a movie title ‘the big short’ which tells the story about the housing market bubble crash
Nvidia down ~8% this week, Palantir down ~10%
Maybe the needle really is shifting.
Maybe, but he’s also been super wrong a bunch of times on his skitzo twitter account so grains of salt and all that. Not saying the guy isn’t smart, clearly called one of the biggest systemic crisis of our times, but he struck gold once and struck out a bunch more often.
Because it’s more likely that he got lucky once and his short position was strong enough that he could keep paying the premiums than it is that he is some super genius who knew something noone else knew
Now I most definitely don’t want it to pop 🤣 moreso because the reality is the bubble popping doesn’t hurt them it only hurts all the idiots who spent their meager earnings on this shit.
The rich never suffer, other than having to buy the smaller yacht.
Yay, yet another once in a lifetime financial crisis.
Can’t wait.
This is in a category I’d like to call hopebait. People so badly wish things they feel are bad simply stopped themselves, that they’ll upvote anything that appears to confirm this.
In this instance, there is nothing of substance in this article to suggest the end of anything is anywhere near in sight.
One guy, who makes bets constantly, made another bet.
Seriously the stock market can remain irrational longer than you can stay solvent.
People are idiots.
Is there a consensus there’s an AI bubble? Sure?
Can anyone predict what will happen? LOfuckingL
My plan is to stay invested until dividends hit in December, and then I’m going to evaluate moving my investments into a money market or bonds. Amazon’s numbers show that consumers are still buying, and my assumption is that consumer spending will hold off the pop for now.
I 100% expect a massive crash, and when it’s just seven companies propping up an entire economy, the pop is going to be very bad. I’d rather lose a little value in the short term than have my portfolio drop to a calamitous degree and have to wait 5-10 years for it to recover.
*not a FA, just my personal plan
Mid-Cap index funds should be fairly insulated from the damage as well, given they would exclude companies as large as nVidia.
Either way, biggest thing people is when the bubble pops, that is the time to buy in more, not the time to sell. The buy high-sell low strategy is easy to fall into emotionally.
that is the time to buy in more, not the time to sell.
1000000%
That’s the other side of my strategy, having my portfolio in cash means I can reinvest at the new fire sale prices.
I was able to pay off my student loans by buying oil stock at a 90% discount in March 2020 and then waiting a few years for the rebound. You don’t even need to be rich to do it, just patient.
I stopped putting money into us equities and started to put them in purely international index funds. I havent sold anything though.
Yeah, this economy has given me the heebie-jeebies for the last quarter now.
Unless you’re a billionaire or on a signal chat in Washington, I don’t know how you can feel good about what’s happening.
You think the US economy going totally tits up won’t take the rest of the world with it to some degree?
I know, but i figure my lossrs will be more controlled and my recovery smoother
I wish I could convince SO to do this with our funds but they will just say im a doomsdayer
Oof, yeah. Having to make group decisions with money is tough.
Partly why I love being single and childless.
The good news is. Even if you don’t change your strategy, you can just chill on index funds. When the bubble pops, they will go down, just keep buying more. In the long term, you will still make money. US index funds earn ~8% per year on average when invested for long periods of time.
Yeah, agreed. Just buy monthly a fixed amount of money in index funds. When it goes down, some people will double it.
I made the mistake of selling when covid hit and the market went down. I started buying again when the market was doing OK again. So I made two mistakes: sold low, bought high.
I’m waiting for my sweet 200 in tax returns and rolling it into scratch tickets.
May the odds be ever in your favor.
If he needs a straight pin to pop it I can send him a couple
deleted by creator
This is a long term investment, predicting that the bubble will burst _at some point _. It doesn’t signify that he believes the collapse to be imminent. The market can remain irrational longer than you can remain solvent!
Seems like more of a bet specifically on Palantir, unless there are a bunch of other smaller bets they didn’t bother to mention.
of all the AI, thiel kept palintir, and his other LOTR-themed Ai companies very secretive. since mossad/IDF, and ukraine uses it, i bet it gives faulty/false positive targeting?
But as you said those are all secretive contracts. How would anyone know that kind of thing to bet against without some insider info?
Burry similarly made a long-term $1 billion bet from 2005 onwards against the US mortgage market, anticipating its collapse. His fund rose a whopping 489 percent when the market did subsequently fall apart in 2008.
We may have to wait for another three years.
I looked into the article to find out how long a timeframe he is betting. Unfortunately, it does not say.
How the hell did he do a long term bet against the market? Aren’t shorts short-term and they’re forced to pay after a set period of time? Even the inverse indexes will steadily make your money simply vanish.
I never got into options investing, but I believe you keep re-upping them. Every time you do so you pay a small price. So, the game is: ‘can you stay liquid long enough for the bubble to pop’.
The longest term seems to be about 2 years.
You can keep a short position for a long time, as long as you can maintain margin, which gets bigger if the stock price continues increasing, and pay margin interest - there is no set date when the short has to he closed, it’s indefinite. Sometimes the lender who loaned you the stock can ask for it back, and if you can’t locate any more shares to borrow to replace the returned shares, you might be forced to buy the shares back and close the short, but this is not common, at least during normal market conditions.
His company bought puts. They are less risky, because you don’t need to maintain margin. What you pay to buy them is all you can lose.
We may have to wait for another three years.
Which is also a clue that he isn’t short selling.
There are two ways of making money when a stock goes down. One is to sell the stock short. The other is to buy a put option.
A short sale is extremely risky. Say the shares are at $50 and you think they’re going to go down, so you sell 1000 shares you don’t own (short selling) and agree to buy them back by some date in the future. If you’re right and the stock tanks to $20, you can buy the shares and pocket $30,000. But, if the stock doesn’t sink, you might have to buy the shares for $60 each, so you lose $10 per stock, or $10,000. If there are tons of people shorting the stock, you can get a short squeeze, where everybody needs to buy shares to close out their short position, and because everybody needs to buy, the stock price rockets up, so you get people having to buy a stock that used to be $50 for $200, leading to $150,000 in losses for a 1000 share short where the maximum possible gain was only $50,000.
An option is much safer. There you’re buying the option to sell the shares at a certain price at some time in the future. Say you think a stock is going to crash. It’s currently trading at $50/share. You can buy 1000 put options at a strike price of $40 with a date 1 month in the future. It will cost you something to buy those options, say $1 per share, so $1000. If the stock goes up or stays at $50, your bet didn’t work out. You don’t have to sell the shares, you just tear up the options contract. You’re out whatever you paid for the option, say $1000 here. But, say the stock tanks and it’s now at $20/share. Now your bet did pay off. You can buy 1000 shares at $20 each for $20,000, then immediately exercise your option and sell them for $40,000, netting you $20,000. With put options the upside is significantly smaller, but the potential downside is tiny. It’s just the cost of the options.
Someone predicting a crash within 3 years isn’t going to short sell the shares. Between now and then the shares could continue to rise for a while, and they’d be on the hook for a huge payout in that case. If they buy options the down side is much smaller. They may have to re-buy new options a bunch of times. But in the worst case they just have to let the options expire unused and eat whatever cost they paid for them.
For the coming AI crash, I don’t think it will be very soon. I think there will be a crash. But, I think the government will try to keep the bubble from bursting. Too much of the US economy is now invested in AI. So, even under Biden, or Harris, or Obama they’d try to prevent a catastrophic crash by using taxpayer money to prevent the most damaging bubble burst. With Trump, there’s going to be even more government interference in the market. His backers are crypto bros. They’re the ones making him billions on his meme coins. They bankrolled JD Vance’s political career. If they demand that he rescues their failing companies, he’ll do it. And, since the GOP does whatever Trump wants, they’ll just fork over literal trillions in taxpayer dollars to keep things from crashing. But, eventually there will have to be a crash, because there’s just not a sustainable business model in any of this, at least not at anything like the current scale.
You’d think the timing should reflect the typical terms of loans and loan volumes - so that sounds plausible. When the default rate of those loans begins to creep up and become notable to investors, then people will get edgy.
I just hope it comes before our much loved and overpaid layers of incompetent management have destroyed all their manual production processes and replaced them with snake oil. If not a general economic downturn might start well before the ai bubble bursts.
A short is not only a bet on a direction but also a timing issue. You need to know roughly how long (time) to keep the option.
It is interesting that stocks began going down though. Whether it continues, we should see.
Its not a question of “if” but “when.”
and whether he has enough liquidity to maintain his margin during absolutely insane market distortions by hedge funds, big banks, and the government.
And when it pops it will be a big bang in the entire global economy from what i heared and read.
I mean, the housing bubble burst and the government pulled 7 trillion out of its arse and handed it back to bankers, doubling the cost of current living from the knock-on inflation. Life went on, and not a single banker (except maybe some lackey in Iceland) was punished. The Rich got exceedingly wealthy after the crisis.
This time: the government will pull 50 trillion from its arse and hand it back to investors. Life will go on, no one will be punished, the cost of living will be a few times higher than what it is now, and the rich will get richer.
My interpretation: the big investors fully expect the bubble to burst and hope to win from the fallout/bailout. It’s win-win for them.
True
Any. If it happened under Obama, it will most certainly happen under Trump
Thats quite the US centered perspective
I’m from the UK/Germany. The dollar is a worldwide currency with far reaching impact
Germany had the same financial crisis around that time with a 70 Mrd € bailout as I’m sure you remember
I was wondering about the source for this figure. For the curious, it comes from a private report from an independent consulting firm in the UK called MacroStrategy Partnership. I found this article talking about it, dated 2025-10-3.
Which would explain why the Fed is dumping trillions of dollars into banks right now.
