Michael Burry’s Pretty Big Short Hinges on Treasuries

[FD1000]

www.bloomberg.com/news/articles/2021-08-21/michael-burry-s-pretty-big-short-hinges-on-treasuries-sinking

Michael Burry, whose huge, wildly profitable bets against the housing bubble were made famous in “The Big Short,” is wagering that long-term U.S. Treasuries will fall.

His Scion Asset Management held $280 million of puts on the iShares 20+ Year Treasury Bond ETF at the end of June, according to a regulatory filing released this week, an increase from $172 million three months earlier.

The options contracts would make money if TLT, as the exchange-traded fund is known, falls as Treasury yields go up -- something that hasn’t happened lately as fear of the delta variant drives investors into Treasuries.

[Chahta]

Another rising interest forecast? Yes I know they will someday. The good news is the fed will tell us when it is time.

[galeno]

I've been disliking bonds and crying about them since 2006. I dislike them even more now.

Conservative investors, like ourselves, have become speculators.

Last time I checked USD CPI YTD CAGR = 5.4%.

The 12 month yield on our UCITS TWBM ETF (AGGG) = 1.3%. Duration = 7.4 years.

50% of our port is in FI with a REAL 12 mo yield of NEGATIVE 4.1%. It's NAV will acurely decrease by 7.4% with every 1% increase in short term interest rates.

If this isn't SPECULATION (greater fool theory) I don't know what is.

[Chahta]

galeno, couldn't you reconfigure your equities to a higher % or maybe buy an dividend ETF? Possibly buy a multi-sector bond fund? Hopefully inflation will decrease later this year. Too conservative sometimes comes back to hurt you.

[galeno]

There is so much BS and crazy propaganda flying around these days that we don't know what's up or down anymore.

So we KISS & STC. In times of trouble it's easier to "drive" an evenly balanced 2 fund "haystack" port vs a tilted "sliced and diced" one made of multiple funds loaded with financial shenanigans.

Aug 22, 2021 16:58:16 GMT Chahta said:

galeno, couldn't you reconfigure your equities to a higher % or maybe buy an dividend ETF? Possibly buy a multi-sector bond fund? Hopefully inflation will decrease later this year. Too conservative sometimes comes back to hurt you.