| | | Burry makes massively leveraged (and usually losing) bets against the market. One of these days he will break even.
That said, I am very much tempted to short the market. The main problem is that valuations alone are not a good argument for shorting the market.
The bearish argument is this: The breadth is terrible and the success stories are concentrated in AI and select commodities. The real economy, especially restaurants, retail stores, fast food chains, auto parts, etc, are all getting crushed. Furthermore, the government spending is down and the shutdown is having an impact.
The argument for being bullish is that interest rates are falling and SPX companies have been beating the EPS estimates in record numbers (and amounts). This is a great backdrop for a bull market. Furthermore, when the shutdown ends, which eventually it must, you will have a massive rally that will kill you if you are short.
So if I were to short, I would not short the market at large (may be I'd short RTY). I would focus on poorly doing sectors and those that are overextended and now falling (e.g. utilities or gold). Now if I see PLTR, NVDA , SNOW, and the AI leaders getting ready to fall, then yes, I will short them. But I won't fight the tape on them. |
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