The Big Short Movie ( a true story )
Will prices fall, Just because everyone believes it, doesn’t make it so Michael Bury (Played by Christian Bale ) is laughed at several times in the movie when he suggests that the USA house prices could crash let alone fall. That single fact gave him more conviction that he was right.
Michael Bury (Played by Christian Bale ) is laughed at several times, in the movie when he suggests that the USA #house prices could crash, let alone fall. That single fact gave him more conviction that he was right.
Markets reach extremes when everyone has the same belief and market bubbles end when there are no more buyers left. Always be cautious about consensus- held views because they often mark turning points, not only in markets but in other parts of life too ( fashion, Music, hair colour etc )
The most #successful investors, designers and musicians have usually been contrarian and acted counter to the commonly – held view.
But as you’ll see, timing of when to bet against the crowd is crucial…
The market can stay irrational longer than you can keep your job
The film demonstrated this investment adage perfectly. Regardless of how certain you are about an investment, the market can be wrong for longer than you can hold your position.
In the film both Bury (Bale) and Baum (Carell) are almost forced to exit the trades that eventually made them billions because those trades initially lost them money.
Between 2005 and 2007, Bury lost tens of millions and was fortunate he was able to ‘put the gates up’ on his fund so investors couldn’t leave.
Markets can be irrational for longer than you may expect so it’s important no single holding is too large a part of your portfolio and ensure you can meet any short-term cash-flow needs in the meantime.That’s why we recommend, that all clients who have debt keep 6 months worth of expenses in savings in cash or
That’s why we recommend, that all clients who have debt keep 6 months worth of expenses in savings in cash or short term deposits. ( if you get tempted to spend it )
It’s also why advise clients to discuss with their financial planners regarding leverage or margin loans on their share portfolios with our strategies because that increases the risk of being forced to exit a good long-term portfolio if markets are irrational over shorter periods and you can’t put-up the required margin.
To discuss if your current strategy and mortgage repayments currently are definitely the best for the next 5 years please call Madhu 0425341086 or send an email to firstname.lastname@example.org