Kevin O’Leary Warns Michael Burry on His “Big Short” Bet
“Shark Tank” star Kevin O’Leary has warned against the bet made by Michael Burry against the S&P 500 citing that it might be very painful. Precisely, he stated that the bet might be painful for “Big Short” investors in the interim. The reasons behind his prediction are the fact that the index is diversified and shorting stocks is highly risky.
You get lucky once, Kevin O’Leary Says
Speaking on Wednesday in an interview with Fox News where he tried to highlight the challenges bordering on predicting market movements, O’Leary said “People that try to live off market timing have a very hard time. You get lucky once as he did with housing syndication in mortgage debt, but this is a whole different kettle of fish he’s playing with.”
“To say that I know when the market is going down – he will be right one day, when is unknown. And how much pain he will have to take along the way, and does he have enough dry powder, as they like to say, at the margin desk? Because every time that market goes up another 1-2%, that phone is ringing and they’re saying ‘send in some more cash,” he added.
The “Shark Tank” star’s comment came right after Burry explained that he had bagged bearish options on two Exchange Traded Funds (ETFs) that follow the S&P 500 and Nasdaq 100 last quarter. The notional value of his investment against the two benchmark indexes amounted to $1.6 billion. O’Leary acknowledged the bet as a brave move, referring to the wide range of stocks and sectors included in the bet.
Burry’s fame came with the subprime mortgage crisis bet
O’Leary recalled a certain time when Burry made a bet on the subprime mortgage crisis and made a personal profit of about $100 million. While he recorded profits, O’Leary clarified that the success at the time was quite different as the betting conditions were also different. At the time, Burry was tracking a single sector which is not the case presently.
This time around, the S&P 500 has 500 mega-cap companies from 11 sectors including real estate. This also applies to Nasdaq 100, hence, all involved companies will have to go down at the same time for the bet to be won, per O’Leary’s statement.
- October Fed Rate Cut Odds Rise After Weak U.S. Labor Data, Bitcoin Surges
- Hashdex Adds Cardano to Crypto Index Fund as ADA Gains SEC Listing Eligibility
- U.S. Treasury To Ease Tax Rule on Unrealized Bitcoin Gains, Aiding Saylor’s Strategy
- Trump-Backed World Liberty (WLFI) Plans RWA Tokenization Paired with USD1 Stablecoin
- Stripe Eyes U.S. Banking Charter, Pioneers One-Click Stablecoin Issuance for Firms
- Shiba Inu Price to Surge as Whales Buy and Team Commits to Shibarium Growth
- XRP Price Prediction After Ripple CTO David Schwartz Resigns
- SUI Price Eyes $4.5 as Coinbase Futures Listing Sparks Market Optimism
- Chainlink Price Holds $20 Support Amid Tokenization With DTA Standard Progress – Is $47 Next?
- Analyst Predicts Dogecoin Price Surge as DOGE ETF AUM Hits $20M
- Ethereum Price Eyes $8,600 As Institutions And Whales Double Down
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
