The trouble with calling market bubbles
The durable edge is not in trying to make a better prediction, it is in following a better process
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MICHAEL Burry, the contrarian investor Christian Bale played in The Big Short, earned his reputation by seeing what almost no one else could – that the “safe” label stamped on mortgage-backed securities in 2007 bore no relation to the rotting loans beneath them.
He was right, spectacularly so, and the call became the stuff of financial legend and a movie.
He has also, in the years since, wrongly predicted at least two recessions that never arrived. This raises an uncomfortable question. Was the first call genius, or was it just lucky timing?
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