Chapter 181 – The Big Short
There are things you realize when you invest.
Isn’t it necessary to buy stocks?
“I knew the great truth.”
“It seems like a fact that everyone knows.”
Sora comes running, shaking her chest.
It’s so resilient that if it gets hit in the face, it’s like your teeth will fly off.
‘There was a cartoon like that.’
He beats his face like a punching bag with a breast.
At the end, missiles fly from the top.
“In a down market, you don’t buy stocks, you buy shorts.”
“How about it? A good strategy, right?”
“It’s as if your IQ has reached three digits.”
He is proud with the expression that he has realized the reason of all things.
In fact, if it’s natural, it’s a natural story.
‘Because a short is also an investment strategy.’
In Korea, it is quite limited.
This is because individual investors are preventing short selling and short betting.
Individual investors can also hit a Tesla 3x short if they want to.
“You mean inverse?”
“Whoops, I’m thinking of buying a gobbus.”
Inverse and docverse are possible.
Inverse is an ETF that tracks the KOSPI in reverse, and Daqverse is an ETF that tracks the KOSDAQ in reverse.
‘And the multiplier is twice as large as the inverse.’
If the index goes down by 1%, you get a 2% return.
You can call it a so-called leveraged ETF.
“How did you come up with that idea?”
“I think there must be something.”
“I saw the movie The Big Short!”
It was a common reason.
I ended up watching one of the top three movies investors should never see.
‘The Big Short, The Wolf of Wall Street, Margin Call.’
It’s better to see the operation 3 times.
I have no use for those three.
“I’m going to get rich short too!”
“An investor who will change the times has been born.”
“You have to dream big.”
It only creates useless prejudices.
In particular, the ‘Big Short’ has significant side effects.
‘I fall into the illusion that I have become a wise investor.’
Everyone loses money.
Instead, it makes a profit by investing in the opposite direction.
Making money when everyone else is losing money brings great pleasure.
It’s comparable to drugs.
“Did you watch the Big Short to the end?”
“Of course it is.”
“Then you know what the big short ending is?”
“How do you know people as fools?”
“No, the real ending.”
Movie The Big Short.
It is a stock movie made against the backdrop of the 2008 subprime mortgage crisis.
The main characters predicted the situation and saw profits.
Betting on the decline will make you a lot of money.
‘That’s a movie based on reality.’
An event that actually happened.
The characters in the film are also based on real people.
I.E. Living humans.
Even after the movie ends, their story continues.
“How… How did it happen?”
“As an investor, I mean.”
One of the main characters of The Big Short.
The real life person of Mark Baum is Steve Iceman.
‘Because I can’t give a dog a bad habit.’
Hits a massive short seller on Tesla.
However, the stock price unexpectedly rose sharply.
The fund under management is liquidated.
In effect, he retires from his job and becomes an old man in the back room.
Light a cigar
Even the most famous investor can go down in an instant.
‘Well, I’m not in a position to tell others.’
It’s normal everyday in the industry.
Still, it’s something that’s hard to get used to.
“Oh, I told you not to smoke!”
“Do you cover it with your mouth?”
“You can’t do that here.”
One cigarette is bound to make you thirsty.
So-ra whines like a wife worried about her husband’s health.
‘Well, you’re not in a position to tell others either.’
If you are short investing.
Reverse investing is riskier than you might imagine.
“What’s so dangerous? If you don’t want to, you can stop losing.”
“Have you ever tried drugs?”
“Have you tried it?”
“Eh, I didn’t even try cocaine in case it wasn’t a view.”
Shots are compared to drugs.
This is because once you benefit from a shot, you may become addicted to it.
‘Please don’t eat ramen. As the saying goes, the constitution changes.’
Short investors really change their constitution.
Every situation feels like a precursor to a collapse.
“Did you see me cracking a joke with you?”
“You’re kidding me, and you’re just trying to fuck me.”
This time it’s sincere.
Why is mentality important in investing?
Once you hit the shot, you realize it.
‘People are never rational creatures.’
It’s not just beginner investors who make mistakes.
Even the most brilliant investor is bound to commit.
No, that’s why
I’m the one who predicted the subprime mortgage in the past and sat on the money cushion~.
“Hipster temperament to make a different choice from others is holding yourself back.”
“Like a senior?”
“In the end, investors forget the basic fact that they believe in the upward trend of the stock market.”
“I’m not listening.”
The words of historically famous short investors, such as Jesse Livermore and Chang Chang, are usually bad.
To the extent that Steve Iceman, who was liquidated, is a nobleman.
‘Maintaining a rational mind is one of the virtues that an investor should have.’
This is why you should not recklessly place short bets even if a decline is expected.
Until the values are established as an investor.
“Michael Burry is still famous.”
“Michael Subury the son of a bitch.”
Only those who have established values should do it.
For Sora, who had just developed hind legs, it was a long way off.
‘He barely made it after being driven to the brink of mental breakdown.’
I sold my car, I sold my house, I sold everything I could sell.
The Big Short miraculously came out at the end of two years.
A movie is a movie.
In real life, Michael Burry never made easy money.
I understand the seriousness of it now.
It is a cute misunderstanding of viewers of the first episode of The Big Short.
“Uh… You can still go down, right?”
“Then take a shot.”
“I mean, there’s an uproar over the inverted interest rate between Korea and the U.S. If this continues, won’t the dollar skyrocket like the IMF crisis?”
It’s a time that every investor goes through at least once.
It’s like puberty.
‘It’s time to broaden my horizons.’
A global mindset is required.
You should also know that the world never goes around easily.
It’s a long time ago, so I’m giving a lecture.
The attention of the club members is focused on the whiteboard of the stock club.
“Isn’t it buzzing in the news right now? The benchmark interest rates in Korea and the US have reversed.”
“Isn’t it a big deal?”
“Why do you think it’s a big deal?”
“Because there is no reason to put money in Korea from the point of view of a foreigner…”
My dignity has returned.
It was because he clearly won the confrontation with Rachel.
That the exchange rate does not move easily like a virgin’s delusion.
‘Theoretically, it seems to go down infinitely.’
Give me more money?
America is the most trusted country in the world.
The central bank of the United States guarantees high interest rates.
I think it would be right to take the money out of Korea and move it to the US.
“Currently, the US CPI is 2.4% and the base rate is 1.75%. And in Korea, the CPI is 1.3% and the base rate is 1.5%. In other words, if you calculate the real interest rate, Korea is higher than the US.”
“What is the real interest rate?”
“The base rate minus the CPI.”
Currency is the most conservative asset in the world.
I don’t shake my butt that easily.
‘Korea is also a country with a current account surplus.’
Dollars keep coming in.
Since there is a lot of money, it is possible to defend the exchange rate in case of emergency.
If they attack for nothing, they may suffer losses due to the government’s intervention in the foreign exchange market.
“Doesn’t Ohsung Electronics make money well apart from the decline? Capital outflows cannot easily happen in such a stable economy.”
“Then why is it over 1100 won now?”
“The exchange rate skyrocketed.”
“Because interest rate forecasts have changed.”
Of course, this is a macro estimate.
In the short-term flow, speculative phenomena may occur.
‘Because the forecast for Korea’s CPI next month is 1.6%.’
The real interest rate gap has narrowed.
The external soundness of emerging markets is also gradually faltering.
Just as the 1994 financial crisis in Mexico spread throughout South America, problems in Asia may spread to Korea as well.
“The IMF was also triggered by the crisis in Thailand.
“Can you speak like Rachel unnie?”
So many things need to be considered.
On the surface, it’s not just one, two or three.
‘There are even more hidden things.’
What you said to rachel
This is an in-depth process.
I knew everything, so I skipped it and proceeded.
But the kids in the stock club are newbies.
It’s not something to be carelessly touched without knowing the basics.
“Until you can calculate how much these basic things are reflected in the market in advance and how many are hidden, you can’t predict the exchange rate carelessly.”
“Then can I hit the shot?”
“Is it a short frenzy here too?”
“I watched our big short!”
Basics as an investor.
The shot is what you do when your hands start to itch even after you know everything.
‘When you come to the gambling house, you play blackjack, baccarat, roulette, big wheel, taisai, Caribbean Stud Poker, Casino War, and Texas Hold’em, and discuss the next steps.’
It is a law that a kid who has barely played a slot machine should not risk his hands.
“I’m benefiting from that inverse.”
“I’m a gobbus!”
“I want to bet that Korea will failhaha.”
Predicting the downside of the stock market and hitting a short are completely different concepts.
You don’t know that.
‘It wouldn’t be bad to experience it when I have nothing to lose anyway.’
It’s better than being 23 years old and having no experience like any other woman.
You might want to try a shot as well.
“Have you guys heard of this? Long is calculation, short hitting is psychology.”
“I think I know what you mean.”
“Because value investing requires analysis…”
“Yes. Do you think you understand? Then what is a short?”
How could Michael Bury in the movie be so sure in a situation where his house was taken over, his car was taken over, investors demanded refunds, and even his subordinates said he was wrong.
‘It’s an unbreakable heart.’
Short is a belief.