this post was submitted on 06 Nov 2025
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We may have to wait for another three years.
I looked into the article to find out how long a timeframe he is betting. Unfortunately, it does not say.
You'd think the timing should reflect the typical terms of loans and loan volumes - so that sounds plausible. When the default rate of those loans begins to creep up and become notable to investors, then people will get edgy.
I just hope it comes before our much loved and overpaid layers of incompetent management have destroyed all their manual production processes and replaced them with snake oil. If not a general economic downturn might start well before the ai bubble bursts.
How the hell did he do a long term bet against the market? Aren't shorts short-term and they're forced to pay after a set period of time? Even the inverse indexes will steadily make your money simply vanish.
I never got into options investing, but I believe you keep re-upping them. Every time you do so you pay a small price. So, the game is: 'can you stay liquid long enough for the bubble to pop'.
You can keep a short position for a long time, as long as you can maintain margin, which gets bigger if the stock price continues increasing, and pay margin interest - there is no set date when the short has to he closed, it's indefinite. Sometimes the lender who loaned you the stock can ask for it back, and if you can't locate any more shares to borrow to replace the returned shares, you might be forced to buy the shares back and close the short, but this is not common, at least during normal market conditions.
His company bought puts. They are less risky, because you don't need to maintain margin. What you pay to buy them is all you can lose.
The longest term seems to be about 2 years.
A short is not only a bet on a direction but also a timing issue. You need to know roughly how long (time) to keep the option.
It is interesting that stocks began going down though. Whether it continues, we should see.