Investors Who Cashed in on the Financial Collapse (collection, capitalism, real estate)

[HDL]

I found this article today and thought I'd share it here :

AlterNet: Michael Lewis Takes Us Face to Face with the Investors Who Cashed in on the Financial Collapse (http://www.alternet.org/module/printversion/146056 - broken link)

Here's a brief snippet from the article:

In The Big Short: Inside the Doomsday Machine, Michael Lewis adds to his impressive collection of beautifully written books with a fascinating tale about professional investors who foresaw the financial debacle - and profited from it. In presenting a quirky array of smart, self-serving characters, Lewis intends to help fans of his storytelling understand what went wrong with American capitalism in the early 21st century.

The stars of The Big Short, whom Lewis describes with meticulous detail, definitely see beyond the curve and around the bend. Contrarians, they bet against the real estate market and the very companies that the U.S. government so expensively bailed out in 2008 and 2009. They even wonder aloud about whether the pillars of American finance committed crimes as well as technical errors and moral outrages by peddling financial instruments -- designed to "hide the risk by complicating it," Lewis smartly says -- that seem destined, sooner or later, to fail miserably.

All I can say is "I TOTALLY AGREE" with what is written in the article !

[Jaggy001]

I cashed in .... but not by foresight. Rather, when the markets hit the low in February & March, I had enough cash to come back in and make some real money. My judgement was that the markets had panicked, that prices had gone too low and that they would come back in time. Good companies like SanDisk and Hartford Financial services were ridiculously undervalued compared to their book value. It was the finest opportunity for value investing I have ever seen and I made the most of it.

[FarNorthDallas]

He was on 60 Minutes the other night. Very interesting! They also had the Aspergers guy on there - Dr. Michael Burry on there. He apparently is in the book.

[floridasandy]

i think this is a very astute observation:

Talented individuals pursue narrow self-interest and collectively create forces that unleash a whirlwind of trouble for total strangers.

of course, i would add "through fraudulent methods" in the middle for a lot of them.

this country will NEVER be alright until the fraud is dealt with.

[Randomdude]

Originally Posted by Jaggy001

I cashed in .... but not by foresight. Rather, when the markets hit the low in February & March, I had enough cash to come back in and make some real money. My judgement was that the markets had panicked, that prices had gone too low and that they would come back in time. Good companies like SanDisk and Hartford Financial services were ridiculously undervalued compared to their book value. It was the finest opportunity for value investing I have ever seen and I made the most of it.

You actually could have quadrupled your money investing in C or BAC. I had no money to put in to the market at the time, but I would tell anyone who would listen to snap up C and BAC in January and February last year. Now C is sitting at 4.10 and was .97 in March 09, and has been a volume leader nearly every day.

[treasurekidd]

I'm with Jaggy - I bought C, BAC and GE in the first half of last year and made a lot of money. (I'm still holding BAC, because I really think that they're going to keep getting better.) I wish I had had more cash to jump in with, as vastly undervalued companies were EVERYWHERE at the time. As Warren Buffett says, "When it's raining gold, looks for buckets, not thimbles."

[formercalifornian]

Michael Burry is brilliant! Amazing that he had such foresight and positioned himself to take advantage, although I don't think he was the only person to sense something was not right in the early 2000's. 60 minutes did a nice feature story about this topic last week, and there's an hour-long interview on NPR with Lewis. Worth checking out.

[Sasquatches]

The real question is what do you do now folks?

[HDL]

Just curious since the responses DON'T reflect as such !

Originally Posted by Sasquatches

The real question is what do you do now folks?

[formercalifornian]

Excuse me? I referred to Michael Burry, a hedge fund manager who is profiled in The Big Short, and then I referred to two other stories about Lewis in the media. I think that reflects at least a modicum of knowledge about the topic you introduced. Where exactly did you want the conversation to go?