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welcome everyone we have a lot to get to in this episode i'm sure that you've heard by now that michael bury the famed big short investor it's been revealed that he has long puts on tesla a lot of them he's betting heavily against tesla now michael bury does not take out short positions against a company unless he believes that stock price is going down he doesn't take short positions as part of a hedging strategy he does it because he believes the stock is going down in price and this news has been kind of shocking to a lot of people especially people that are long tesla and they're bullish on tesla many of them have been frustrated by this news angered by it many of them are calling michael bury stupid or dumb or that he got it right one time in 2009 and now he's he's making a huge mistake and he doesn't know what he's doing there's simply been a lot of bad takes on this news and a lot of misinformation being spread so in this episode i want to clarify a few things on this story both about his short position and how this really functions and about michael bury's history beyond just watching the movie the big short i want to explain a little bit more about his history and why i think he's one of the best investors currently alive now we also have an update on my portfolio i'm going to tell you what i'm buying with the money from the proceeds of my att sale if you haven't seen the previous episode i sold 15 000 of at t stock after they did that big announcement that they're selling warner media and cutting their dividend in half i thought there was a good chance the stock price could fall as a result of this announcement so i sold out of the company it's since dipped down around eight and a half percent and i'm going to explain in this episode what i've been buying with the proceeds of that sale and another thing we're going to be doing in this episode is looking at the experts on tick tock one of them is going to explain how to make a hundred thousand dollars a year easily so this is good news if you make under a hundred thousand dollars a year we have this individual that's going to explain how to bump up your pay a little bit and easily make a hundred thousand a year so if you want to stick around to the end of the episode you'll be able to see her advice so we have a lot to jump into in this episode if you like this type of content you can help out the video by thumbs upping it you can also consider subscribing to the channel if you haven't already if you actually want an alert just a little tip here if you want an alert when i post hit the little bell icon because that gives you an actual push notification subscribing just makes it so it may or may not show up on your home homepage so either way it's good but if you actually want a push notification the bell icon helps out with that now let's go ahead and jump into this main story michael bury the quote unquote big short investor is short tesla now the reaction that i've seen from the story from many youtubers that like tesla it's a very popular stock among social media many people have a big portion of their portfolio on tesla well this is obviously not the news that you want to hear that this famed investor is shorting a company that you really love and the reaction from a lot of people i've seen is anger and frustration and because of that they're calling michael berry names saying that he's stupid saying that he doesn't know what he's doing so first of all i want to clarify one thing i'm very familiar with a lot of financial youtubers i've watched their content and i can say firmly that michael bury is a better investor than anyone i know of on youtube by a lot by a mile including myself he is a better investor than anyone on youtube that i know of that i've heard of by a long shot it's not even close there's not even a near second place to them in terms of investing acumen that's the first thing that i want to clarify and i would extend that also to cnbc most of the talking heads and the people on cnbc don't have anywhere near the investment acumen that michael burry has and many people also seem to have the perception because michael bury's name is always tied to the big short that he's a one-hit wonder that he got lucky one time that he did this one big bet shorting the housing market shorting the mortgage market and that he made a lot of money doing that and he's kind of just riding on the coattails of that success that's just not accurate michael bury is not a one-hit wonder he's not somebody that's gotten lucky on one big bet in fact the whole reason that he started his hedge fund was because he had a blog where he was putting his trades and putting his calls and his positions online and so many people realized that he was so routinely correct with his predictions that they wanted him to start a hedge fund they begged him to start a hedge fund and so he did and we could look at his level of dedication to his investing in his first hedgehog letter in january of 2001 he says as i write this i personally have over 1 million dollars invested in this fund you should understand that this amount represents the vast majority of my net worth the entire amount of my net worth aside from that required of daily living expenses so he's saying that he's all in he has everything that he's worked for in this fund he says i maintain no personal security accounts aside from the investment in this fund and my entire professional focus is on this one fund scion capital does not manage separate accounts or participate in rap free programs i almost certainly notify you at once if any one of these circumstances should change though you can be quite confident that you will not hear from me on this matter that was january of 2001.
now we can actually look at the performance of michael bury's newly formed hedge fund keep in mind this was 2001 during a time where the entire market was going down quarter after quarter month after month year after year the stock market was falling companies were falling in price all around you this is the environment that michael bury started as hedge fund in in the first half of 2001 since inception scion capital was up 37 while the s p 500 was down 13 that's getting it started right off the bat he's in the green getting his investors 37 returns while the s p 500 is down 13 then we can look at the third quarter of 2001.
since inception he's up 22 while the s p 500 is down 26 you realize how difficult this is to accomplish it may be easy to outperform spy during the good times when the s p 500 is in the green but going into the green 22 while the s p 500 is down 26 is incredible performance it shows that it doesn't really matter what the market is doing he's finding ways to make a gains anyways and then the end of 2001 since inception scion capital is up 68.24 percent while the s p 500 is down 18.5 percent 68 in the green while the rest of the market is down 18 that's the type of investment performance you're getting from michael bury and of course his outperformance wasn't just limited to 2001.
looking at a bigger time scale from the year 2000 to 2006 the s p 500 during that entire time from 2000 to 2006 six years it returned a total of 3.21 percent that was the total return of the s p 500. michael bury's fund at that same time returned 208 so 3 percent to 208 he is not a one-hit wonder he is someone that routinely and consistently finds value and he makes really good risk adjusted returns leading to outperformance of this magnitude so we know that his performance was well phenomenal between 2000 and 2006 but how was his performance in 2009 remember the big market crash then well of course we know that his performance was pretty good even though he suffered an investor revolt and many investors in his fund they were skeptical about his predictions like we see a lot of people right now with this tesla prediction they thought he was inaccurate and they wanted to withdraw their capital eventually berry's analysis proved correct he earned a personal profit of 100 million dollars and he earned a profit for his remaining investors of more than 700 million dollars cyan capital ultimately recorded a 489.34 return net of fees and expenses so that's the return not counting the take that he has for managing this fund it was probably upwards of 550 if you add in those fees that was since his inception of his fund which the s p 500 for that time was again a three percent return so he earned likely above 500 returns while the s p 500 returned three percent so that's the level of investor that you're dealing with here although he's been made popular because of the big short movie and his big bet in 2009 that is not the only time he's been successful he has been routinely consistently successful for years and years and years leading up to that and even before running scion capital he was successful as an individual investor to the point where people begged him to invest their money with him michael bury as an investor has consistently outperformed the market to a degree that not many investors can now going back to a specific bet against tesla we know that this is a large position michael bury is long puts against 800 000 shares of tesla or over half billion dollars if we look at scion capital's current positions this tesla put is roughly 40 of their portfolio so this is a substantial bet against tesla now this is something that i don't think michael berry would make lightly i think he would consider the implications of it and weigh the pros and cons and i'm sure that he's done that but one thing i want to mention that often gets lost with this news is that just because this news story surfaced today doesn't mean that michael bury initiated this short position today in fact he initiated this position during the first quarter of this year the first three months looking at the actual stock price of tesla the first three months of the year he could have initiated this position at any point during this time period and he's well within the green likely he's already sold out of a big portion of his puts because he's already pocketed a lot of gains tesla is down roughly 31 from when he likely initiated this position if he closes his short position right now he will have pocketed a large amount of gains and of course if he doesn't close his position being short tesla and the price continues to go back upwards then he'll lose his gains that he's earned so far so my opinion i think that he's already well within the green on this bet and he's probably pocketed some gains by closing out of a portion of this position that's what i think he would be doing because tesla going down 30 is already a huge success on a short bet and if he continues with this position he is running some risks the risks he's running are highlighted by gene munster giving his opinion on this this situation with michael berry's short position he's an analyst he mostly covers big tech companies and i think he's a pretty good analyst this is somebody that i like to get his opinion on he explains the risks that michael berry is taking on if he doesn't close out of this position the dicey part of this short call ultimately is when you're shorting a theme it gets really dangerous i was a sell side analyst for a long time i made many of an incorrect call the most frequent mistake that i made as an analyst was making a recommendation based on valuation when there was a secular theme he says the biggest mistake he made as a sell-side analyst was recommending that a stock would go down because of its valuation and what he learned is when there's themes in the market stocks don't trade with their valuation in fact they can trade far away from their valuation for a very long time so that's his big concern but a uh i think a risky bet to to go against this company long term he gives what i think is an accurate warning against shorting tesla on a fundamental basis for the long term because you're going against the whole theme of renewable energy evs and all these companies taking market share which is just difficult to do steve eisemann was another investor that was made famous in the big short because of his short position on the mortgages he made like michael bury a lot of profit doing that and he also went short tesla on a fundamental basis saying the stock was overvalued and he ended up losing money on this position to the chase are you still short tesla i covered a while ago how did you cover what was the decision tree to to make that decision well everybody has a pain threshold and you know when the stock becomes unmoored from valuation because it has certain dynamic growth aspects to it and it has cult-like aspects to it you have to just walk away so eisman quickly learned that going short a stock like tesla that has those cult-like aspects dynamic growth and it doesn't really trade on its valuation really isn't a thing that he wants to do so i can't tell you how this is going to turn out we'll have to wait and see in his next filing if he ends up making money or losing money on this but my best guess is that he's already taken some gains from this position now moving on i want to give an update on my portfolio and let you know what company or what holding i'm buying if you want to see an update of my portfolio there's a link in the description it says dividend portfolio you can click on that and you can see any of the holdings in my portfolio now in the last episode you know that i sold out of 18t after they made that big announcement that they're selling off time warner and they're cutting their dividend and it's it's a lot of changes going on with att so i felt better selling out of it and then putting my money elsewhere so in the telecom pi i only have verizon currently and i had 15 000 in cash that i need to spend now i've already spent a good portion of that and what i've been buying is in the income fund you can see i have another purchase going in it today which is schd that is a new etf in my portfolio i'm happy to have it in my portfolio i think it is an incredibly well-run etf i'm going to try to build this position to a 20 000 position now i want to go over what schd is for people that are not familiar because i think this is one of the best if not the best dividend growth etf that exists morningstar has a write-up and summary on this etf giving it a five-star silver rating they say that the process the people and the parent all three categories are above average and they call this openly an excellent dividend fund which i agree with the way that this fund is constructed is they select a hundred companies that have paid dividends for at least 10 consecutive years and they boast the financial health to bolster their chances of continuing that streak stocks in the portfolio tend to come with relatively modest valuations because the index considers yield when selecting constituents for instance the p e ratio of the fund is currently 15.6 while the s p 500 is like 23.
so the average company in this portfolio in this fund is a lot cheaper of a company trading at a lower multiple than the rest of the market the index does focus on strong profitability so that's something that you have to have to get in this etf you have to be a profitable company which they say limits risks and helps it avoid firms that may cut dividends bending towards profitable stocks should aid in performance as well this factor has historically been tied to market beating returns so if you have a portfolio where every company in it is highly profitable that's usually a factor that ends up beating the market over long periods of time now the way that they arrange the stocks i think is pretty neat they say that it is market capitalization weighted with a modified approach they limit each stock's weighting to four percent and each sector is weighting to 25 so you can't have quite as much concentration and that helps spread the risk around and then best of all the fund has a current 0.06 percent fee which ranks well within the cheapest decile of morningstar category and gives it a double edge over more expensive peers so to summarize this is an etf made by schwab which is a reputable company they're very good at making funds and it's an etf that offers a hundred highly profitable dividend-paying companies with a low turnover rate and it's at a dirt cheap expense ratio so i'm excited to have this as part of the portfolio this is a fundamentally sound etf over the past year it's also beat the s p 500 and many other indexes like the qqq and has kept up with the broader market and even surpassed it over long periods of time so i think it's a great etf to have in a portfolio it also offers a dividend yield of roughly double what the s p 500 is right now so will also offer me constant income and that is the focus of this with the income fund between jeppy the covered call etf and schd i'll have constant dividends rolling into my portfolio helping me buy new shares of different companies so that's an update on my spending what i've been doing with this cash i'll probably continue to buy schd with my current cash balance and i'll let you know if i find any other companies that i think are on a good deal but right now i feel fine building up these positions in these really good etfs now again if you want to see my entire portfolio there's a link in the description now last but not least i wanted to turn to the advice of tick tock and the experts and gurus on tick tock to help out the audience here because i know i know a good portion of you just statistically don't make a hundred thousand a year because first of all that's a lot of money the median household is like what 65 000 and sometimes that's that's multiple people working in the household so a hundred thousand a year is a lot of money well this young lady she's nice enough to tell us how to easily make a hundred thousand dollars a year so let's go ahead and listen to our advice and you can thank me later for for helping you out okay real talk you guys making 100k a year is not that hard all you have to do is make 274 dollars a day that's all you have to do and when you think about it that way and you really break down the problem the problem is you have to make a hundred thousand dollars a year that's a big number but if you break it down to 274 dollars a day now it seems like you can tackle it now it seems like a much easier easier thing to accomplish right just 274 dollars a day and that's seven days a week not not your five-day work week so this is you're working on weekends as well but let's go ahead let her explain how to easily do this so what i did was i learned how to trade the stock market that's step one you learn how to trade the stock market now there's people that dedicate their entire lives to learning how to trade the stock market and as most data shows most of them don't make a lot of money doing that but let's go ahead and just see what else she has i learned how to trade the forex market okay so step two is forex i'm gonna have to trade the crypto market crypto market as well okay so just learn how to trade the stock market forex crypto i learned how to trade binary options and binary options okay i learned how to do marketing and learn how to do marketing so that's really it that's all there is to it to making a hundred thousand a year and she figured this out at age 22.
so i have no doubt in my mind that all of us can figure this out all of us should be making over a hundred thousand you just have to follow these easy steps of learning stocks forex crypto binary marketing it's really that easy so you can thank me later for sharing this advice with you now you can make a hundred thousand a year and i hope you all have a great rest of your day i'll catch you in the next episode
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