Michael bury and kathy would just did the unthinkable. The two renowned investors are now fighting each other to death in michael bury's latest sec filing he disclosed that he was shorting over 30 million dollars of ark's innovation etf via put options. Obviously, kathy wood was not only confused but extremely furious. She proceeded to go on a rampage and completely unraveled michael bury's argument against her short sellers have been a problem with innovation related stocks.

For years, elon musk once said that short sellers are jerks, who want us dead, they're, constantly trying to make up false rumors and amplify any negative rumors kathy wood has had her fair share of hatred, but she is now going against the king of short sellers, michael Burrie, this video will go in depth on the heated drama, in how kathy wood just initiated an intense war against buri. As most of you know, michael burry successfully shorted the housing market in the 2008 recession and made immense amounts of profits. This led him to be one of the four short sellers that were featured in the movie. The big shore brewery is now initiating what he believes will be the big short too, as he thinks the biggest crash of all time is coming soon.

That's right, michael berry has been warning of a crash bigger than the 2008 recession, the dot-com bubble and the great depression in bury's latest 13f filing he disclosed that he recently doubled down on his bet against the entire stock market. This bet on the crash of america was done via put options in simple terms. A put option is a contract to sell 100 shares of a stock at a predetermined price. In this example, we are selling 100 shares of tesla at 700 per share.

The seller of the put options will have to buy those 100 shares at the predetermined price of seven hundred dollars. If the current price of tesla stock is 650 dollars per share, then we pocket the difference for those 100 shares which is equivalent to five thousand dollars in profit. These put option contracts cost money in the first place, which is the premium in this case. If the premium was thirty dollars per share, it would cost us three thousand dollars to buy this put option contract for 100 shares of tesla by taking the profit from exercising the contract and subtracting it by the cost.

Then we get a net profit of two thousand dollars which is equivalent to a sixty percent overall gain for our invested money bury increased his position in tesla, put options by 34, which means that he now has contracts for over 730 million dollars worth of tesla stock. Additionally, he also increased his put options on a treasury bond etf by an astounding 53 percent, which covers over 280 million dollars worth of the bond etf that he is shorting brewery also has over 30 million dollars worth of ark's innovation etf via put option contracts. Brewery's put options on tesla stock bonds and ark's innovation, etf, practically screamed that bury thinks kathy. Wood is doomed.

Of course, kathy doesn't agree with bury's put options, as she recently went on a twitter rampage against michael burrie by essentially saying that burry hasn't seen several key indicators pointing against him to gain some context. Michael burry warned a few months ago that hyperinflation is coming as a result of hyperinflation. He believes that growth stocks and cryptocurrencies will face the biggest crash. Ever cathy's argument starts out with a general view of the stock market and the economy and ultimately ends with heated criticism for bury in particular, kathy said.

Most bears seem to believe that inflation will continue to accelerate shortening investment time horizons and destroying valuations. Despite what we believe has been a supply chain, related short-term burst in inflation, both equities and bonds have appreciated since march. In other words, michael brewery's bet, which was initiated a few months ago, is not playing out. As expected, bond yields are continuing to decline, as investors are expecting lower than expected inflation.

Not only that, but stocks have also continued the rise since march of 2021, which signals that the equity market isn't worrying much about inflation. Some might say that our current situation is very similar to the dot-com bubble, but that definitely isn't the case. Kathy explains that, unlike the tech and telecom bubble, this equity bull market has broadened beyond the innovation strategies that booms last year to value. In other stocks that had trailed the bull market has strengthened citing the stage we believe for another leg up in innovation strategies.

Since the beginning of 2021, we've seen growth stocks underperform in comparison to value stocks like legacy, auto energy and financials to most investors. They might think that ark's underperformance in 2021 is a horrible sign, but kathy knows that the opposite is true. The underperformance is a positive signal. Instead of an exponential rise in growth stocks, like the dot-com bubble, we've seen, growth stocks increase first in 2020 in value stocks follow with an increase in 2021.

This means that the rotation will likely go back to growth soon, causing another substantial rise in growth stocks kathy stated that the equity market is likely to reward disruptive innovation strategies once again when headline inflation breaks and or fuels a recession increase. There are two scenarios here that kathy sees the bond market predicting right now. The bond market has continued to rally over the past few months, leading bond yields to go down over the same time frame. This hints at one of the two possibilities: investors are preparing for a recession or inflation isn't going to be as high as expected.

In the case of increased fears of a recession, investors are flocking towards bonds. As a result, the bond market is continuing to rally and bond yields are continuing to fall. This would be beneficial for growth stocks, because growth-oriented companies have to borrow money more often, so in the first scenario, growth stocks would go up significantly. The next possible explanation for bonds rallying over the past few months is lower inflation.

Consumer prices are increasing all across the board, and many of us have witnessed it firsthand. However, several indicators are signaling that inflation is starting to cool down. One of these signals is commodity prices. Kathy explains that since mid-may a number of commodity prices have been breaking down.

Lumber down 65 to 70 percent, copper down 10 to 15 percent and oil down 10 in unexpected increase in the dollar also is negative for commodity prices. Over the past few months, we've seen the u.s dollar index continue to rise from 89 in may to 93. Today, this, along with commodity prices falling, is pointing towards lower inflation. Not only that, but kathy mentioned that now the mannheim used car index a leading index for new car sales is slipping.

The mannheim used car index is an index that tracks the price of used cars. This index has been falling month after month lately, which hints at lower inflation. All of these short-term deflationary signals, combined with long-term deflation from innovation and disruption, are signaling towards lower than expected. Future inflation.

Lower inflation expectations lead investors to buy bonds, causing bond yields to go down. Low bond yields are again beneficial to growth stocks in both scenarios that we covered growth stocks have come out on top and will continue to do so. Kathy explains that if the bond market is correct, one or both of the scenarios will be obvious during the next three to six months. Therefore, if what kathy said is true, the best time to buy growth stocks is actually right now leading bury to lose a substantial amount of money.

Now, although michael bury successfully predicted, the housing crash kathy believes that bury is completely wrong right now, kathy said to his credit, michael bury made a great call based on fundamentals and recognized the calamity brewing in the housing and mortgage market. I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space. This might seem like nonsense and in the sense you would be correct. Innovation isn't creating much deflation right now and likely won't create much deflation in the short term.

For example, evs are growing at a rapid pace, but they still make up a small percentage of total vehicles produced right now. Therefore, gdp and revenue growth likely won't be affected. Much by innovation in the short term, however, once exponential growth takes place and innovation starts to make up a large portion of the us gdp, then macroeconomic indicators, like inflation, will be heavily affected. Kathy said that if we are correct, gdp and revenue growth will diminish until the opportunities in nation technologies begin to move macro needles in this environment.

Innovation-Based strategies should distinguish themselves. So while the us gdp won't be affected much in the next couple of months, kathy sees innovation, creating a significant amount of deflation in the next couple of years. The dot-com bubble was premature, and now we are finally seeing innovation start to make dramatic changes to our lives. Kathy then explained, in our view, the seas for the innovation explosion that arkan vest is dedicated to researching, were planted during the 20 years, ending with a tech and telecom bust having gestated for more than 20 years.

These technologies should transform the world during the next 10 years. Obviously, michael bury doesn't agree with kathy at all. He thinks that everything kathy just said is nonsense and is all speculation. A couple of months ago, brewery pointed to the amount of speculation occurring right now and warns that the major crash was coming bury stated on twitter.

That people always ask me what is going on in the markets. It is simple greatest speculative bubble of all times in all things by two orders of magnitude. Hashtag flying pigs, 360., kathy wood and michael bury are clearly two polar opposites when it comes to their view on the future of the stock market. Kathy sees innovation destroying risk-averse companies over the next decade, whereas michael bury sees almost everything crashing in the biggest collapse ever.

Let me know which investor you agree or disagree with down below. If you enjoyed this video, please hit the like button and subscribe and i'll see you in the next one.