"The Big Short" Investors Are Betting Big On Gold

“The Big Short” investors Danny Moses, Vincent Daniel and Porter Collins believe that currencies will quickly lose value, and one of their main bets is precious metals. This article will look at why these investors are choosing to back the gold market and are investing in gold. It suggests why the demand for gold may be increasing in both the short term and long term.

“I don’t think Americans have enough gold in their portfolios,”

Collins said in an interview with CNBC

Three investors bet heavily on the downturn in the real estate market before the 2008 financial crisis. In particular, bets were placed on the depreciation of mortgage-backed securities. It was the crash of these securities that was one of the main causes of the financial crisis. Investors became famous primarily through the book and movie of the same name, The Big Short.

Collins, who co-founded the investment firm Seawolf Capital with Daniel, said the main reasons for betting on gold are the massive gold purchases by central banks and the United States budget deficit.

“If you think about a dollar in your pocket, it’s going to be worth less tomorrow,”

Collins said

“I think one, two, three, five and 10 years from now you’re going to make a lot more money in gold than in US Treasuries. I just don’t think it’s going to change.”

The price of gold has risen by nearly 29 percent in dollars this year, to $2,654 for an ounce of gold

Silver has risen in price by 31 percent and costs $31.1 an ounce.

“Gold has done exceptionally well in the past,” Daniel pointed out. They highlighted the importance of gold in the portfolios they manage in their annual letter to shareholders over the summer.

Bets on Precious Metals and Mining Companies

“Neither of us can say whether we are optimistic or pessimistic about the US economy right now. We can see the economy cooling down, but in the long term we are betting on gold, gold mines, silver, platinum and bitcoin,” they wrote in a letter sent to investors.

“This whole group of investments is based on the thesis that the dollar is rapidly losing its purchasing power. In the last four years, it has been up and down, but we have used practically every downturn to buy these assets.”

Danny Moses, founder of Moses Ventures, is also very bullish on gold. He has contributed gold through the Sprott Physical Gold Trust.

Michael Burry’s Bet on Gold

Michael Burry, who became known after the film “The Big Short”, also bet on gold. He made a total of nearly $3 billion in 2008 by betting on the downturn in the real estate market.

Burry already made a big bet on gold in the first quarter of this year, while selling shares in several technology companies. For example, he dropped Amazon and Alphabet in his portfolio. He bet nearly $8 million in gold.

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Key Takeaways

“The Big Short” investors – Danny Moses, Vincent Daniel, Porter Collins, and Michael Burry – are placing substantial bets on gold as they anticipate further depreciation of the U.S. dollar and increased volatility in the global financial system.

Drawing from their successful predictions in the 2008 financial crisis, they now view precious metals like gold and silver as safer long-term investments in a world where central banks are aggressively stockpiling gold and government deficits continue to grow. With inflation fears rising and traditional “safe harbour” assets, such as U.S. Treasuries, losing their appeal, these investors see gold as an essential hedge against uncertainty.

For those seeking stability amid potential economic upheaval, their strategies underscore a renewed confidence in precious metals as a means to preserve wealth and protect against the erosion of purchasing power in the years to come.