Invest Like the Best with Danny Moses

After watching “The Big Short,” you might be wondering about Danny Moses net worth. Sure, the small group of observant and critical-thinking investors who profited from the housing bubble collapse made a boatload of money.

But what’s more interesting is how they determined the enormous risk that few others noticed. And how they navigated a difficult trade after developing their hypothesis on how the bubble would pop.

Danny Moses and The Big Short

Danny Moses was right in the middle of that story.

And I’m always fascinated to hear the thought process and alternative views of successful investors.

I recently listened to two interesting interviews by Patrick O’Shaughnessy on his ‘Invest Like the Best’ podcast.

Both feature investor Danny Moses, who was famous for his part in the 2008 financial crisis when he and his team bet against the U.S. housing market and profited from the housing crisis collapse.

Who is Danny Moses?

Danny Moses has witnessed countless events in his career as a municipal bond analyst, trader, institutional sell-side broker, and hedge fund manager.

Danny Moses’ profession on Wall Street led him to one of the biggest trades in history and earned his story to be documented in a major movie starring Christian Bale and Brad Pitt.

Danny was highlighted in the American biographical comedy-drama movie written and directed by Adam McKay, “The Big Short.” The movie was based on a book by Michael Lewis titled “The Big Short: Inside the Doomsday Machine.”

The Big Short movie shows how the financial crisis was triggered by the housing bubble leading to the housing market crash, turmoil in the financial markets, and eventual United States economic recession.

Investing Thoughts

Danny shares his thoughts on the cannabis industry, where he has been very active recently in his investments, such as Canopy Growth, and calls cannabis his big long trade.

He likes the emerging cannabis sector because of its massive potential in several industries. He also touches on Tesla and Solar City stock and how he discussed it with famous short-seller Jim Chanos.

Shortly after that, Danny shorted Solar City before Tesla bought out the company saving it from ruin. Danny has been a vocal short-seller of Tesla stock for some time and shares his many thoughts on why he thinks it’s a total fraud.

Danny Moses on Cannabis, Tesla, and Short-Selling

He simply cannot believe Tesla continues to operate and says Elon Musk is “full of shit.” He gives a breakdown of why he thinks the stock should be at zero and why Elon Musk is a great ‘showman’ by running a Ponzi scheme.

In an earlier podcast featuring Moses, he breaks down his role in the financial crisis and his thoughts since the crisis.

He also shares a bit of his private life and his experience in the film trade after having an actor play a character based on his real life experience in the Academy Award winning movie, The Big Short.

The Big Short

Danny explains how he hooked up with Steve Eisman, another character featured in ‘The Big Short.’ Danny, as assistant director, Steve and the rest of their team tracked housing data, loans, and the excess leverage used in the system.

Eventually, they began putting on their short trade, which he says the movie portrays reasonably accurately.

He credits “behavioral finance 101,” where the crowds behaved together without much thought or realization of the consequences.

He explains how surreal it was when the crisis began to unfold during his ‘big short’ trade, Danny was employed at a Morgan Stanley hedge fund.

How Much Did Danny Moses Make from The Big Short?

It’s unclear exactly how much Danny Moses made from his role in the Big Short trade, but I would assume it to be several millions of dollars.

Morgan Stanley was one of the biggest Wall Street banks behind the toxic CDOs which Danny and his team were shorting. Realizing that if his trade went very well, it meant that his employer would be hurt very, very severely by owning these plummeting securities.

Danny and his team had no idea if there would be anything left after the crash of his employer, Morgan Stanley, to actually pay out the gains to him and his team from their trade.

The Big Short starring Christian Bale, Brad Pitt, and Steve Carell. Based on the story of Michael Burry, Mark Baum, Danny Moses, and the Great Financial Crisis. Image – Wikimedia Commons

Working With Michael Lewis

Danny says working with Michael Lewis was an excellent experience, and he always had the best questions. After the ‘flash crash‘ of 2010, Danny reconnected with Michael Lewis, on which the book “Flash Boys” was eventually based.

So how did Danny and his team at Frontpoint Partners, along with head trader and hedge fund manager Mark Baum, played by Steve Carell in the movie, discover Michael Burry’s analysis about the CDSs collapsing?

Who Played Danny Moses in The Big Short?

In The Big Short story, it’s a misplaced call that catches the attention of Mark Baum. The Frontpoint team, including Danny Moses, played by Rafe Spall, decide to head to South Florida, the epicenter of the subprime lending spree.

What they discover is mind-blowing. Mortgage brokers make dangerous loans to home buyers and property investors with little due diligence.

Unqualified borrowers buying multiple homes with little or no documentation.

Then the mortgage brokers sell the loans to Wall Street banks, where they are labeled as high-quality securities.

The problem is they were not highly rated securities. But the investors who owned them didn’t understand their risks.

Eventually, they would feel the pain of owning securities that would not perform as expected.

Invest Like the Best

Patrick O’Shaughnessy has been hosting his podcast, “Invest Like the Best,” for many years now. There are hundreds of conversations discussing how to invest your time and money better.

Patrick also likes to discuss how to play with the boundaries in your own life. He’s focused on finding great people willing to share the things they’ve learned with others.

When he’s not podcasting, Patrick is CEO of O’Shaughnessy Asset Management in New York City.

Check out all the podcast episodes from Invest Like the Best for a variety of excellent investing discussions and interviews by Patrick O’Shaughnessy.

Also, be sure to check out the podcast by Michael Lewis, ‘Against the Rules With Michael Lewis.’

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