‘Big Short’ investor Michael Burry has warned that the biggest stock market bubble in history will end in the ‘mother of all crashes’. He just hinted that the collapse is now underway.
Michael Burry has indicated that the stock market crash he predicted is now underway.
The ‘Big Short’ investor joked that his followers always ask him when the crash is coming.
Burry suggested the S&P 500 could fall another 53% before bottoming out.
Michael Burry sounded the alarm on the “greatest speculative bubble of all time in all things” last summer, and warned investors buying into the hype they were headed for the ” mother of all crashes”.
Doomsday is finally here, he hinted in a tweet since deleted this week.
Fund manager of ‘The Big Short’ fame shared a screenshot of an S&P 500 chart, showing the benchmark stock index has fallen 18% from its December peak, despite several rallies dazzling this year.
“And yet, people keep asking me” wen crash?
Burry suggested in May that the S&P 500 could fall as much as 1,900 points, or another 53%, over the next few years, depending on how past crashes evolve. Moreover, he dismissed the rebounds in equities this year as bear market rallies or “dead cat bounces” — temporary reprieves on the road to inevitable disaster.
The position of the head of Scion Asset Management appears to be that the market boom is over, stocks are down and any rebound will be short-lived.
Jeremy Grantham, another pessimistic investor and market historian, also dismissed the recent rally in stocks as a bear market rally, in a new research note titled “Entering the Superbubble’s Final Act.”
Like Burry, he warned of a “dangerous unprecedented mix” of wildly overvalued assets, commodity price shocks and a Federal Reserve determined to rein in inflation by cooling the economy.
“Every cycle is different and unique – but every historical parallel suggests the worst is yet to come,” Grantham said.
Here’s a screenshot of Burry’s recent tweet:
Burry is best known for his starring role in “The Big Short,” which chronicles his billion-dollar bet against America’s housing bubble in the mid-2000s. He also bought a stake in GameStop before the gaming retailer video becomes the ultimate meme stock, and bet against Elon Musk’s Tesla and Cathie Wood’s Ark Invest last year.
The investor sounded the alarm bells in August, when he revealed he had all but liquidated his US stock portfolio in the second quarter of this year. Scion, which held 11 stocks worth $165 million at the end of March, only held a $3.3 million position in a single stock three months later.
Video: The Rise and Fall of the Russian Oligarchs
Read more: A Michael Burry expert breaks down what makes the “Big Short” investor special. It also revisits Burry’s iconic bet against the housing bubble and its GameStop, Tesla and Ark bets.
Read the original article on Business Insider
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