- Michael Burry expects US stocks to fall further and many investors to incur heavy losses.
- The “Big Short” investor compared the ongoing market slump to the onset of the dot-com crash.
- Burry slammed the passive-investing boom for inflating asset prices in recent years.
Michael Burry warned US stocks have further to fall, compared the current market downturn to the onset of the dot-com crash, and predicted many investors would suffer painful losses in a flurry of since-deleted tweets over the weekend.
The investor of “The Big Short” fame noted in a Friday tweet that there are 218 companies with a primary stock listing in the US, a market capitalization north of $1 billion, and annual losses exceeding $100 million. Of those, 29 boast market caps over $10 billion and are worth a combined $655 billion, he added.
“Saying it again. ALL the silliness must go,” Burry wrote. He was nodding to a tweet in August in which he complained that “COVID-era silliness” had returned to markets, and emphasized that such speculation had inflated past bubbles but eventually disappeared every time.
The Scion Asset Management boss pointed out in a Saturday tweet that 13.48% of US stocks closed above their 200-day moving average on Friday. That percentage was 1.2% when the market bottomed in 2009, and 2.8% in 2020, he noted.
“Currently at December 2007 levels,” he added, suggesting he expects stocks to drop significantly lower before bottoming out. Burry has previously suggested the S&P 500, which is already down about 25% this year, could plunge another 48% to around 1,900 points.
In a Sunday tweet, Burry said the current market backdrop reminded him of the second half of 2000 — some unloved stocks were trading at bargain prices, but high-flying names had further to fall.
“Another feeling I’m getting is mid-late 2000,” he said. “Free cash flow totally on sale and ignored while former momentum stocks are coming down but not far enough, and darling ‘better businesses’ still had a ways to fall. Value was about to take off for years despite more crash on the way.”
In a follow-up tweet, Burry accused index funds and exchange-traded funds (ETFs) of mindlessly driving up asset prices. He also compared the market to a packed theater, and warned many investors would be crushed as they all rushed for the exits.
“Difference between now and 2000 is the passive investing bubble that inflated steadily over the last decade,” he wrote. “All theaters are overcrowded and the only way anyone can get out is by trampling each other. And still the door is only so big.”
Burry is best known for his billion-dollar bet against the mid-2000s housing bubble, which was chronicled in the book and the movie “The Big Short.” He also placed wagers against Elon Musk’s Tesla and Cathie Wood’s Ark Innovation fund last year, and purchased a stake in GameStop before it became a meme stock.
The Scion chief has been predicting a devastating market collapse for a while. He highlighted “the greatest speculative bubble of all time in all things” in June last year, and warned it would end in the “mother of all crashes.”
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GEO, the only stock he said he would buy, is in a holding pattern after the jump following his announcement.
Geo is a REIT. A bit of a crazy call. If anything, real estate is in the biggest bubble in many places.
And the revenuers continue to escalate a property’s “value” for tax considerations.
1987 crash bought the dip.
2000 crash bought the dip.
2008 crash bought dip.
Now I make more in dividends than salary.
BTFD!!!!!!!!!!!!!!!!!
House is paid off too.
Good for you cruel accountant,
1999 cashed in a 401k, paid the taxes and the penalty, got debt free, put half of it into Gold & Silver…ten years later had close to a 600% profit.
1999 got out early of every stock market crash since…and back in late until I retired in 2015 and took out all the profits (waiting in Money Markets during the crashes) and put the $ into our farm, prep, and self-sufficiency.
SLEPT LIKE A BABY WITH A BIG TEAT IN HIS MOUTH during the crashes.
1983 to 2021 stacked junk pre- 1964 Silver and Silver 1 oz. American Eagles coins. Holding most for the coming SHTF event! Always bought the silver DIPs!
2012 to 2022 stopped buying my daughter, son in law, and grandson presents…gave them silver tubes of 20 1 oz. American Eagles instead. Legacy ‘real money’ instead of ‘more stuff’.
2018 Gold drops to close to 1,200…went in BIG…2020 sold the 2018 buys at close to a $700 dollar an ounce profit.
2020 built our dream home about 1/3rd on PM profit. Renting out another modest home we lived in while building the farm.
Many ways to skin a cat (sorry James).
Soon PMs will be unattainable…as the third PM Bull Market of my lifetime is on the launch pad. just saying.
Mark
Either you are a genius or damn lucky!
I vote for genius.
Don´t buy the dip now! For it is not just a dip. My 2 cents, but then again, I have neither dividends nor salary.
Prolly be alright.
Hope the fkrs brakes go out!
Something stinks… I think the guy behind me shit his pants, I’m going to tell Jill on him, she hates when people shit their pants…
Who done it?
Debt? A figment of the imagination. All debt was settled at 50 cents on the dollar, the art of the deal.
Now Now dearie… it was only a dream… go back to sleep and we’ll all creep on you as you do…
I love that movie especially when fall comes around , tree leaves are falling, cooler days, no “indian summer” , so far, etc. I’m not into pagan rituals like halloween, but the time of year is reminiscent of The Wizard of Oz flick. Actually about another month here to really “feel” the nostalgia.
All this happy horse hockey was probably written before the OPEC+ group announced cutting Oil production two million barrels per day. What’s this “+” business? Is it a gay oil cartel? LOL!
LOL. I think it’s OPEC + Russia (mostly). Yeah, I saw that. The other thing is that everyone forgets that the curtailment of supply of fertilizer and potash from Russia and Belarus isn’t about to end. Yes, Canada is still #1 in potash and yes the US hopes to ramp up production of fertilizer https://www.fairfieldsuntimes.com/news/state/usda-hopes-to-boost-fertilizer-production-as-soon-as-next-year/article_92ed2ccf-f8dc-5c10-9e2b-40223a2ab655.html but as this article states “Michigan Potash has said its facility will have the capacity to fully supplant Russian imports of the fertilizer, but full production isn’t expected for three years.”
The world is still eating grain from 2021. The global food shortage is just starting. The 2024 harvest is a best-case scenario for increased yields.
Turdo will probably ban potash exports, to save the environment.
Yes, there will be a crash. As long as QE is ongoing, it’ll be delayed and muc h worse once the hot water is turned off.
BTW, 1 oz. silver US Eagles are trading $195.00 above melt as of 10/4.
Must be a typo, silver eagles are $37 each provident metals this time
…maybe 195%? What it seems.
I wish.
But that’s equated in USD? Just trying to figure out what will be used to determine “worth” when USD goes away. I’m thinking quartz as there is a whole lot of it to go around.
All those upper middle class Karens who called the unjabbed “selfish” and voted for Biden over that dumb “grab em by the P” comment will soon find themselves at the welfare office looking for food stamps with the same people they evict from their neighborhoods. Prepping isn’t a thing in the upscale areas.
The people who are going to suffer heavy losses are not investors, they are gamblers. Most investors took leave of these markets long ago. Anyone who is left, deserves to lose their money, and will gain a valuable education at the cost of most of their retirement funds. When you play the game that involves the greater fool theory, you often find out the fool is you..