Thoughts on Michael Burry’s warnings?
He’s been shouting warnings from the rooftops for the last couple of months, and has a history of being right. How seriously should people take his warnings? Michael Burry Warns Retail Traders About the ‘Mother of All Crashes’ https://www.bloomberg.com/news/articles/2021-06-18/crypto-meme-stocks-michael-burry-warns-about-mother-of-all-crashes #investments
Bloomberg
I haven’t read into exactly what he’s saying but there is some serious shit happening right now. Commercial mortgage backed security (CMBS) collateralized debt obligations (CDO) are being pumped full of subprime loans, very similar to what happened leading up to 08. With COVID the delinquency rate on these loans has skyrocketed and banks are feeling the tension. I am not a financial expert but do some research on this as it seems pretty clear that something bad is going to happen in our financial system. My hedge is $GME
He bet big on Tailored Brands (aka Men’s Warehouse) increasing his stake sharply last year. So big, he acquired 8.3% of the company. Yes, going big on cheap suits during a pandemic, WFH boom and against any sort of trend in professional attire, fashion or anything else. So, just because he won his big bet - doesn’t make him infallible.
Love posts like this. Wonderful example of how people fall prey to lazy stupid journalism. Some random idiot is making a fake unverified account in the name of burry and people are following cause wsj and Bloomberg are printing it.
I agree with him about the Crypto and meme stock crash. Not sure about the timing, no one can predict that. Bubbles can last for a long time.
It'll affect broader markets too. Just like internet and banks caused broader recession.
Exactly, this is my concern. There are clearly sound value investments around, but can the whole market be taken down by meme stocks and crypto? The million-dollar question 🤔
I'm selling stocks and buying crypto
Talk is cheap
Already did. Sold nearly $2M in stock and $1M in bonds and went 70% btc and 30% eth
He was right about the housing market but he would have been bankrupt if the housing crash happened a few months late. He predicted it to happen in 2007 early but was 2 years late
Market can stay irrational longer than most folks can stay solvent
His point is that $GME, $AMC, and Bitcoin/shitcoins etc aren’t sound investments. It’s not a profound observation
He literally just said when meme stocks/crypto drops, people will lose money What’s new here?
That's why I'm buying more crypto
Seriously, it’s not like he says there will be roving bands or foragers in the streets or even that big tech stocks will go down. I think 90%+ of serious investor share his view.
Let me get my popcorn
why is his company long a bunch of positions then
The article says he warned against crypto and meme stocks. So I’m assuming it’s not the whole market he’s warning about, just the ones that went 10x and don’t really have any actual value.
People don't liquidate every position just because market is going to crash. Also not all stocks crash the same amount.