'Big Short' investor Michael Burry warns stocks will crash and rallies won't last. Here's a roundup of his recent tweets and what they mean.
Michael Burry, the hedge fund manager of "The Big Short" fame, rang the alarm on the "greatest speculative bubble of all time in all things" last summer. He warned the retail investors piling into meme stocks and cryptocurrencies that they were careening towards the "mother of all crashes."
The Scion Asset Management chief's dire prediction may be coming true, as the S&P 500 and Nasdaq indexes have tumbled 15% and 24% respectively this year. In tweets he's since deleted, Burry has taken credit for calling the sell-off, explained why he expects further declines, and cautioned against buying into relief rallies.
The S&P 500 index has rebounded strongly from the pandemic crash in the spring of 2020, rising from a low of 2,192 points to 4,089 points as of Tuesday's close. However, it could plummet by 54% to 1,862 points in the next few years, Burry tweeted on May 3.
When the S&P 500 has crashed in the past, it has traded lower several years later, Burry noted. He pointed to the index bottoming 13% lower in 2009 than it did in 2002, 17% lower in 2002 than it did during the Long-Term Capital Management fiasco in 1998, and 10% lower in 1975 than in 1970.
