It must be exhausting being a professional perma-bear. But given the handful of occasions when he’s been scarily right on the money, we’re still willing to hear out Scion Asset Management founder and renowned investor of The Big Short fame – Dr Michael Burry – who has sounded the alarm with yet another completely unambiguous warning: “Sell.”
In classic Burry fashion, the message was published via tweet before he deactivated his Twitter account @cassandra – a reference to the priestess in Greek mythology cursed to share true prophecies but never to be believed – for the umpteenth time.
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This comes to light shortly after the good doctor famously portrayed by Christian Bale in Adam McKay’s Academy Award-winning adaptation urged investors not to believe the hype surrounding the recent stock market rebounds.
While last month saw the benchmark S&P 500 index and NASDAQ Composite gain 6.2% and 11%, respectively, marking the best January performance since 2001, Burry drew comparisons between what we’re witnessing in real-time and the period from September 2000 to early 2003 – essentially the dot-com bubble and aftershocks of 9/11 – which offered a similar rally.
Back in December, after dumping his entire portfolio and loading up on a single stock, Dr Michael Burry predicted that the world was in for an “extended multi-year recession.”
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“What strategy will pull us out of this real recession? What forces could pull us so? There are none. So we are really looking at an extended multiyear recession,” Michael Burry wrote in a since-deleted tweet.
Burry has long maintained the combination of consumers spending their savings, the spectre of inflation, and corporate profits being on track to tack a significant hit has essentially guaranteed a recession. And at the current stage, it’s hard to think otherwise. Especially given US Federal Reserve Chair Jerome Powell has already acknowledged the window for a “soft landing” – a situation in which the Fed cools inflation by slowing growth without causing a recession – is fast narrowing.
Brace for impact…
