American stocks are down big time from their recent all-time highs, but they have a whole lot more to fall before bottoming out, according to Michael Burry, an investor featured in the film “The Big Short.”
According to Burry, who is constantly tweeting, then un-tweeting, cryptic stock-related messages, the current downturn is only just the beginning. What is soon to come will be much, much worse – perhaps the collapse to end all collapses.
On Friday, Burry tweeted that there are currently 218 companies with a primary stock listing in the United States; a market capitalization north of $1 billion; and yet have annual losses exceeding $100 million. Of these, 29 boast market caps over $10 million, and are worth a combined $655 billion.
“Saying it again,” Burry wrote. “ALL the silliness must go.”
This tweet was a nod to an earlier tweet of Burry’s back in August that complained about all the “COVID-era silliness” that he says has returned to the markets. What he seems to have meant by this is that the bubble of everything has only gotten bigger – meaning an even bigger pop is on the way (Related: Ron Paul has been warning for years that eventually the corrupt and fraudulent stock markets will collapse).
On Saturday, Burry, who heads Scion Asset Management, tweeted that 13.48 percent of all U.S. stocks closed above their 200-day moving average the previous day. When the markets bottomed out in 2009, that figure was just 1.2 percent, and in 2020 it was 2.8 percent.
“Currently at December 2007 levels,” Burry added, referring to the time frame before the infamous crash of 2008.
So far this year, the S&P 500 is down about 25 percent. Burry believes there could be another 48 percent drop, bringing the index down to around 1,900 points.
On Sunday, Burry tweeted again, this time about how he believes current market conditions are reflective of what happened during the second half of 2000 when the so-called dot-com bubble burst.
“Another feeling I’m getting is mid-late 2000,” Burry wrote.
“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 way to fall. Value was about to take off for years, housing bubble despite more crashes on the way.”
In yet another tweet, Burry accused index funds and exchange-traded funds (ETFs) of driving up asset prices mindlessly. He then compared the current market to a packed theater where, once the gunshots go off, will result in everyone trying to make an exit all at the same time, leaving some people crushed.
“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 the billion-dollar bet he made against the mid-2000s housing bubble, which is the focus behind “The Big Short.” Burry has also made bets against Elon Musk’s Tesla and Cathie Wood’s Ark Innovation Fund. Burry also invested in GameStop prior to its early 2021 run-up.
Burry is convinced that a much larger market collapse is soon to come. He describes it as “the greatest speculative bubble of all time in all things,” warning that it will soon culminate as the “mother of all crashes.”
“The ‘American Dream’ bubble is about to burst!” wrote a commenter at Natural News to a story we published several years back that seems to be coming to fruition for many. “Get ready to wake up to cold, hard reality. Welcome to hell.”
More related news coverage can be found at Collapse.news.
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