Michael Burry bets against the market again

Will Burry be correct this time as well?

Fund manager Michael Burry is famous for predicting the great financial crisis and shorting real estate before the market crashed in 2008.

Well he recently became bearish again on the financial market. From the latest 13F filings Burry disclosed he has bought about $1.6 billion worth of put options for the S&P 500 and the Nasdaq 100.

This essentially means he will make money if the stock market drops. The S&P 500 or the SPY etf has entered a new bull market, but maybe Burry sees something that most people don’t.

He also bailed out of his Chinese holdings such as Alibaba (BABA) and JD stocks. He held these for awhile but has now completely sold out of them. Recently Chinese business owners and consumers told The New York Times they’re concerned about the economy. The country is dealing with declines in both manufacturing and trade. And the youth unemployment is so high the central government decided to simply stop releasing new data about it, because the best way to solve a problem is to pretend like it doesn’t exist. 😬

The U.S. economy is not doing so well either. Costco’s sales have declined year over year. And Canadian Tire recently warned that Canadian consumers have been pulling back on spending as well, due to having less discretionary money available. Its stock is down over 10% since it announced this news.

I think we are finally starting to see the effects of higher interest rates. This is why a month ago I created a video explaining why I think the latest Bank of Canada rate hike was likely going to be the last one before they start cutting.Β 

If the economy falters then so will the stock market eventually. Only time will tell if Burry’s bearish options strategy will pay off. But for now all we know is that when Michael Burry bets against the market, investors should pay attention. πŸ™‚

 

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Vancouver FI
Vancouver FI
08/26/2023 1:44 pm

Hi Liquid,

Do you think it’s time to start buying some bonds to de-risk the potential for a crash or are you still mostly invested in stocks?

Also, are you building up a cash pile in case of a crash?

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David @ Filled With Money
09/16/2023 5:25 pm

It’s definitely not an easy time to be investing right now….

Also, good to interact with you again, Liquid! I missed you buddy. Let’s finish the year 2023 strong!