- Michael Burry declared the epic market crash he predicted is now underway.
- The “Big Short” investor checked off the current downturn as another accurate prediction he’s made.
- Burry warned the frenzy around meme stocks, crypto, SPACs, and other trends assets would end badly.
“Crypto crash. Check,” he tweeted. “Meme crash. Check. SPAC crash. Check. Inflation. Check. 2000. Check. 2008. Check. 2022. Check.”
The benchmark S&P 500 index has slumped 19% this year, the tech-heavy Nasdaq has plunged 27%, and the price of bitcoin has tanked by more than 66% from its November peak to below $19,000. However, Burry cautioned at the end of June, when asset prices hit similar levels, that the crash might only be halfway over based on how past downturns have played out.
Many of the most popular meme stocks have plummeted in price this year. GameStop has slid 34%, AMC Entertainment has dropped 69%, and Bed Bath & Beyond has retreated by 54%. It’s a similar story with the leading SPACs; Virgin Galactic shares have fallen by 57% this year, while Lucid shares have tumbled by 64%.
Burry repeatedly warned the booms in meme stocks, crypto, and SPACs, and other trendy assets during the pandemic wouldn’t last.
“Fads today (#BTC, #EV, SAAS, #memestocks) are like housing in 2007 and fiber/.com/comm/routers in 1999,” he tweeted in March last year. “On the whole, not wrong, just driven by speculative fervor to insane heights from which the fall will be dramatic and painful.”
The Scion Asset Management boss highlighted the risk of inflation as early as April 2020. He also called bitcoin a debt-fueled “speculative bubble,” and bemoaned the zealotry and aggressive promotion surrounding meme stocks and crypto.
Burry shot to fame after his billion-dollar bet against the US housing bubble in the mid-2000s was immortalized in the book and the movie “The Big Short.” He’s also known for investing in GameStop before it gained meme-stock status, and taking short positions against Elon Musk’s Tesla and Cathie Wood’s Ark Invest last year.
The Scion chief has likely escaped some of the market fallout this year, as he sold all but one of the stocks in his fund’s portfolio during the second quarter.
This content was originally published here.