Michael Burry, an investor in the “Big Short”, raised the alarm for a market collapse and recession. He then revamped all his stocks and bought Tesla this year. Here are his top four highlights of 2022.

Michael Burry.Astrid Stawiarz/Getty Images
Michael Burry made grim predictions and issued warnings in 2022.

Michael Burry, the shrewd investor who made “The Big Short” famous, gave a series of dire predictions for 2022.

Scion Asset Management’s chief warned of a sharp decline in stocks and predicted that a slump in consumer spending would lead to a severe recession.

Burry placed a bet against Apple and liquidated his portfolio. He also hinted that he might be short the market. While he also made a few jabs at Tesla and welcomed Elon Musk’s purchase of his Twitter account, he was open to taking a lot more.

These are Burry’s top 4 2022 highlights:

Crash and bubble



Jim Spellman/Getty Images

Burry predicted a massive crash in 2021 and predicted a huge bubble in asset prices. In the first half 2022, he doubled his doomsaying and warned that the S&P 500 was overvalued. It could drop to 1,900 points.

Scion’s chief also explained why stocks would fall based upon historical trends. He called out “silliness”, unwarranted optimism and market inevitability, and complained about people’s inability to listen to him.

He also warned that stubborn inflation could prevent the Federal Reserve’s bailing out of markets. He said watching the downturn was like witnessing a plane crash.

He said that all theaters are crowded, and that the only way to get out is to trampl each other.” “The door is still so small.”

The Fed, inflation, and recession



Bloomberg Risk Takers

Burry raised the possibility of inflation after reopening as early as April 2020. He has also repeatedly criticised the Fed for overstimulating the markets and not doing enough to reduce price rises.

In May, Scion’s chief warned that consumers are being squeezed by rising interest rate and skyrocketing fuel and food prices. They are also borrowing more and spending less of the money they have saved during the pandemic.

He warned that they could run out of money by 2022. This would cause consumer spending to plummet, corporate earnings to decline, and economic growth will slow down.

Burry predicted that retailers would have an inventory glut, white-collar workers will be laid off, long-term inflation would rise, and that there would be a prolonged recession. Burry also predicted that the downturn would be as severe and devastating as the financial crisis.

The stock portfolio



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This year, Scion’s stock portfolio was transformed by Burry in a number of striking ways.

In the first quarter, an investor made an unplanned bet on 800,000 Apple shares. Then, he sold all of his holdings except one in the second quarter. This slashed his portfolio’s value to $165 million, and brought down his fear of a market crash.

Although he did partially replenish Scion’s portfolio during the third quarter of 2018, Burry quickly disabuses his followers that he is optimistic about the market outlook. He tweeted, “You don’t know how short I am.”

Sparring with Elon Musk



Michael Burry, Elon MuskGetty

Burry, who placed a bet against Tesla, and clashed in 2021 with Elon Musk, continued his attack on the electric-vehicle manufacturer this year. In April, he warned that the automaker would face stiff competition and in September, he stated that he should sell off its stock.

Tesla stock plunged 70% from its peak in November last year, which may make the investor feel vindicated.

Burry, on the other hand, welcomed Musk’s participation in Twitter as a victory of free speech and a win by conservatives. Burry, the Tesla CEO, called Burry “broken clock” last summer and appeared to be warming to the investor.

Musk tweeted “You will get it back even though you shorted Tesla,” in April. He also added a crying-with laughter emoji to his tweet about Burry’s blue Checkmark.

Business Insider has the original article.
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By: tmohamed@businessinsider.com (Theron Mohamed)
Title: ‘Big Short’ investor Michael Burry rang the alarm on a market crash and recession, revamped his stock portfolio, and ripped into Tesla this year. Here are his 4 highlights of 2022.
Sourced From: markets.businessinsider.com/news/stocks/big-short-michael-burry-highlights-stock-market-crash-recession-portfolio-2022-12
Published Date: Thu, 29 Dec 2022 11:45:00 +0000