July 12, 2024

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‘Big Short’ investor Michael Burry rang the recession alarm, bet against the S&P 500, and scooped up bargains in 2023

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Michael Burry of “The Big Short” fame.Kevin Mazur/WireImage

  • Michael Burry issued dire warnings, took short positions, and pounced on bargains in 2023.

  • The investor predicted inflation and recession, and bet against the S&P 500 and microchip stocks.

  • Here are “The Big Short” star’s three big highlights of the year.

Between his bleak forecasts for the stock market and economy, his bets against the S&P 500 and microchip stocks, and his bargain hunting during the regional-banking crisis, Michael Burry had an eventful 2023.

The investor is best known for predicting and profiting from the mid-2000s housing bubble, after his massive bet was immortalized in the book and movie “The Big Short.” He also placed eye-catching bets against Elon Musk’s Tesla and Cathie Wood’s flagship Ark fund in 2021, and bought into GameStop long before it became a meme stock.

Here are Burry’s three highlights of 2023:

1. Doom and gloom

Burry started the year in classic style with a slew of grim predictions.

“Inflation peaked. But it is not the last peak of this cycle,” he posted on X in early January. “We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition.”

“Fed will cut and government will stimulate,” he continued. “And we will have another inflation spike. It’s not hard.”

Burry proved to be right that inflation would drop by the second half of this year; it has fallen from over 9% at its peak last summer to below 4% in recent months. However, a recession hasn’t materialized so far with US GDP growing by an annualized 5.2% in the third quarter. Inflation hasn’t resurged either, and the Federal Reserve is yet to cut interest rates after raising them to 5% to curb price growth.

The Scion Asset Management boss shared a few worrying charts over the next few weeks, including one comparing the S&P 500’s trajectory at the time to its ill-fated rally during the dot-com crash in the early 2000s.

He sent alarm bells ringing at the end of January when…

2023-12-31 21:23:02

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