Michael Burry, a prominent investor known for his successful prediction of the 2008 housing market crash, has made another forecast, this time predicting a Wall Street crash by the end of this year.
Burry’s fame was cemented through the film “The Big Short,” where he was portrayed by Christian Bale. Reports reveal that he has invested more than $1.6 billion in a bet against the market’s performance in 2023.
Burry bets big on S&P 500 and Nasdaq 100 downturn with over 90% of portfolio
Recent Security Exchange Commission filings have disclosed Burry’s negative options on the S&P 500 and the Nasdaq 100, which represent the broader US economy.
It is indicated that over 90% of his portfolio has been allocated to this market downturn bet.
Burry’s hedge fund, Scion Asset Management, has strategically acquired substantial stakes in put options for both stock-market indexes.
Put options grant the right to sell an asset at a predetermined price. His positions encompass $866 million in put options against an S&P 500-tracking fund and $739 million in put options against a Nasdaq 100-tracking fund.
This move comes as the S&P 500 has experienced a 16% increase and the Nasdaq 100 has risen by 38% this year.
Burry is recognized for his prescient actions in the mid-2000s, including his decision to bet against the housing market, which eventually contributed to the global recession.
Although he has made accurate predictions, Burry has also had his share of missteps. Earlier this year, he posted contradictory messages on Twitter regarding market sentiment.
His account, with 1.4 million followers, has since become inactive, a move that followed his deletion of Twitter activity in response to Elon Musk.
“The Big Short,” initially a bestselling book by Michael Lewis, was adapted into a film in 2015, featuring stars like Steve Carell, Ryan Gosling, and Brad Pitt.
Bale, who portrayed Burry, praised the investor for his deep understanding of numbers and their consequences, portraying him as a person who perceived himself not as a hero, but as someone who comprehended the unfolding financial situation.
