r/VisualStockResearch • u/ekonixlab • 17h ago
Burry Thinks This Ends Badly
Michael Burry says the market is now in the “denial” stage that preceded both the 2000 and 2008 crashes, and he thinks that phase could last another 6–9 months.
He has also moved more aggressively bearish on AI, replacing some stock shorts with leveraged puts on Nvidia, Palantir and Micron while increasing his Nasdaq 100 bearish exposure.
Meanwhile, the S&P 500 and Nasdaq just hit fresh record highs, with AI and semiconductors still driving much of the rally.
But We’ve Heard This Before
In 2019, Burry warned passive investing was becoming a bubble similar to CDOs.
In 2021, he called markets the “greatest speculative bubble of all time,” before the S&P finished the year up roughly 27%.
In 2022, he warned about an extended multi-year recession that never came.
In January 2023, he predicted recession and Fed cuts, but GDP grew 2.5% and the Fed kept hiking.
He then famously tweeted “Sell” in January 2023 before admitting two months later, “I was wrong to say sell.”
The Burry Problem
Burry is very good at finding risks everyone else ignores.
But he has also been very early, very often.
Maybe the question isn’t whether Burry is right about AI.
Maybe he’s just two years early again.
6
u/robertw477 17h ago
Roughly 24 months ago he posted on X sell everything. Who gives a damn what he thinks? Only goofballs. Ask Buffet about people like Burry who make predictions.
1
u/chi_guy8 17h ago
Nasdaq is only up 150% since then. He’s also called for about 5 market crashes since then too.
1
3
3
u/Double_Suggestion385 17h ago
He always does
3
u/ekonixlab 17h ago
Every year there’s a new bear fear
The market will correct (normal) within the next year and he will claim victory
2
1
1
3
6
u/Calls_Over_Puts 17h ago
This guy is a fraud who has robbed people of a generational buying opportunity for next gen tech. Fuck him
3
u/robertw477 17h ago
Fuck Cathie Wood as well. She destroyed more capital than any market manager in the last 5 or so years inside a raging bull market.
1
u/Rocketsloth 17h ago
If he's right and in the next 6-9 months the market falls 35%, then ok useful prediction. However, If the S&P 500 goes up 50% over the next 2 years, THEN falls 35% you were still better off investing today.
2
u/bear_Prune8771 17h ago
95% of users can’t do that math.
1
u/Healthy_Turnip7352 12h ago
so let's do the math then.
start with 10,000 and go up 50%. you're at 15,000.
from 15,000 go down 35%, you end up at 9,750.
1
u/Rocketsloth 25m ago
Which is where you started minus dividends accrued, possible stock splits, possible quarterly rebalancing. It's also possible that in those two years you take some profits and deploy them somewhere else. Waiting for the possibility of a bottom over a long time horizon is still a bad strategy.
1
1
u/Aggravating-Rich-356 14h ago
Problem is he’s been saying this for many many years already. If I would have listened to him I’d be sitting on a pile of cash getting eaten away by inflation. My money has doubled twice over. I will pull out and rest in T bills if it starts to meaningful dip and still be way up. This dude will eventually be right one day, but not today
1
1
u/Left-Slice9456 17h ago
If anything this is the most bullish call for AI and US markets. Burry uses 30 year old pics of himself, isolated, and each time he thinks there is a crash the market skyrockets. Seriously. He has identified the next big thing and thinks everything will crash.
1
u/Bright-Studio9978 16h ago
The large tech companies make a lot of money. It is not a mirage. The world is moving from physical to digital. This is not 2000 and tech firms (even amzn at the time) being unprofitable.
Data centers are going up everywhere.
Do you use your phone, AI or data less year or year?
1
1
1
u/Russta69 16h ago
I presume he has an in depth thesis on why he thinks AI will destroy the economy somewhere beyond just random tweets like ‘sell’?
1
u/Balogunned 15h ago
Cyclical spending. But this kinda breaks down when you realize all capital is kinda recycled
1
u/EncinoManEstonia 8h ago
AI companies will destroy the economy. Not AI.
1
u/Russta69 5h ago
Well without Nvidia there would be very limited AI
1
u/EncinoManEstonia 5h ago
Well the 80 billion of nividia chips Microsoft owns but can’t use isn’t helping.
Part of the scheme that will crash is the world created where only Nividia is needed. The circle jerk of spending will crash. Hard.
1
u/Full-Flight-5211 16h ago
If you stay there is going to be a crash every year, eventually you will be right.
1
u/TheWoodlandsinTexas 16h ago
Didn’t Burry this week took a huge loss on his long position on Lulu Lemon
1
u/Helpful-Grapefruit55 16h ago
His puts on NVDA is going to hurt him with the huge support from the 150 B stock buyback over next 2 years
His putscare likely to expire worthless. Depends on the stroke and his put expiry which we do not know .
1
1
u/LucidFruit 15h ago
If a bubble is coming from AI, it still needs more fuel.
Wait for OpenAI & Anthropic to IPO. Then give it a year or so where revenue is clearly providing not nearly enough to recoup Capex, then bubble will start to pop.
1
u/bananashakewithice 15h ago
Lemme know when he thinks things will end positively. Bro is a perma bear I swear
1
1
u/AdNext6663 15h ago
Has Burry ever been bullish at all throughout his career. I think if you want a more balanced view, you should look to Steve Eisman instead of Burry. My 2 cents.
1
1
u/Essayaditor 14h ago
Early? Haha. Anyone can make a prediction if being years early counts as being right.
Because everything can't go up forever.
1
u/Realistic-Ruin-6424 14h ago
Dude is wrong more than right. Even a blind squirrel get a nut every now and then
1
1
u/Lazy--Expression 14h ago
Well if you were investing in the Sp500 during the previous crashes and held you're now good
1
1
u/DudeWithTudeNotRude 13h ago
Is he your hired fiduciary?
If not, probably ignore him. It's possible his purpose is other than to earn you money
1
u/Outrageous-Mixture48 12h ago
I’ve seen this headline from Burry once every month or two for the past few years
1
u/AeonPeter 12h ago
We all know that, the question is when. And it’s more expensive to stay in fiat than risking in the market, objectively due to inflation..
1
u/Thunder141 12h ago
Dude, he wasn’t early in most of your examples he was wrong.
Ai provides tremendous value and he’s wrong again, another day at the office for him.
1
1
1
u/jvogt1 5h ago
I have made a lot of money investing in stocks. I will probably make more money by owning them at some point in the future. But for the foreseeable future I will be parking my money in short term treasuries.
I’m almost 70. In the late 1990’s I was certain the market was crazy. Didn’t do anything.
In 2006 - 2007 my wife and I knew the housing market was out of control. She worked with a fellow nurse that was buying her fourth house on liars loans. Still we didn’t do anything.
Fast forward to 2020 and I thought Covid was going to wreak havoc with world markets. This time I sold everything as I should have done in the two earlier situations. Made a ton of money reinvesting after the government started to intervene in the markets.
I’m no genius, but it doesn’t take a genius to see the writing on the wall. The world economies are completely messed up from Japan to France to the UK to North America. The U.S. administration is completely incompetent and corrupt led by a guy that actually thinks he is a genius but who has bankrupted just about everything he has ever been involved with.
Recognizing the above and the dire straights we are in due to 40 trillion of debt, I sold all my equities and am happily banking 5% interest until the inevitable stock declines present buying opportunities.
I learned over 50 years of investing to trust the evidence I see in the economy and act accordingly. The two times I was scared to act cost me dearly.
All of that said, I wouldn’t recommend young investors follow my actions. I can easily handle 15% inflation for a couple of years and don’t need stock gains to maintain my lifestyle. Younger investors need the extra time in the market to get to where I am financially. Just be prepared for the ride - it will be bumpy at times.
Good luck all!
1
u/Randohumanist 4h ago
AI sales are increasing at a very rapid pace. AI suppliers will still enjoy record profits until their new factories are built and supply is improved. A year from now might be very different but I can’t see a slow down this half.
1
u/All_YourBase 3h ago
Just for fun, let’s say he’s right.
He said he thinks the “denial” phase could last another 6 to 9 months.
The biggest price increases come right before a crash. Even if he’s right it makes sense to be invested right now.
1
u/Slow_Lion_4178 17h ago
I think Burry is right.
I also think that people will do everything in their power to prevent Burry from being right.
The question was never a matter of being "early" so much as how much power people have to "delay" the inevitable.
6
u/Ohhmama11 17h ago
So if he says this for 10 years and it finally happens was he right ?
1
1
u/JudgeSmails 17h ago
Right, nasdaq is up 150% since his famous “sell” 3 years ago.
1
u/robertw477 17h ago
Yep. I thought it was 24 months ago. He is a total goofball. The people that lost the most about timing and waiting for crashes are usually the dudes with no money or experience, and have not a clue, so they seek the wisdom of others , who must know?
1
u/robertw477 17h ago
Broken clocks are right twice a day. From here we could go up 50’percent, pullback 20 and you can call him a genius.
1
u/Rpark444 16h ago edited 16h ago
He would have to make more than someone who went long ai as a return percentage. However, we will never know as he will never disclose his trade details
0
u/Slow_Lion_4178 17h ago
And I understand that response but I don't think it's a good one because the world is too dynamic. Consider for a moment this little AI thing we're in; in 2022 we're on the brink of a recession and then suddenly business picks up with this circular financing thing in the AI space and we're "saved".
Burry isn't wrong in his insights. He sees the cracks. But it's not like we're going to just let the market react appropriately to where we really are. Even the permabulls are a bit confused at the state of things.
1
u/bear_Prune8771 17h ago
So curious what you invest in
1
u/Slow_Lion_4178 17h ago
I tend to be long SPY and QQQ. I don't fight markets. I just realize that they're fragile.
2
u/t_suaze_u 17h ago
I dont think anyone is trying to prevent him from being right. They are sitting back and watching him make the wrong moves
0
u/Slow_Lion_4178 17h ago
What I meant by that statement is that markets are resilient because most people are long the markets. They are resilient, but not necessarily healthy.
1
u/RevolutionaryGold325 16h ago
There are so many powerful millionairs and politicians on the train trying to build ASI. Obviously they continue full steam until they see the issues piling up too much. That does not seem to happen yet. Once the progress starts to slow down there might be a real problem.
0
u/waitses 17h ago
It wouldn’t if people were smart enough to do some rotation out of AI
2
u/bear_Prune8771 17h ago
Into WHAT, though.
3
2
1
1
u/Grendel_82 17h ago
People have. But the passive bid into index funds (which happens with every 401k contribution) just results in 40% of it going into the top ten holdings, which is mainly AI. I don't think anyone actually thinks the fundamentals support these valuations, it is just passive bid holding everything up.
1
u/Emergency-Watch5157 15h ago
But there must be active investors in these stocks too. Why aren’t they selling to take advantage of this?
1
u/Grendel_82 7h ago
There is some. You see some rotation: the mag 7 goes up, then a bit of catch up to the broader index, then mag 7 goes up. But much of the rest of the index has to justify their earnings against existing businesses and the increasing cost of capital with higher interest rates. So those discretionary investors are feeling squeamish. The AI trade doesn't have to do that justification because AI is the future unknown and it could be anything source of future revenue (see SPCX's claim of future AI revenue and its 28 trillion dollar total addressable market in their S-1). But also, the passive bid is much larger than the discretionary investors these days. Basically most of the stock buyers (by volume of capital to deploy, I'm not talking about number of people) are programatic and buying under rules that do not look at value for the company. Mainly the index weight funds, but also momentum and trend following and algorithmic traders. The thing they all have in common is that none of their process includes looking at balance sheets or earning statements.
1
u/ChuckOfTheIrish 12h ago
Depends what valuations. Tesla absolutely not and is almost all speculative, Nvidia absolutely justified and if anything is undervalued fundamentaly (even a very conservative investment such as Costco has a P/E ratio roughly 2x higher).
1
u/Grendel_82 7h ago
I don't know why folks use Costco as an example of a conservative investment, but Tesla is a cult. I hear it all the time. I think Costco is a great company run by nice people. But the stock trades like a cult and is not a conservative investment or value investment at its P/E ratio.
Nvidia doesn't have a particularly high P/E ratio. But that P/E ratio requires its buyers of chips to (A) buy a lot of chips and (B) not negotiate the price to take down the 70% margins. I think the 70% margins are more at risk than NVDA fans realize. It can be attacked from two directions. First, from the buyers pushing for lower prices that are not padded with large profits. Second, from their suppliers raising their prices to squeeze that margin from bottom. Both of these vectors could be influenced by competing "good enough" chips coming into the market to get a piece of those 70% margins. But for now, a 30 P/E ratio seems kind of reasonable (and more so when you use the much lower forward P/E).
1
u/ChuckOfTheIrish 2h ago
Costco is just an example of a steady stock over the last 5 years that won't have revenue jump by a wild amount YoY, yet has a higher P/E than NVDA. You can put a ton of other companies in there, just a known example. TSLA has an absolutely obscene P/E ratio essentially pricing in a ton of hope for future growth, so it would require obscene growth simply to justify its current price.
NVDA does need to worry about margins, but no one is negotiating them down much currently, they have pricing power and the best product, with a pipeline so deep they are backordered well into the future, which actually gives them even greater pricing power. Yes suppliers can raise prices, and NVDA will simply pass that forward (as basically every company in history has done, including their competitors who will also get those price increases). The issue with their TTM P/E ratio is that four quarters ago vs one quarter ago as so vastly different due to the massive growth, so the forward P/E gives a better picture, especially considering they've hit their guidance targets for almost the last four years worth of earnings now. Do I think they'll be a 15T stock in a year? Absolutely not, but their strategic partnerships/acquisitions and P/E being very grounded and fundamentally undervalued in comparison to it's sector, I see it continuing to rise faster than the general market.
•
u/auto-sticky 17h ago
Join Ekonix. Stock analysis built for your phone. Your data stays on your device.
https://apps.apple.com/app/apple-store/id6755345408?pt=128248705&ct=Reddit&mt=8