Michael Burry, the well-known investor who accurately forecasted the collapse of the property market in 2008 is in the news once more. On this occasion, he is staking a substantial wager on a stock market Crash by the close of 2023.
The Big Short Investor’s Bearish Wager
The Bet:
According to reports Burry who starred as Christian Bale in the film The Big Short, has bet more than $1.6 billion on this outcome.
Burry’s hedge fund, Scion Asset Management, has taken out negative options on two key indices that represent the US economy:
- S&P 500: He bought $866 million in put options against a fund tracking this index.
- Nasdaq 100: He purchased $739 million in put options against a fund tracking this tech-heavy index.
The right to sell an asset at a specified price is granted via put options. Given that the Nasdaq 100 has increased 38% and the S&P 500 has increased 16% so far this year, Burry’s negative outlook is noteworthy.
Michael Burry Past Performance:
During the global recession, Burry made a lot of money by betting against the housing market, which made him famous in the mid-2000s. Still, he is not perfect. He tweeted “Sell” to his followers earlier this year, but on March 1st, he said, “I was wrong to say sell.”
Sentiment on the market:
Talks concerning the state of the market and its dangers have been triggered by Burry’s activities. It’s critical for investors to be educated and to think about diversifying their holdings. Although Burry’s forecasts are significant keep in mind that investing is always fraught with risk and uncertainty.
Attention has been drawn to Michael Burry’s most recent wager on a stock market meltdown. Whether he’s correct or not, it serves as a reminder that markets may be erratic. Pay attention to changes and make wise choices according to your risk tolerance and financial objectives.
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