I discuss Michael Burry’s final stock market warnings in 2022. I personally find Michael Burry’s ephemeral knowledge drops on Twitter to be helpful because I like being prepared for what could happen in the stock market.
-Michael Burry’s Warnings: Helpful Or Annoying?
-Scion Asset Management Q2 2022 13F Stocks
-Michael Burry’s Predictions Are Early
-Inflation, The Fed, Recession Looming
-Doomed Rallies In The Stock Market
-Michael Burry’s Final Warning For Stocks
Famous from the Big Short book and movie, Michael Burry’s predictions are either perpetually early like a broken clock or they could just be plain wrong, so we may need to take some of his posts with a grain of salt and other times heed them carefully.
The latest 13F filing for Michael’s Scion Asset Management in Q2 2022 reveals how bearish Michael Burry is feeling where he sold 11 equities and bought only one stock.
This single stock that Burry bought is about 500,000 shares of GEO Group (ticker GEO) in which he only invested $3.3 million. This amount represents about 1% of his $292 million of assets under management so who knows if Burry is doing options trading or other activities with 99% of the cash?
The fact that Michael Burry is barely invested right now tells me he is getting ready for the “big one.” Maybe.
Buyer beware if you follow Burry into and out of stocks and trades because he has bought and sold GEO for many quarters. It’s important to really understand the investment case behind any stock before you were to invest in the same stock a superinvestor owns.
If you go back through Burry’s tweets on the Burry Archive on Twitter, you start to sense some patterns.
Burry wrote about how The Fed has no intention of fighting inflation, and inflation will have the last laugh as it only needs to peak once.
He also remarks about how there have been many bear market rallies, so he scoffs at the idea that the Nasdaq has recently entered into a new bull market. Invest at your own peril, in other words.
This is because Burry’s tweets seem to suggest that the stock market hasn’t bottomed yet, and there will probably be a good amount of consumer suffering before the market capitulates.
Due to rampant inflation, Americans’ real wages are down and consumers are depleting their savings rapidly. He’s expecting we’ll have a “consumer recession and more earnings trouble” ahead between September through December 2022.
Burry has observed that the current earnings season had a “last hurrah” kind of feeling to them as first there was multiple compression and then there will be earnings compression.
When people panic sell stocks, that’s like people rushing out of a burning theater as he tweeted “the theater took more than a decade to overstuff. Not likely everyone gets out in less than a year.”
The current “silliness” in stocks may not be over until people are really discouraged in stocks and crypto.
In Michael Burry’s final warnings, he seems to think that the markets may not bottom until the S&P 500 hits 1862. It’ll be a while before we possibly reach down to that level.
What do you think? Let me know in the comments!
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