Michael Burry issued dire warnings, took short positions, and pounced on bargains in 2023
Michael Burry, the investor famous for predicting and profiting from the mid-2000s housing bubble, had an eventful year in 2023.
He made bleak forecasts for the stock market and economy, placed bets against the S&P 500 and microchip stocks, and took advantage of buying opportunities during the regional-banking crisis.
Burry began the year with a series of grim predictions, stating that inflation would peak and the US would enter a recession. He was partially correct, as inflation did drop by the second half of the year, but a recession has not materialized thus far. Burry also warned of a potential market crash and advised investors to sell. He later backtracked on this advice, but continued to express concerns about the speculative bubble in the market.
During the regional-banking crisis in March, Burry compared the mistakes made by banks to those made during the dot-com and housing bubbles. However, he correctly predicted that the chaos would not pose a serious threat to the wider economy. He took advantage of the market jitters and purchased shares of beaten-down banks and other undervalued stocks.
On the short side, Burry made two notable moves in 2023. He purchased bearish put options on two ETFs that tracked the S&P 500 and Nasdaq-100, representing bets worth $1.6 billion against those indices. In the third quarter, he bought put options on an ETF that tracks semiconductor stocks, including Nvidia. However, it appears that neither of these bets paid off, as the stock indices continued to rise.
Burry has been relatively quiet since April and has not made any recent posts on X. His followers are hoping he will resume commenting on markets and the economy in the new year, given the current uncertain outlook for investors.
Overall, Michael Burry had a year filled with dire warnings, short positions, and bargain hunting. While some of his predictions and bets did not play out as expected, his influence and track record continue to make him a notable figure in the investment world.
Analyst comment
Neutral news.
As an analyst, the market is likely to be influenced by the uncertain outlook for investors. Burry’s track record and influence may continue to be notable factors, but his predictions and bets not playing out as expected may also temper market reactions.
