There have been many seers in the history of the stock market, from Roger Babson who called the 1929 crash to Elaine Garzarelli who predicted 1987’s Black Monday. This generation’s fortune-teller has been Michael Burry, who called the 2007-2008 housing bubble burst early on. But since then, he’s made several dire forecasts that haven’t panned out, contends an article in The Wall Street Journal.
Despite his on-record statements such as “[this] could be worse than 2008” over the past four years, investors would’ve done better buying the S&P 500 each time than following his advice. Earlier this year, Burry tweeted a single word—“SELL”—a directive that was a complete misfire given the tech rally that was about to happen. Still, Burry and his investment firm, Scion Asset Management, get plenty of attention; according to Factiva data that is cited in the article, print-media mentions of Burry numbered 264—an undeserved spotlight given his recent track record of being wrong on many accounts, the article maintains.
Unlike a lot of pundits, Burry risked his own money on his 2007 housing call and other stock picks that delivered high rewards. His firm Scion bought puts on two popular index funds, betting on a looming downturn. And indeed, higher interest rates and record-high stock valuations contributed to the market’s downfall in 1929, 1973, 1987, and 2007, so it’s certainly possible that Burry’s convictions that a decline is coming aren’t wrong this time. And if timed just right, it could result in the same kind of riches that Burry—who did not respond to The Journal’s requests for comment—reaped a decade and a half ago.
