Michael Burry stepped into the spotlight in the 2000s when he famously predicted and profited from the 2008 housing market collapse. The Scion Capital founder was immortalized in Michael Lewis’ book and film adaptation “The Big Short” as one of the few investors to foresee the subprime mortgage crisis.
Burry’s prescient call earned him guru status as an economic soothsayer with an uncanny ability to spot bubbles before they burst. However, since his legendary housing market bet, Burry’s subsequent market predictions have proven less than prophetic.
In a recent viral Twitter thread, seasoned trader Adam Khoo thoroughly dissected Burry’s forecasts over the past decade to reveal a spotty track record. While Burry continues making dire market warnings, his doomsday predictions have repeatedly failed to materialize. This raises the question – was Burry’s housing bubble call a lucky shot, or has the Oracle of Oakland lost his golden touch?
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Show more +- 2005: Predicted the collapse of the subprime mortgage market. Result? The housing market did crash in 2008, leading to the Global Financial Crisis.
- December 2015: Predicted a stock market crash within a few months. Result? The S&P 500 Index (SPX) rose by 11% over the next 12 months.
- May 2017: Predicted a global financial meltdown. Result? The SPX surged by 19% over the next year.
- September 2019: Warned of a stock market crash due to a bubble in index ETFs. Result? The SPX increased by 15% in the following 12 months.
- March 2020: Revealed a massive bearish bet. Result? The SPX skyrocketed by 72% over the next year.
- February 2021: Predicted a stock market crash due to a speculative bubble and shorted Tesla. Result? The SPX went up by 16% in the next 12 months.
- September 2022: Warned of more stock market failures, claiming the bottom had not been reached. Result? The SPX rose by 21% in the following 11 months.
- January 2023: Predicted a recession and a new round of inflation, advising to “SELL”. Result? The SPX increased by 17% year to date.
- August 2023: Revealed short positions on the SPY and QQQ.
While Burry deserves respect for his shrewd reading of the pre-2008 economy, his inconsistent track record since raises doubts. Decade after decade, perma-bears forecast impending market crashes, yet the bulls have consistently had the last laugh. Burry’s persistent warnings have made him the poster child of this pessimistic camp.
However, predicting doomsday is the easy part – accurately timing the market is far harder, if not impossible. Burry may one day be vindicated if another crash materializes. But until then, the Scion Capital founder seems destined to be remembered more for his memorable Hollywood depiction than his middling forecasting ability. The Big Short was an exception rather than the rule – Burry has yet to prove he can consistently spot and time market inflection points.
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