Michael Burry played by Christian Bale

Summary List Placement
Michael Burry sounded the alarm on the stock market this weekend.
“The Big Short” investor said extreme speculation and debt could cause a crash.
Burry’s warnings are being ignored as they were during the housing bubble, he said.

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Rampant speculation and widespread betting with borrowed money has driven the stock market to the brink of collapse, Michael Burry warned over the weekend.

“Speculative stock #bubbles ultimately see the gamblers take on too much debt,” the investor tweeted, along with a chart showing the S&P 500 index and levels of margin debt both soaring in recent months. “The market is dancing on a knife’s edge.”

Burry said the flow of cash from actively managed funds to index trackers, and the boom in day traders sharing tips on social media and touting meme stocks, have helped to fuel the market upswing.

“Passive investing’s IQ drain, and #stonksgroup hype, add to the danger,” he said.

The Scion Asset Management chief highlighted a “massive spike” in the volume of bullish call options being traded in another tweet. He added the hashtags “#cautiontothewind” and “#blowofftop” to emphasize his view that those types of wagers are propelling stocks to extreme levels.

Burry …read more

Source:: Businessinsider – Finance


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