Since accurately predicting the 2008 financial crisis, Michael Burry, famous for the ‘Big Short,’ continues to attract interest with his take on financial matters. Indeed, one of his notable outlooks emerged in late January 2023.
Specifically, on January 31, 2023, Burry shared an ominous message through an X post, urging investors to ‘sell,’ an element that prompted many to brace for a possible market downturn.
However, as of October 2024, the markets have taken a surprising turn. Despite Burry’s warning, the S&P 500 has defied expectations, rising approximately 41% since that infamous post.
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At the time of the post, the markets were dominated by sustained fears of a possible recession, with skyrocketing inflation driving uncertainty. To Burry’s credit, the market plunged about 10% after 45 days.
Why S&P 500 has rallied in 2024
Fast-forward to 2024, and the stock market has rallied, with inflation cooling amid a push by the Federal Reserve to bring the rate below 2%. Notably, the stock market surged after the Fed implemented a 50 basis point rate cut, with anticipation of more reductions.
Currently, the index is showing momentum for growth, with several analysts noting that it could target a high of 6,000 by the end of 2024. The index has mainly been dominated by technology companies, particularly those that ventured into artificial intelligence (AI). The latest data indicate that about 70% of the total stocks on the benchmark are outperforming the S&P 500.
However, concerns remain regarding the economy’s overall health. Different quarters warn that the current growth could be a precursor to an upcoming market crash, and fears of a recession still loom.
Burry’s portfolio performance
Meanwhile, Burry continues to see notable movements in his portfolio after making several adjustments. For instance, his bets on key Chinese stocks have earned him high rewards after the country’s stock market rallied after the government introduced a stimulus package to rescue the economy.
To this end, Burry’s stake in JD.com (NASDAQ: JD) surged by as much as 65.76% in three months as of October 1. The investor has also seen notable returns in his investment in e-commerce giant Alibaba (NYSE: BABA).
In general, Burry’s portfolio remains green. Data shared by Quiver Quant on October 5 indicates that his overall portfolio is up over 21% in the past month, with Chinese stocks accounting for most of the gains.
At the moment, Burry’s call may be premature. Investors need to remain cautious, considering the market continues to be affected by several elements, such as geopolitical tension and the Fed’s monetary policy.
