Thursday, July 7

Michael Burry should have retired after’The Big Short’ and should stop tweeting alarming market-crash warnings, finance professor Aswath Damodaran says

  • NYU’s Aswath Damodaran said Michael Burry should “stop talking” and avoid tweeting bearish forecasts.
  • The professor said Burry should have retired after successfully predicting the 2008 housing crash.
  • Damodaran said there are people who think deeply about markets, but Burry “is not one of them.”
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Dr. Michael Burry should have retired after successfully betting against the US housing market in the mid-2000’s and being the center of the book and movie “The Big Short,” Aswath Damodaran said.

In an interview with Moneycontrol published last week, the NYU Stern School of Business professor slammed Michael Burry and his notoriously alarmist forecasts. He said there are people who think deeply about markets, but Burry “is not one of them.”

Burry has issued several bearish market forecasts over the years, and most recently tweeted that the market is in the “greatest speculative bubble of all time.”

But Damodaran suggested investors have given Burry more respect than he deserves, and history doesn’t guarantee the future.

“Could markets be in a bubble? Absolutely,” Damodaran said. “It could be true at any point in time. And looking in the past and saying this looks just like 2008, or just like 2000 is exactly how we get into trouble. Market crises never resemble each other.”

He continued: “So I’m afraid that on this one I’ve got to look at Michael Burry and say just stop talking. I mean, it’s a no, and tweeting just makes it worse.”

Burry isn’t the only market participant sounding the alarm on speculative excess in the stock market. British investor Jeremy Grantham said the market was in a “fully fledged epic bubble” in January, while Stanley Druckenmiller-who runs Duquesne Family Office-said that all assets are in a “raging mania,” but cautioned he doesn’t “have a clue when that’s going to end.”