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Michael Burry, the Big Short investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash.

Burry’s fund, Scion Asset Management, bought $866 million in put options (that’s the right to sell an asset at a particular price) against a fund that tracks the S&P 500 and $739 million in put options against a fund that tracks the Nasdaq 100.

Burry is using more than 90% of his portfolio to bet on a market crash. This should make everyone with stock on Wall Street a little nervous. But he might be wrong.

In January, he tweeted a cryptic message to his 1.4 million followers. “Sell,” he wrote. But by the end of March, he backtracked. “I was wrong to say sell.” he wrote.

In the mid-2000s, Burry was famous for placing a wager against the housing market and profited handsomely from the subprime lending crisis and the collapse of numerous major financial entities in 2008. The drama was chronicled by Michael Lewis in his bestseller “The Big Short: Inside the Doomsday Machine” and later adapted into a film where Burry was played by Christian Bale.

Perhaps more interesting, Burry and his team have made some big ‘bets’ lately, especially in the travel and healthcare industry. The investor has also made significant investments in Warner Bros Discovery Inc, and in online second-hand retailer, The RealReal.

Read into this what you will. Maybe the guy thinks everyone will only be able to afford second-hand clothes pretty soon, and the downfall of the US will be televised.

Burry does have a good investment record and traders following the investments by his Scion Group have over the last 3 years made annualized returns of 56%.

Down here in South Africa, we have our issues with rising costs and inflation outpacing incomes, especially for the disappearing middle class. But if Burry’s next ‘vision’ does indeed come to pass, we will feel the hurt along with the Americans.

News like this always brings me one step closer to just saying “f*ck it”, and moving to a homestead. Who knows what 2024 will bring us, but we’re likely going to need extra clean underwear.

[source:cnn]