Market speculation has reached its peak in a century and asset valuations have become more exaggerated today than they were during the dot-com bubble, Michael Burry warned in a tweet Thursday.
- Michael Burry said that speculation has reached a new high and that valuations have exceeded those of dot-com.
- Rivian was the startup that “The Big Short” investors pointed out, which is worth more than $100 billion.
- Burry pointed out that real wages in the US have fallen this year and that inflation is a major problem for the poor.
- He said that there was more speculation than in the 1920s, referring to years preceding the Great Crash of 1929. “More overvaluation that the 1990s.”
The investor behind “The Big Short” fame highlighted a Wall Street Journal article about Rivian, a startup that makes electric-vehicle startups. It has made only 156 vehicles so far and generates very little revenue. It has a market capitalization above $100 billion since it went public this week.
Burry also noted in a Thursday tweet that US wage growth is slower than inflation this year and stressed that price rises disproportionately impact the poor.
He stated that American real wages, adjusted for inflation, have fallen 2.2% since January 1. This seems to be the only meaningful thing that has fallen in this mad, crazy year. Inflation is a very regressive tax. Never forget it.”
Scion Asset Management’s boss is focusing on electric-vehicle firms and inflation this week. He tweeted Elon Musk, Tesla CEO, that he might be selling stock in order to pay his personal debts. also raised the possibility that the stock of the automaker could plummet 90%.
He also noted that October’s month-on-month inflation reached a 13 year high mainly due to rising energy prices and other factors not related to the US economy’s reopening following the pandemic.
Burry is most well-known for calling the mid-2000s housing bubble, and then betting on its fall. For months, he has been warning casual investors to avoid gambling on meme stocks, cryptocurrency, and other risky assets.
He tweeted that “all hype/speculation does is draw in retail before the Mother of all crashes.” “When crypto drops from trillions or meme stocks from tens to billions, #MainStreet loss will be comparable to the size of countries.”
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