Burry: The Coming Stock Market Crash Explained (2022)

Michael Burry is one of the most successful investors in the world, and his hedge fund Scion Asset Management is currently taking positions to prepare for a market crash. And with the stock market near at an all-time high leading in to 2022 - this begs the question, "Is the stock market going to crash in 2022?".

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Burry has shown an exceptional ability to predict when the stock market is going to crash. He did it in 2000 with the dot com bubble and in 2008 with the subprime mortgage crisis. This has led many online to start following his investment advice for their own portfolios. And recently Burry has begun forecasting crashes in many popular assets from Bitcoin to Robinhood Stocks to Saas stocks to meme stocks to Cathie Wood's ARKK Invest fund.

With record high PE ratios, a damaged economy, and a seemingly unending bull market, it definitely feels like we are overdue for a correction. In this video I explain some potential indicators for a market crash, including average P/E Ratios, inverted yield curves, and public sentiment. I also talk about how I am handling the potential stock crash with my own investments.

Historically P/E Ratios for publicly traded companies sit between 13 and 15. Currently, the market as a whole has a P/E ratio of over 37.5 when calculated using TTM Earnings. In this video I discuss what this may mean for the price of the market going forward. Public sentiment seems to be divided at this point on whether or not the market will continue to rise, but this may be a misleading indicator of actual market performance.

My long term strategy for the stock market is to buy and hold, so this greatly influences how I respond to a market that is potentially overvalued. By keeping a long term growth mindset, it makes it easier to withstand short term fluctuations in the stock market, even ones large enough to be considered a "crash". I also believe this is the best approach for new investors wondering what to do in times of market uncertainty.

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I am not a financial or investment advisor. Everything in this video is for entertainment purposes only. Links above include affiliate commission or referrals, and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.

[FinTek]

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[Uh-huh-uh-huh]

Today is May 21, 2022. I just watched 7:10 a few times, over and over again. -- Numbing -- I saw this video last December and felt the same way as you. Well nobody feels that way anymore.

[satishshinde]

The time to sell is when everyone starts talking and advicing about the stock market.😂

[otakulangs]

Let's not forget that he was way early on his housing short and also way early on his Tesla short which he finally closed and lost money on . "Burry predicted Tesla stock would collapse like the housing bubble, saying that "my last Big Short got bigger and Bigger and BIGGER" and taunted Tesla bulls to 'enjoy it while it lasts.' In May 2021, it was reported that he held puts on over 800, 000 shares of Tesla. In October 2021, after a 100% rise in Tesla's stock value, he revealed he was no longer shorting it."

[hamoodal-hajri]

Watching this vid 2 months later and realizing Burry nailed it again !

[crsdecoder]

10:20 - Well... 2 months later we can all see that Michael was actually right on those also :)

[nickybutt]

The same dude who said it was going to crash in 2021? Even if it does crash in 2022, saying it will every year doesn't make him sort of genius, he's just eventually right like a broken clock

[jaybrown]

I was hoping for quality content. Unfortunately you committed a grave error, You failed to take three things into account:

1) CEOs are incentivized to increase stock prices
2) The U.S. Fed shoveled money into companies' coffers
3) Because of item 1, CEOs are incentivized to reinvest money into stock buybacks not their companies

These three truths explain why the current stock market is and has been very overvalued.

[paraschivbogdan]

this guy predicted 12 of the last 2 crashes

[ShahrouzTaranejoo]

The important thing is “ Market is not at all time high, some big companies AAPL that are making Qqq and Spy “ are at all time high ! Growth stocks crashed by more than 50-80% . Airlines are in the most horrible price

[TotallySearch]

I don't even invest into stock markets due to my bad luck but I still watch these videos lol

[JK-ksxq]

He's just early....like always. Look at all of his moves. He's right, but he's just ahead of or early of the occurrence.

[jackmehoff]

"The market can remain irrational longer than you can remain solvent." That is

[BrianMDPhD]

Wow, the fact that this video is now 4 weeks old and some of us have had our portfolios cut in half in the Nasdaq correction. 😭

[DwNhiLL]

You missed to look on the fact that for the past year the U.S. has printed between 70-80% of ALL dollars circulating in the economy i.e. inflation. Furthermore the gas, electricity and other oil prices have skyrocketed both in EU and in the U.S. which inevitably contributed to even more inflation therefore increased prices of everything. Finally in march/april the US federal reserve will raise interest rates and cut bonds which also wasn’t mentioned in the video.

[dom]

it would seem that your decision to keep your stocks didn't age very well

[blu]

Shiller PE is at 40 which means stock prices are 40 times of company earnings and that is the second all time high after the dot com bubble.
Buffett indicator is 200%+ which means stock valuation is more than 200% of GDP that's another All Time High

[francescomonini]

Rationalization at its finest. But despite that, you may be right, as most of investors are likeminded and altogether self-realize their profecy (stay invested in any case).

[AmerPridexxx]

Companies produce goods and services. If there is a decrease in production, if there is a decrease in disposable income... What happens to those companies stock values? (rhetorical question).

[Jakeofalltrades]

Best video I’ve seen yet on this topic! Straight to the point and no BS!! Great work!