Mega investor Michael Berry, made famous by the movie “The Great Short”, warns that the markets are behaving irrationally once again.
In particular, in the wake of Wall Street’s recent mini-rally, with gains of 8.6% for the S&P 500 over the last period, the fund manager speaks of “nonsense” that has returned.
“After 1929, after 1968, after 2000, after 2008, the chain of nonsense that turned ‘bulls’ into bubbles has completely and profoundly disappeared. But this familiar nonsense of the COVID era is not dead yet,” wrote Michael Berry in a post that he later deleted, as he almost always does on his account with the twitter handle “Cassandra BC”
According to him, the era is “like 2001 before Enron, before 9/11, before (his scandal) WorldCom”, as he concluded in his post.
Michael Berry has become known as the man who predicted the global financial crisis of 2008, as depicted in Michael Lewis’s book The Great Shorting, which was later made into a blockbuster movie.
Known ever since as a prophet of bad news, Michael Berry had shorted the then-mighty US mortgage market as a bubble.
Continuing in the same vein, looking for overvalued assets last year he drew attention by repeatedly shorting Elon Musk’s Tesla stock for more than half a billion dollars, while also placing big bets on Cathy Wood’s famous tech ETF Ark Innovation.
The recent period argues that the spike in asset prices of the pandemic era will end in a historic crash.