"He attached a column chart tracking the S&P 500's total capital expenditures over the past 35 years, with depreciation subtracted and amounts divided by nominal US GDP - likely to keep the focus on new investments and show them as a share of the economy's total output. Burry's chart shows that stocks have peaked in the middle of past investment booms, while capital spending has kept climbing or remained elevated for another year or two before collapsing."
"The chart highlights the Nasdaq index's peak just before the dot-com bubble burst, the S&P 500's peak just before the housing bubble popped and sparked a global financial crisis, and the S&P Energy index's peak just before oil prices crashed and the energy sector entered a prolonged downturn. Burry also highlights the Nasdaq 100's record high of around 26,000 points this quarter, suggesting he thinks that could be the market's peak in the middle of this capital cycle."
A chart compares S&P 500 total capital expenditures (minus depreciation) divided by nominal US GDP over 35 years to stock market peaks. The chart shows stocks frequently peaked in the middle of past investment booms while capital spending continued rising or stayed elevated for another year or two before collapsing. Historical examples include the Nasdaq peaking before the dot-com crash, the S&P 500 peaking before the housing bubble burst, and the S&P Energy index peaking before an oil-price collapse. The chart signals that current AI-related trillion-dollar investments could prolong capex even if stock indexes have already topped.
Read at Business Insider
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