"It turns out I'm not the only one, with high-profile hedge fund manager Michael Burry of The Big Short fame signaling he thinks this company could be among the most easy-to-spot short opportunities he's seen in a very long time. Coming from an investor who saw the subprime mortgage crisis before almost anyone else, that's an incredible statement. And when he made that statement, the market immediately took notice."
"One of his recent areas of focus has been the concentration of wealth among households, and specifically the percentage of household wealth held within home equity versus the stock market. When stocks make up a large percentage of household wealth than housing (as has happened only two times in history, once in the late-1960s and then again in the late-1990s, long duration recessions took place."
"We've seen this metric unfold in recent years, once during the pandemic and then again in 2025. While the pandemic did not lead to a prolonged recession due to the impact the Federal Reserve and the U.S. government under former president Joe Biden had on issuing a tremendous amount of monetary and fiscal stimulus, it's his view that this time, we're about to see a big one."
Michael Burry flags Palantir and other high-flying growth stocks as potential short opportunities because valuations appear untenable. He warns about household wealth concentration shifting from home equity to stocks as a critical risk factor. Historically, when stocks made up a larger share of household wealth than housing—in the late 1960s and late 1990s—long duration recessions followed. That wealth-shift metric rose during the pandemic and again in 2025. The pandemic avoided a prolonged recession largely because of substantial Federal Reserve and U.S. government monetary and fiscal stimulus. Without similar intervention, Burry views current conditions as likely to precipitate a significant recession.
Read at 24/7 Wall St.
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