‘Big short’ investor Michael Berry explains how the current market is different from the dot-com bubble burst: ‘The only way to trample each other’

Legendary Investor michael bury, who famously bet against the housing market during the 2008 financial crisis, is known to be skeptical of passive investing. in early October, “The Big Short” Investor Said that passive investing has risen steadily over the past decade and that the only way out of the “crowded theatre” is by “trampling each other”.

“The difference between now and 2000 is the dormant investment bubble that has grown steadily over the past decade. All theaters are overcrowded and anyone can trample each other out. And still the door is only so big,” Barry said his tweet.

Screenshot from Michael Berry’s Twitter handle

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In 2019, Barry Told Bloomberg said a bubble in passive investing has orphaned smaller value-type securities globally, through exchange-traded funds and index funds, as well as a tendency to oversize among asset managers.

famous investors like peter lynch it’s also criticized Passive Investing, according to a Bloomberg report, calls this shift a “mistake”.

Price Action: Stock market sees downside after aggressive rate hike by US in 2022 federal ReserveETFs have done poorly this year. Vanguard Total Stock Market ETF VTI has lost over 26% since the beginning of the year, while SPDR S&P 500 ETF Trust Detective There has been a loss of more than 25% in the same period.

Barry previously tweeted how current market conditions reminded him of the mid-to-late 2000s.

“Another feeling I’m getting is the mid-to-late 2000s. Free cash flow entirely on sales and overlooked, while stocks with prior momentum are down, but not far off, and the beloved ‘better business’ still has a ways to go to fall. The value was going to increase for years despite more mishaps along the way,” Bury said in his tweet.

This story was originally published on October 3, 2022.

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