Michael Burry, an American investor known for predicting the 2008 mortgage crisis, compared the current state of financial markets to the dot-com bubble and pre-Great Depression speculative frenzy.
In a series of tweets cited by BusinessInsider which were erased, the hedge fund manager Scion Asset Management posted screenshot of an old stock chart from Financialweb.com, a defunct company that, along with many other web services, saw its stock value plummet during the crisis at the start of this millennium.
“A very common graphic at the time. Sounds vaguely familiar, ”the $ 100 million employee wrote. generated over 700 million in profits for its clients during the 2008 subprime crisis.
The investment manager also compared the bull market of the 15 years leading up to 2000 with the growth of the markets over the past three decades. Thus, a 94% similarity in the behavior of the index stands out Nasdaq 100 in both periods, and 95% in that of S&P 500.
The expert drew a parallel between the growing number of people trading in “meme” options, such as those from AMC Entertainment, and the massive speculation that preceded the 1929 Wall Street crash. He cited statistician Leroy Peavey, who in November of the same year blamed a wave of leveraged speculation which involved “elevators, typists and even school children”.
AMC Entertainment, GameStop and other companies have seen their value inflate dozens of times this year, with their shares being the subject of a purchase coordinated by a collective of retail investors on a Reddit sub-forum. These stock market manipulations caused billions of dollars in losses to various hedge funds.
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