Michael Burry just posted his 2023 forecast. He expects that inflation has peaked, we’ll see a recession in 2023, and then inflation picks up again in 2024! Why and how can investors positions themselves for this tough investment environment?
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As the economic outlook for the United States continues to evolve, one of the most influential investors in the world, Michael Burry, has recently made a bold prediction for the year 2023. According to Burry, the US will experience a recession and an increase in inflation.
In a recent interview, Burry discussed his views on the current economic landscape. He believes that the US economy is currently in a “bubble” and that a recession is inevitable. He also believes that inflation will rise due to the Federal Reserve’s quantitative easing policies, which are designed to stimulate the economy by increasing the money supply.
Burry believes that the US economy will experience a recession in 2023 due to the current economic environment. He believes that the economic stimulus measures taken by the government and the Federal Reserve are not sustainable and that the US economy will eventually reach a tipping point. He believes that the recession will be caused by a combination of factors, including rising debt levels, high unemployment, and a decrease in consumer spending.
In addition to a recession, Burry also believes that inflation will rise significantly in 2023. He believes that the quantitative easing policies of the Federal Reserve will lead to an increase in the money supply, which will result in higher prices for goods and services. He believes that this increase in prices will have a negative effect on the economy, as it will lead to a decrease in consumer spending.
Overall, Michael Burry’s 2023 forecast is a bleak one. He believes that the US economy is headed for a recession and an increase in inflation. While this may be a difficult time for the US economy, it is important to remember that recessions are cyclical and that the US economy will eventually recover. It is also important to remember that the Federal Reserve’s quantitative easing policies are designed to stimulate the economy and that these policies should be carefully monitored to ensure that they are having the desired effect.
Wonderful insights. Curious to see what company you're talking about. Also love that the predictions you made during the frenzy two years ago actually came true. Glad i followed your advice during those times. If your portfolio is bleeding, you really should subscribe, Daniel protects you from your inner greedy beast and he genuinely helps you by keeping your feet on the ground.
So gold gonna get rekt?
I love the sound effects.
that is another miss for Burry. Inflation will not get to negative this year without some black swan event, this is not 1923, we have global markets now that can't move that fast in one direction to another just because the FED raised the interest rates for a year.
the silence of 95% walking in a line and they don't care where it goes anymore. not waking up.
Thanks!
Can you do a video on Altria
I love them Michael Burry analysis videos ❤
Daniel, wondering if you could do a video looking at Tech as a whole within this context. All-In podcast mentioned that the new Chat AI is set to be integrated into Microsoft's services, challenging Google's biz model at a fundamental level (have not fact checked this yet). Evidence also raises questions about the future of Apple and Tesla (of the view Tesla is ultimately a software company) and growth prospects. Wondering if you've access to any models prepared to speak to how tech (and its various subsets) might surf the road ahead?
I penciled out a discounted fcf for Tesla where I assumed a 30% decline in deliveries for 2023 and then a 20% CAGR in deliveries from there (Musk says expect 50% and I'massuming he is very very off). I used 5 years and a 15% discount rate and a p/fcf of 20. The fair value I came to was $118. This obviously only speaks to the value of the cars segment and excludes everything else. The problem is, if we assume a 30% decline in deliveries next year, what does that do to stock price in the near term? So why would I buy it here?
Hard to take someone seriously that is never bullish on the market. Even though he is successful, nothing he says is actionable because it's too hard to be correct on the bearish side.
Being bearish all the time considering the history of bear markets is quite silly.
I wonder what it is like to live inside Burry's head… must be living hell with every waking day a recession and terrible news… The problem I have with Burry is that his predictions are without parameters so while he looks and sounds smart, it is a waiting game until the generalized conditions come true!
Interesting thanks, but if there is deflation I don´t get why input costs should stay the same. Companies have already raised prices and most of them reduced inventory levels. Now they will probably adjust production capacity and reduce staff, so for me it´s not clear that earning will go down, maybe a little bit, but it depends of how each individual company adapts to the coming environment.
cough, MSFT buying ATVI, cough cough
Burry is a broken clock, what's happend of the -50% SP500 at 3k in 2022? Still waiting…
Two weeks ago China reopening was going to keep inflation elevated longer and that would force Powell to keep raising rates until the economy was crushed. Now we're looking at deflation, bankruptcies, and Powell cutting rates. Good news is not news. If it bleeds it leads.
When was the last time Burry wasn't predicting catastrophe? He has accurately called 19 of the last 3 recessions.
Why does anyone still believe anything Powell says? Half of what the Fed does is bluster and blarney. Or, more politely, hoping to guide market expectations.
Thanks for your insights Daniel. But I'm still trying to understand how CPI can drop that fast by 2H and we get into a deflationary environment. Some even say that inflation may be stubborn and remain at 4-5% for a long while (i.e. for years to come). Just curious how Burry came up with this type of scenario. Great content as usual.
What about bonds in short term??
Thanks for these insight !!
There is not going to be a price war when inflation reduces. As most of the sectors are monopolized by 3 or 4 players, they will ensure we still pay a high price for the goods & services.
Remember Nu holdings
If Tesla trades at 10 P/E multiple, I will buy some shares!!