NEW YORK: Michael Burry, the investor made famous in The Big Short, is warning that the Nasdaq 100 Index is headed toward a dramatic reversal after a “parabolic” surge that has driven technology valuations to unsustainable heights.
In a post on Substack, Burry said the market resembles the peak of the dot-com bubble just before it burst, citing in particular the steep jump in chip stocks that has pushed up the Philadelphia Stock Exchange Semiconductor Index by nearly 70% since the end of March.
He said the Nasdaq 100, by his reckoning, is trading at 43 times earnings – well above the implied level of around 30 times – because “Wall Street may be overstating by more than 50% the earnings at our fastest growing, most highly valued companies.”
“We are witnessing history. In the stock market, that is not a good thing,” Burry said.
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