'Big Short' investor Michael Burry predicted the housing crisis. Now he's calling passive investment a 'bubble.'
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Famed investor Michael Burry told Bloomberg he sees passive investment strategies as a "bubble" that ignores small-cap stocks.
His comments are pegged to the fact that exchange-traded funds and index-based assets mostly focus more on bigger, more established companies. As investors find this passive investment increasingly appealing, smaller growth stocks are languishing in the background, Burry said.He also said he's interested in small-cap companies since there isn't a "critical mass of smaller value-seeking active managers like me" to help bring other investors to the table.
Burry rose to fame after betting against mortgage-backed securities ahead of the 2008 financial crisis. The unconventional trade netted Burry millions and was documented in Michael Lewis' bestselling novel "The Big Short." The book was later adapted into a 2015 film of the same name, with actor Christian Bale playing Burry.The investor announced a long position in GameStop earlier in August, telling Barrons the company's balance sheet "is actually in very good condition." Burry added that next-generation game consoles will include disk drives, and the hardware decision "will extend GameStop's life significantly" as customers continue to purchase physical games.
Scion owns 3% of GameStop's shares outstanding, and manages $343 million in total.
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