Financial expert Robert Kiyosaki, who has been warning of an imminent severe stock market crash for months, sees his pessimistic assessment confirmed by the behavior of the two stock market stars Warren Buffett and Michael Burry.
• Robert Kiyosaki remains bearish on the stock market
• Warren Buffett has huge cash reserves
• Michael Burry bets against the S&P 500 and NASDAQ 100
Robert Kiyosaki, the author of “Rich Dad Poor Dad,” has long warned of the negative consequences of being hawkish monetary policy the US Federal Reserve. According to “Business Insider”, he predicted as early as May 2021 – almost a year before the actual interest rate hike – that the US Federal Reserve would raise interest rates to curb high inflation and that this would result in a crash in stocks and bonds would. While he was right about raising interest rates, the US economy has proven to be quite robust so far. But Kiyosaki, a vehement critic of the Biden government, does not change his pessimistic attitude.
Warren Buffett is accumulating cash reserves
As “Business Insider” now reports, the financial expert sees the behavior of Warren Buffett and Michael Burry – both stars on Wall Street – confirmed in his bearish attitude.
“Buffett is on the sidelines with $147 billion, his money invested in short-term treasury bills,” Kiyosaki explained on Cavuto: Coast to Coast.
Buffett’s holding company, Berkshire Hathaway, sold $8 billion of net stock last quarter and also scaled back its share buybacks. As a result, holdings of cash and Treasury bills together rose 13 percent to near a record $147 billion, it said. This means that the stock market guru – even if he does not expressly forecast a stock market crash – has enough dry powder to acquire bargains or even to make takeovers when stock prices are cheap.
Michael Burry’s bets against S&P 500 and NASDAQ 100
On the other hand, Michael Burry already warned of a historic bubble in the summer of 2021 and predicted the “mother of all crashes”. The 51-year-old hedge fund manager gained a lot of attention because he predicted the bursting of the housing bubble in 2007 and made a million profit thanks to his short bet. He became known to the general public when he was played in the film “The Big Short” by Christian Bale.
Robert Kiyosaki has now pointed out in “Cavuto: Coast to Coast” that “Michael Burry from ‘The Big Short’ [..] For example, Scion Asset Management, Burry’s hedge fund, recently announced that in late June it held bearish put options on the SPDR S&P 500 ETF Trust and the Invesco QQQ Trust – two exchange-traded funds that track the benchmark Map the S&P 500 and NASDAQ 100 indices.
Signals for an overheated market?
“I’m just watching these men waiting for the market to collapse and then getting back in,” said Kiyosaki, adding, “There’s a lot of money on the sidelines right now.”
Both Buffett and Burry are value investors who specialize in identifying undervalued companies and profiting from sell-offs. In fact, Buffett could be piling up cash and betting Burry against the benchmarks because they expect stocks to crash. But it could also be that Buffett hasn’t found any bargains worth buying lately, and Burry has simply been hedging his portfolio to soften the blow to his portfolio should the stock market plummet.
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