Benzinga - by AJ Fabino, Benzinga Staff Writer. In the backdrop of a roaring market rally, a familiar name emerged with a contrarian view. Michael Burry, whose legendary bearish bet on the U.S. housing market inspired the film “The Big Short," appeared to be challenging market bulls during the second quarter.
The broad market SPDR S&P 500 ETF Trust (NYSE:SPY) rose more than 16% through the first half of the year. Add to that, stalwarts like the Invesco QQQ Trust Series 1 (NASDAQ:QQQ) surged 20% higher.
Burry and his hedge fund Scion Capital veered bearish on both the overarching market and the tech arena last quarter. Specifically, 20,000 put options on the SPY and 20,000 puts on the QQQ, which indicated to investors that the markets might be at a peak and could be in for a correction.
Contrary to Burry's bearish inclinations, current market pulses with optimism, with the SPY climbing 16% this year while the Nasdaq Composite clocked a near 30% rise.
"Everybody’s talking about Michael Burry's trade,” Benzinga's PreMarket Prep host Dennis Dick said. “I mean, we go to the gym and they’re discussing it."
And, not every investor agrees with Burry.
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Mark Chaikin, founder and CEO of Chaikin Analytics, was unambiguous, "He’s going to be wrong — there are others out there a lot smarter than Burry," Chaikin said, branding him as a “one-trick pony."
Chaikin acknowledged typical market pullbacks but emphasized the strength in the current market structure. “You have the bullish channel in the S&P, and if that channel holds, we won’t see a full 10% downturn."
While Burry’s history of market predictions might cause ripples of concern, voices like Chaikin remind investors to maintain perspective.
The next few months are bound to show whether Burry’s bold bearish bet will stand vindicated or fall by the wayside.
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