Key facts
- Jeremy Grantham predicted a potential 70% or more crash in tech stocks and dismissed bitcoin.
- Grantham's long-term bearish calls have coincided with significant market rallies, leading to criticism.
- Michael Burry defended his originality in creating the trade that bet against subprime mortgage-backed securities.
- Burry claims he shared his insights with prominent investors and institutions, including John Paulson and Goldman Sachs.
- Critics, including CNBC's Joe Kernen, Elon Musk, and Palantir CEO Alex Karp, have questioned the track records of both Grantham and Burry.
Market bears Jeremy Grantham and Michael Burry are facing increased scrutiny and criticism over their long-standing predictions of market downturns, particularly as major stock indices reach record highs. Grantham, co-founder of asset manager GMO, recently told CNBC that early investors in artificial intelligence would suffer losses similar to those in past booms, predicting a potential 70% or more crash in tech stocks. He also dismissed bitcoin as a speculative asset destined to disappear.
During the interview, CNBC's Joe Kernen challenged Grantham's track record, suggesting his repeated warnings of a crash have been unheeded for years, causing disservice to those who followed his advice. Grantham defended his calls, disputing the notion that he has been consistently wrong.
Meanwhile, Michael Burry, known for his bet against the subprime mortgage market, has been defending the originality of his famous trade. After posting about his 'lone wolf' nature on X, he faced comments questioning whether he was truly alone in his wager. Burry asserted that he originated the trade and shared his insights with various market players, including John Paulson, Greg Lippmann, Peter Thiel, and Goldman Sachs. Derivatives expert Janet Tavakoli supported Burry's claim, calling him a 'pioneer' for his analysis of vulnerable subprime mortgages and complex financial instruments.
Burry, who has also warned about an AI bubble and has taken short positions against companies like Nvidia and Palantir, has faced similar public criticism from figures like Elon Musk and Palantir CEO Alex Karp, who have called his bearish calls inaccurate.