Making money: what the experts think
Burryed alive, feeling peaky and stalling house prices
Michael Burry rose to fame when his bets against mortgage securities during the 2007-08 financial crisis were featured in the movie The Big Short. Now he has a new target, said Bloomberg. Burry’s fund, Scion Asset Management, “has taken aim at one of Wall Street’s hottest stars”: Cathie Wood, whose flagship exchange-traded fund, the ARK Innovation ETF, has lured in billions from investors since “her thematic tech-focused bets trounced the market in 2020”. Scion isn’t alone. Several other hedge funds have amassed big short positions. Wood may have her critics, but she was “ahead of many peers” in “paring” Chinese tech holdings during the country’s recent crackdown. And she’s not afraid of taking on Burry – observing on Twitter that while he made “a great call” in the mortgage market, he doesn’t really understand “the fundamentals that are creating explosive growth and investment opportunities in the innovation space”.
In fact, fund managers globally are signalling “peak boom” and “peak risk”, said Jeremy Gordon on Citywire. But that doesn’t mean they’re selling shares. According to Bank of America Merrill Lynch’s latest survey, optimism about the global economic recovery has plummeted, with just 27% of respondents expecting continued improvement – down from a peak of 91% in March. There’s “growing consensus that the rebound in corporate profitability is set to move into reverse”, and that “monetary authorities will start to reduce stimulus”. But while bond yields are “anchored near record lows”, investors see no choice but to remain “loaded up with equities”.
Stalling house prices
“The long surge northwards in UK house prices” may have peaked too, said Investors Chronicle. According to online estate agency Rightmove, the average price of houses coming onto the market has dipped by 0.3% (or about £1,000) so far in August and now stands at £337,371. “Summer is traditionally a quieter time for the market but, until now, there had been little sign of house price growth abating.” It appears that the end of the stamp duty holiday for houses priced above £500,000 – and the “impending removal” of the tax break for houses above £250,000 – may finally be having an effect.