Warren Buffett and Michael Burry are waiting for stocks to crash, Robert Kiyosaki says.
The author of “Rich Dad Poor Dad” pointed to Buffett stockpiling cash and Burry shorting the market.
Buffett and Burry are both value investors who excel at finding bargains during market downturns.
Warren Buffett and Michael Burry are ready and waiting for stocks to plunge and bargains to pop up, Robert Kiyosaki says.
“Buffett is on the sideline with $147 billion, his money’s in short-term Treasurys,” Kiyosaki said on “Cavuto: Coast to Coast” on Tuesday. “Michael Burry of ‘The Big Short,’ he’s shorting the market right now.”
“I just watch these guys waiting for the market to crash then go back in,” the author of “Rich Dad Poor Dad” added. “It’s a lot of money sitting on the sideline right now.”
Buffett’s Berkshire Hathaway sold a net $8 billion of stocks and slowed its buybacks last quarter. That fueled a 13% increase in its total amount of cash and Treasurys to a near-record $147 billion.
Meanwhile, Burry’s Scion Asset Management disclosed this week that it held bearish put options on the SPDR S&P 500 ETF Trust and Invesco QQQ Trust at the end of June. Those exchange-traded funds track the benchmark S&P 500 and Nasdaq-100 indexes respectively. Burry’s options mean he stands to profit if the indexes fall.
Buffett hasn’t explicitly predicted a stock-market crash, but he’s sold $33 billion of stocks on a net basis and grown Berkshire’s cash pile by $38 billion over the last three quarters. The bargain hunter now has plenty of dry powder to deploy on cut-price stocks and acquisitions if the market does retreat — just as he did during the Great Recession when he struck deals with Goldman Sachs, General Electric, and many other companies.
As for Burry, he’s said there was a historic bubble and predicted the “mother of all crashes.” His latest short positions have set alarm bells ringing, as he was one of the few people to predict and profit from the US housing market’s collapse in 2008. Like Buffett, he’s a value investor who specializes in spotting underpriced businesses and seeks to capitalize on sell-offs.
Kiyosaki’s says Buffett is stockpiling cash and Burry is betting against the benchmarks because they expect stocks to tank. While the Berkshire boss may have simply found little worth buying, and the Scion chief might have been hedging his portfolio, it’s certainly possible they view the stock market as overheated and headed for trouble.
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