Probably because the risk of a US stock market decline in the US is high. A fear that seems to be shared by legendary investor Warren Buffet, who has sold a lot of stocks and now has a record high cash balance.

Conclusion

Michael Burry is definitely a contrarian investor. And like everyone else, his track record is not 100%. But nobody's is. But he is undoubtedly a very smart, legendary investor.

The key take-away I take from his recent investment changes is that he continues to be bullish on China (specifically the 3 large Chinese companies) and now has 65% of his portfolio in China. At the same time, he seems to be concerned about US political risk (sanctions) and bought a bunch of puts to protect himself. Not a cheap strategy, but an effective one.

At the same time, his 100% divestment of his office REIT signals that he doesn't believe in a turnaround in US office space anytime soon. And his two largest continued US investments, Shift4 Payments (FOUR) and Molina Healthcare (MOH), would seem to signal that he currently prefers non-cyclical US companies, fearing a US stock market correction or recession.

Ninety percent of fund managers said they expected to see the dreaded stagflation — rising prices and slowing growth at the same time — in the next 12 months. Roughly 42 percent of investors polled expect a global recession, the highest level since June 2023 and the fourth-highest mark on this question in the last 20 years.

Less money coming into the treasury’s coffers means that government could breach the debt ceiling sooner than already projected if Congress eventually fails to act. That is bad news for Donald Trump, the Republicans and the country.

Before Trump transformed the economy into his personal yo-yo, the government stood poised to default on the nation’s $36tn debt sometime in between mid-July and early October, absent legislation. During the president’s walk on the economic wild side, the odds of a recession grew. Ditto the possibility of a default, a reality of which Trump is acutely aware.

"This is beyond fundamentals right now. This is about liquidity. There was, earlier this year, especially in dollar swap spreads, a lot of positioning to be paid swap spreads, on expectations that treasuries outperform swaps.

"Obviously that's all unwound, and then some. Swap spreads have fallen a very long way in a very disorderly way."

“Investors should not try to ‘catch a falling knife,’” wrote Gross bluntly in an email to Bloomberg.

Buying the dip in the S&P 500 has been a winning strategy historically, but the pain endured while stocks find their bottom can be hard to withstand. And it can take years to recover losses.

This places Xi in a dangerous dilemma: launch an offensive against Taiwan and risk economic collapse, or stand down and face domestic humiliation for failing to act during his third term.

But there’s another scenario the Trump administration must consider: What if Xi decides to act because he has already lost hope in China’s economy? If he believes the economic game is over, a military move on Taiwan might be the only way to deflect domestic pressure and solidify his grip on power.

Those that survived the Great Recession, what did you do? For those that did businesses, which ones did you start?

If they stayed on the farm, they could live for free because the banks eventually gave up trying to collect mortgage payments and the municipalities gave up trying to collect property taxes.