If you’re invested in the stock market, maybe you should be moving to sell out

^{Dow Jones stock market index for past 10 years}

Is another stock market crash on the way? When it comes, will it be make 2008 look like a Sunday school picnic?

Some thoughts to chew on:

• The US has $38 trillion in debt, mounting daily
• The greatest living investor, Warren Buffett, is selling out of stocks and now has a cash pile of more than US$300 billion
• The US Federal Reserve says it will cut interest rates and “be expanding our balance sheet”, ie they’re printing money to buy US debt nobody else wants.
• Michael Burry says the AI stocks boom we are now in, will end the same way the dot.com boom did.

^{Michael Burry}

Who’s Michael Burry? He is best known for being among the first investors to predict and profit from the subprime mortgage crisis (2008), making $100 million for himself and $700 million for his investors. Another Michael (Lewis) the clever writer who sees the funny side of finance — “dumb Germans in Dusseldorf”– wrote about Burry in “The Big Short”, his entertaining book on the 2008 financial crisis. Burry has been quiet for two years, breaking his silence a few days ago to warn that we have another stock market bubble, this time in AI stocks. On the X social media platform, he wrote, “Sometimes we see bubbles. Sometimes there is something to do about it. Sometimes the winning move is not to play.”

Who else is warning we may be heading for a stock market bust:

• BILL GATES: The Microsoft founder has said many AI stocks will be “dead ends”, comparing the current situation to the dot-com era when some companies succeeded while others failed.
• RAY DALIO: The founder of Bridgewater Associates has compared the current levels of investment in AI to the dot-com bubble of the late 1990s.
• BANK OF ENGLAND AND INTERNATIONAL MONETARY FUND have issued formal warnings that AI-driven stocks may have reached bubble levels and there is a high chance of a more “meaningful drop” in stocks than the market is reflecting.
• TORSTEN SLOK of Apollo Global Management says the AI bubble is worse than the 1999 dot-com bubble with the top listed companies being more over-valued than in the previous era.
• JAMIE DIMON: The CEO of JPMorganChase has stated that while AI is “real”, some invested money will be wasted and there is a high chance of a big drop in stock values.