Why is Michael Burry warning against 'Buying the Dip'?

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Why is Michael Burry warning against 'Buying the Dip'?

When the market is on a downward spiral, one strategy common to investors is a technique known as “buying the dip”. The basic concept is that when the price of a stock is low, buying the stock at a discount price can be profitable when the stock returns to a higher value.  Of course, this only works if, in fact, the investor does buy at the bottom. Or at the very least, near the bottom. And therein lies the rub. While some investors are buying up stocks, which they believe have bottomed out, other investors believe the markets could continue falling and, and in some cases, they believe that the current crash is only halfway done.  It’s no secret as to why the market is in its current slump. Rising inflation, which has subsequently forced central banks around the world to raise interest rates, coupled with rising gas prices and supply chain interruptions, brought about by the war in Ukraine, has left the market reeling for much of 2022. One economist, who shot to worldwide fame when he predicted the 2008 housing crash, which led to the worst financial crisis since the Great Depression, is currently warning against buying the dip. Know why is Michael Burry warning against buying the dip in this video by Kalkine Media.


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