Michael Burry vs. Jim Cramer: Is It Time to Buy or Sell Stocks Now?

Two investing influencers have expressed opposite takes on how investors should play the current market. Michael Burry, of The Big Short fame, is no stranger to issuing ominous warnings for investors. But on the evening of Jan. 31, 2023, he tweeted one word that quickly sent shivers through the investing community: “Sell.” Burry has since deactivated his account but the tweet is still being widely passed around the platform as investors debate its accuracy. However, a fellow celebrity investor recently issued a take that is in stark contrast to Burry’s. Jim Cramer of CNBC has indicated that he sees the current financial landscape as a bull market and that investors should be buying now.

Which of these experts is correct in their thesis? Let’s take a closer look at what both are saying.

Michael Burry vs. Jim Cramer

It’s hard to imagine two personalities more opposite than Michael Burry and Jim Cramer. Burry’s quiet, socially awkward demeanor is as widely known as Cramer’s brash, outspoken mannerisms. And why Cramer seems to thrive on attention and controversy, Burry often deletes his Twitter account with no warning if a tweet draws considerable ire from investors. His recent action following the “sell” tweet fits well within his classic modus operandi.

Cramer, on the other hand, loves to tweet about stocks, regardless of how the investing community reacts to his takes. Yesterday, he criticized popular meme stock Bed Bath & Beyond (NASDAQ:BBBY) over Twitter. But Cramer has made it clear that he believes investors should be buying on the dip right now. As he recently stated:

“If we’re in a bull market, and I think we are, you have to prepare yourself. We have to prepare for the down days now because in a bull market, they’re buying opportunities.”

Cramer didn’t specify which stocks he sees as good buys right now. But according to data from Quiver Quantitative, he’s bullish on J M Smucker (NYSE:SJM) and Crispr Therapeutics AG (NASDAQ:CRSP) as of Jan. 31. The list also includes a long position in Qualtrics International (NASDAQ:XM). All three have been generally performing well recently as positive market momentum has lifted stocks across the board.

Of course, all this begs the question of who is right in the battle of Burry vs. Cramer. There’s merit to both bullish and bearish market cases right now. In the days leading up to the recent Federal Reserve meeting, uncertainty cast a dark shadow over markets as companies awaited the latest rate hike news. InvestorPlace contributor Josh Enomoto reports we are currently facing a combination of mass layoffs across many sectors and a yield curve inversion with a proven history of predicting recessions.

With that in mind, it’s easy to suspect that Burry’s warning could be correct. But when the Fed raised interest rates by only 25 basis points, investors breathed a sigh of relief as stocks quickly rallied. Both the Nasdaq composite and the S&P 500 are currently in the green and look poised to keep rising.

What Comes Next

Markets are still adjusting to the recent rate hike decision. It’s entirely possible that things may shift in the future, giving more credence to Burry’s argument than Cramer’s. But for the time being, it seems that Cramer is correct in his hypothesis that this is the time to buy as markets prepare to shift upwards in 2023. The current rally suggests that better days are ahead, even as layoffs continue to cast doubts over certain industries.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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