Can his warning be taken at face value or just shrugged off as an attention-seeking gimmick? Then he took potshots at Nvidia for its stock-based compensation accounting. For market participants, this represents an opportunity to reassess their own assumptions and ensure their portfolios are positioned appropriately for whatever comes next. Whether this proves to be another prescient call that cements his legacy or another recent misstep from a legendary investor remains to be seen. This demonstrates that he’s not simply bearish on the entire market, but instead has specific concerns about AI-related valuations. This strategy provides leverage and defined risk, allowing him to tap prominent positions without unlimited downside exposure.

Michael Burry And Jeremy Grantham Have Long Sounded The Economic Alarm A 'trumpcession' May Finally Prove Them Right

The investing world is once again paying close attention to Michael Burry, the legendary investor who famously predicted and profited from the 2008 housing market collapse. Over half of U.S. equities are in passive funds, leaving few active investors to stabilize the market. Amid 2022’s bear market—where the S&P 500 fell 20%—Burry ramped up doomsaying in 2022, forecasting “more failures coming” in stocks and banks, with bottoms far off. He liquidated nearly all Scion’s positions, holding just one stock, and tweeted warnings of retail-driven losses on a country-sized scale.

• Burry warned that if dropping to around $70,000 was pushing down the prices of more traditionally solid investments such as gold and silver, it could get even worse if Bitcoin slid down to $50,000.
• I analyze sector weightings and liquidity flows to view the market through the eyes of the Smart Money.
• One option is to shift funds to a more conservative investment strategy, such as investing in an equal-weighted ETF following the S&P 500 index, which removes the weighting of stocks in the S&P 500 and therefore has less exposure to the high-flying AI companies.
• He described a world teetering on the edge of catastrophe, warning that “every bit of my logic is telling me that a global financial meltdown is coming, and that it will be followed by a worldwide political meltdown as well.”
• He also said that the Russia-Ukraine war was dividing Western nations and that together those headwinds could hit growth stocks.

Steps Retail Investors Can Take To Protect Themselves

Burry advocated for small-cap value stocks as a hedge, underweighted in these funds. In the first month of 2017, Burry emerged from relative silence with a stark email to investors at his hedge fund, Scion Asset Management. Michael Burry, the investor immortalized in the film The Big Short for his correct predictive wager against the housing market leading up to the 2008 financial crisis, has built a reputation as a contrarian genius. Writing in his Substack, Burry pointed towards a recent and steep drop in the value of gold and silver, suggesting that investors were selling up in those more reliable areas due to collapsing cryptocurrency prices.

Us Stock Rally Revives Dot-com Crash Comparisons

• Sharing a chart on X, Burry noted that American households now have more wealth locked in stocks than in real estate.
• Recently, though, Burry has made a big change, shutting down his fund, Scion Asset Management, and launching a Substack newsletter.
• Burry advised Elon Musk to issue shares at peak prices to lock in gains, implying an imminent correction of 80% or more.
• Just like the market has gone up and reached extremely high valuations, sometimes without any explanation, that effect could be just as penalizing when the market is going down.
• This strategy provides leverage and defined risk, allowing him to tap prominent positions without unlimited downside exposure.

He points to passive investing and the dominance of big tech firms. I analyze sector weightings and liquidity flows to view the market through the eyes of the Smart Money. These moves align with his 2022 bet on a single prison company stock, a quintessential contrarian move that later liquidated at a loss—a reminder that even legends can misfire. Burry’s exit from SPY/QQQ and pivot to shorting the semiconductor ETF (SOXX)—a key tech enabler—suggests skepticism about overvaluation. Critically, Burry closed these positions by Q3 2023, signaling either profit-taking or a tactical retreat.

March 2021: Bitcoin’s Speculative Bubble Confirmed

As a consequence of this Michael Burry of The Big Short fame has been warning that the crypto crash may have been causing more problems for the economy as investors might be selling off other assets to cover their positions. During his interview with Lewis, Burry said he shut down Scion because he is worried about the stock market, which he believes could experience a prolonged downturn, a scenario he doesn't want to have to relive while running a fund with investors. Nobody can know whether more stock market pain lies ahead or the economy is about to tank — but investors have definitely been warned about stormy times ahead. The barrage of bad news has spurred investors to hammer high-flying stocks such as Tesla and Nvidia and virtually erase the main US stock indexes' progress since November's election.

• He says AI and tech stock valuations are dangerously inflated.
• Exact losses remain undisclosed, but filings suggest heavy writedowns, capping a streak where Burry’s crash calls repeatedly failed and were caught on the wrong side of a bull market repeatedly.
• As a result, investors are more likely to passively invest and buy the dip, especially when the government and the Federal Reserve appear to always intervene to stabilize market conditions as they seem to be rapidly deteriorating.
• Cost basis and return based on previous market day close.

Michael Burry’s Latest Predictions: $16 Bn Short, Long Positions Revealed

While the exact strike prices and expiration dates remain undisclosed, analysts speculate these options targeted SPY $450 and QQQ $370 strikes with expirations aligned to late 2023. The Motley Fool has no position in any of the stocks mentioned. Bram Berkowitz has no position in any of the stocks mentioned.

Technical indicators show a bearish trend firmly established, with multiple short signals activated across different timeframes. Beyond that, an additional drop toward $50,000 would not only devastate miners—many operate with tight margins that wouldn’t survive those prices—but would trigger cascading effects that could contaminate other markets. Burry himself has admitted to errors, such as the 2023 “Sell,” and pivoted to new fights, including AI shorts in Palantir and Nvidia in 2025, using put options. Yet, each time, markets defied his script, powered by innovation, liquidity, and human optimism.

Are Ai And Tech Stocks Creating A Dangerous Bubble?

“This will not happen again,” he implied in deleted posts, warning of repercussions for retail traders. As the GameStop mania gripped markets in late January 2021, Burry, who had built a massive long position in the retailer back in 2019, took a contrarian turn. Yet Tesla reached an all-time high above $1,200, split-adjusted, up another 50% from its December close. Burry’s position, now public knowledge, faced intense scrutiny, with short sellers collectively losing billions. At the time, Tesla shares were still smartytrade review doubling every few months, propelled by inclusion in the S&P 500 and record deliveries. “My last Big Short got bigger and bigger and BIGGER too,” he posted, drawing parallels to his housing bet while insisting the EV maker’s valuation would “implode soon.”

Exact losses remain undisclosed, but filings suggest heavy writedowns, capping a streak where Burry’s crash calls repeatedly failed and were caught on the wrong side of a bull market repeatedly. His bet overlooked crypto’s resilience as an inflation hedge in the eyes of investors. Burry’s fund shifted defensively, but the market shrugged off his gloom, climbing another 6% in February and entering a bull phase that would last for years. Burry eventually exited the trade quietly, but the episode underscored his frustration with a market ignoring fundamentals like negative free cash flow and production bottlenecks. In a lengthy email interview with Bloomberg, he likened the trillions flowing into index funds and exchange-traded funds to the collateralized debt obligations that fueled the housing bubble. This was no vague hunch; Burry tied it to overleveraged debt markets and rising protectionism, echoing the subprime warnings that had made him famous.