Michael Burry Returns With New Bubble Warning After Two-Year Hiatus
Investor Michael Burry, known for his role in “The Big Short,” has resurfaced on social media after a two-year hiatus. His recent post on X, featuring a moment from the film, signals his concerns about current market conditions.
Michael Burry’s Market Concerns
On Thursday, Burry shared a still from “The Big Short,” showing actor Christian Bale, who played him. Alongside the image, he wrote, “Sometimes, we see bubbles.” His message draws a parallel to the 1983 film “WarGames,” where an AI concludes that the best strategy is to avoid a catastrophic outcome.
A Warning About Current Speculation
Burry’s comments reflect his belief that the markets currently exhibit unsustainable levels of speculation, particularly regarding artificial intelligence (AI). He has chosen to avoid investing in the AI boom, asserting that not participating could be the most prudent move.
This commentary comes as excitement surrounding AI has propelled technology stocks, such as Nvidia, which saw a staggering share price increase of over 1,200% since the beginning of 2023. Nvidia’s market value recently reached $5 trillion, contributing to record highs in the S&P 500 and Nasdaq 100 indexes.
Burry’s Evolving Strategy
In a move that echoes his past warnings, Burry updated his social media profile to “Cassandra Unchained,” referencing the Greek mythological figure known for her accurate yet disregarded predictions. His biography now states he is “One ready to share what I know.”
- Changed header image to “Satire of Tulip Mania” depicting the Dutch tulip bubble
- Previously warned about a “greatest speculative bubble of all time” in 2021
- Has made significant trades in stocks like GameStop, Tesla, and Apple
Burry is recognized for his prior calls on market downturns, including his notable prediction of the mid-2000s housing market collapse. His foresight has made waves in financial circles.
Recent Portfolio Changes
In recent portfolio updates, Burry’s hedge fund, Scion Asset Management, appears to have shifted from bearish investments to bullish positions. In early 2023, he advocated for selling, yet later reports indicated a transition to more optimistic trades.
- Switched from $186 million in bearish positions to $522 million in bullish ones
- End of March 2023 holdings included positions in Alibaba and JD.com
- By June, portfolio expanded to 15 positions, including Lululemon and Estée Lauder
Peter Mallouk, president and CEO of Creative Planning, remarked on Burry’s strategy shift, noting his move from a bearish outlook to betting on a continued bull market. This evolution suggests a complex strategy in navigating the volatile financial landscape.
