Michael Burry says the stock market's latest record high resembles the March 2000 dot-com peak more closely than any other modern market top. Burry analyzed 982 S&P 500 record closes since 1980 in an October 24 Substack post. Burry evaluated each close using seven measures of market internals, including how many stocks were near highs or suffering deep drawdowns.
March 2000 and October 6, 2026, were the only records with weakness at or beyond the 95th percentile across all seven measures. No other record close met that threshold over 46 years. October 6 was the latest record for the S&P 500, which the SPDR S&P 500 ETF (SPY) tracks. Burry says the pattern initially emerged this year on May 27.
At the October 6 record, just 19.3% of S&P 500 constituents were within 10% of their 10-year highs, a 99.5th-percentile reading. The leadership group contained fewer than 100 stocks, a condition previously seen only in March 2000. Nasdaq-heavy stocks underlying the Invesco QQQ Trust (QQQ) surged during that earlier period. Burry found that a record 58% of the latest leadership group traded 5% to 10% below their peaks. March 2000 had the second-highest share, at 40%. Stocks that Burry labels "Busted" account for 23% of index constituents and trade more than 40% below their highs. The Busted group has a median decline of 55% from its peaks.
Burry estimates that the S&P 500 trades at about 32 times earnings using Burry's adjusted earnings figures. The market's earnings multiple in 2000 was roughly 32 to 34. However, the 10 largest companies traded at 50 times trailing earnings in 2000, compared with 33 times today. Busted stocks had a median earnings multiple of 10.2 in 2000, compared with 17.2 now.
After the 2000 peak, leading stocks recorded a median decline of 33% over 12 months. Leading stocks recorded a median decline of 50% over 18 months. Busted stocks gained a median 19% over the first 12 months. Busted stocks gained a median 18% over 18 months. However, Burry cautions that this pattern does not consistently recur. Every group lost more than 40% over the 18 months following the October 2007 peak. Deep discounts also provided little protection before the 2020 COVID crash.
Burry is positioned for a recurrence of the 2000 pattern. Burry holds beaten-down stocks including Lululemon Athletica (LULU), PayPal Holdings (PYPL) and Adobe (ADBE). Burry also has short positions in artificial intelligence and semiconductor stocks, a market segment tracked by funds including the VanEck Semiconductor ETF (SMH). From October 6 through October 19, the 114 Busted stocks gained a median 3.2%. The S&P 500 declined 1.6% over that period. Burry described the move as "almost certainly an indication of nothing."
Michael Burry Compares Current Market to Dot-Com Peak
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Summary
Market analysis by Michael Burry shows the current S&P 500 resembles the March 2000 dot-com peak. Burry studied 982 record closes since 1980 and found October 6, 2026, had weakness at or beyond the 95th percentile across seven market internals. Only 19.3% of S&P 500 stocks were within 10% of their 10-year highs, a 99.5th-percentile reading. The leadership group contained fewer than 100 stocks, mirroring 2000 conditions. Burry estimates the S&P 500 trades at 32 times earnings, similar to 2000 levels. He is betting on a repeat by holding value stocks and shorting AI and semiconductor names. Market trends suggest a potential correction is looming.
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