BlockBeats news, on August 5, Michael Burry, the investor known for "The Big Short," issued another bearish market warning. He stated that despite the S&P 500 index recently continuing to hit new all-time highs, the market may be nearing a significant top, with even the possibility of a crash similar to the 1987 stock market crash.
Burry wrote on Substack on Tuesday that the market rally may be forming a self-reinforcing mechanism. As volatility declines, volatility-targeting funds may increase leverage, while momentum strategies could further expand their risk exposure, driving continued inflows into the market.
The S&P 500 recently reached a new high, driven by stronger-than-expected corporate earnings and a decline in oil prices due to expectations of resumed shipping in the Strait of Hormuz. The Nasdaq Composite rose nearly 5% over the first two trading days of the week.
However, Baur has not changed his skeptical stance on the AI investment boom. He believes that current AI infrastructure investments rely partly on financing models that are unsustainable in the long term, and he continues to hold multiple short positions, including in semiconductor ETFs, NVIDIA, Micron, Tesla, Caterpillar, Palantir, and Applied Materials.
Burry stated that, aside from the NVIDIA short position, all other short positions are currently profitable, but he will exit with a stop-loss if market conditions continue to worsen. He also reminded investors that short selling is not suitable for most people: “I have to short; most people should not try.”