Michael Burry’s 12 Failed Bets On Market Crashes Over The Past 8 Years

Burry has closed his hedge fund and taken bearish positions personally. Cryptocurrency and investing involve significant risk, never invest more than you can afford to lose, and always do your own research or seek professional advice.Content is intended for adults only. He is fascinated by smartytrade reviews trading and market analysis.

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• His warning captured real risks—such as margin debt at record levels—but it arrived as vaccines were being rolled out.
• 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.
• The chart reveals a descending price channel that has been driving the cryptocurrency lower since its all-time high near $126,000.
• Whether this proves to be another prescient call that cements his legacy or another recent misstep from a legendary investor remains to be seen.
• Timing the market remains a risky strategy.

Michael Burry, Jeremy Grantham, and other market commentators have for years been warning that stocks will crash and the economy will crater. The investor who saw the housing crash coming is now warning about AI—and prudent investors would be wise to understand at least why. The enthusiasm around AI has created an environment where investors have been willing to pay premium prices based on future growth expectations rather than current fundamentals. One of the investors from The Big Short has been warning of the consequences if the value of Bitcoin drops below $70,000, as prices have plummeted massively since they hit a peak late last year. While a crash isn’t imminent, investors ignoring his warnings risk exposure to overvalued tech and geopolitical landmines. 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.

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Investor Michael Burry believes current market risks are high. Get curated U.S. market news, insights and key dates delivered to your inbox. Burry’s bet isn’t a market timer’s crystal ball—it’s a risk management tool. The Nasdaq’s 39% surge in 2023 (driven by AI stocks) has raised red flags. These strikes were slightly out-of-the-money at the time, suggesting Burry anticipated a 20%+ decline in major indices—a move that would mirror his 2008 housing crisis prediction.

The Stock Markets Ultimate Line In The Sand

“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 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.”

Technical Analysis Suggests Further Downside

The filing also revealed that Burry maintains some bullish positions, including call options on Halliburton and Pfizer, as well as share positions in Molina Healthcare, Lululemon, and SLM Corp. These are the fundamental charts of the AI sector that Michael Burry shared on his X post, which he has based his bearish put options bets on. His investing philosophy centers on deep fundamental analysis and a willingness to stand alone when his research contradicts popular narratives.

• He liquidated nearly all Scion’s positions, holding just one stock, and tweeted warnings of retail-driven losses on a country-sized scale.
• When Burry makes a significant move, especially one as concentrated as his current positioning, institutional investors and retail traders alike take notice.
• His warnings—rooted in leverage, speculation, and policy risks—often nailed the vulnerabilities, from inflation’s surge to crypto’s winter.
• Investors who own individual stocks may also want to look carefully at valuations, as Burry actually suggested.
• This factor could lead to sector rotation out of current market leaders and into laggards such as small-caps and interest-rate-sensitive stocks.

Just as momentum was building, President Donald Trump’s tariffs unsettled markets, triggering a sharp selloff in early April. The market has shown remarkable resilience this year, pushing through multiple headwinds and remaining firmly afloat. Calling it an interest chart, the fund manager said this “has happened only twice — in the late 60s and late 90s.

• The short seller has now trained his sights on the broader market, though projecting it in a less flattering light.
• Bram Berkowitz has no position in any of the stocks mentioned.
• Many internet companies that failed during that crash were working on legitimate business models, but their stock prices had run too far ahead of reality.
• His institutional fund operates with different constraints, time horizons, and risk tolerances than most individual portfolios.
• Robinhood’s stock had debuted at $38 in July 2020; by February 2021, it was trading around $50, despite volatility.

January 2021: Tesla’s Imminent Implosion Reiterated

He also said that the Russia-Ukraine war was dividing Western nations and that together those headwinds could hit growth stocks. Since then, stocks have rebounded and resumed a broadly upward trajectory, punctuated by brief, intermittent pullbacks within the larger uptrend. Sharing a chart on X, Burry noted that American households now have more wealth locked in stocks than in real estate. The short seller has now trained his sights on the broader market, though projecting it in a less flattering light. With approximately 80 percent of his portfolio positioned to profit from declines in these AI leaders, he’s making a statement that can’t be ignored about his view of current market conditions. Michael Burry’s massive bet against Nvidia and Palantir represents one of the most significant contrarian positions taken by a prominent investor in recent years.

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.

• Burry posted on X a comparative chart with the simple message “$BTC Patterns,” where he draws structural similarities between the current drop—from $126,000 to $70,000—and the previous brutal plunge that took Bitcoin from $35,000 to below $20,000.
• Put options give the holder the right to sell shares at a predetermined price, making them profitable when stock prices decline.
• The enthusiasm around AI has created an environment where investors have been willing to pay premium prices based on future growth expectations rather than current fundamentals.
• 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.
• Active investing refers to the process of conducting thorough research and frequently buying and selling stocks to outperform the market and generate alpha, as there are inefficiencies to capitalize on.
• His bet overlooked crypto’s resilience as an inflation hedge in the eyes of investors.

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.

However, there are other astute investors who disagree with Burry, and ultimately, retail investors are very unlikely to correctly time the market. Historical data show that the market has consistently generated solid long-term returns and that investing in stocks is less risky when held for the long term. And so the problem is, in the United States, I think when the market goes down, it’s not like in 2000, where there was this other bunch of stocks that were being ignored, and they’ll come up even if the Nasdaq crashes. Active investing refers to the process of conducting thorough research and frequently buying and selling stocks to outperform the market and generate alpha, as there are inefficiencies to capitalize on. Michael Burry became one of the few investors to make bets against the housing market before it collapsed during the Great Recession. Other market whizzes, including the hedge fund manager David Einhorn and the "Black Swan" investor Mark Spitznagel, have called out epic levels of speculation among investors and cautioned that they’re marching toward disaster.