US investor Michael Burry renewed his warning over the stock market rally, saying markets may be approaching a “major top” that could be followed by a sharp sell-off similar to the 1987 stock market crash, even as major US equity indexes continue to trade at record highs.
In a post published Tuesday on his Substack blog, Burry said fresh highs in the SP 500 could attract additional capital into the market, but do not alter his view that the risk of a sharp correction remains.
Burry, who rose to prominence after predicting the collapse of the US housing market in 2008, said the rally is being fueled by declining volatility, which is prompting volatility-targeting funds, along with momentum-driven strategies, to increase leverage and further extend the market’s gains.
He added that he continues to hold short positions in the iShares Semiconductor ETF (SOXX), as well as Micron Technology, Nvidia, Caterpillar, Palantir, Tesla, and Applied Materials.
Burry said he remains committed to these positions over the long term, but would close them if the market moved decisively against them. He added that all of his wagers remain profitable except for his short position against Nvidia.
US investor Michael Burry renewed his warning over the stock market rally, saying markets may be approaching a “major top” that could be followed by a sharp sell-off similar to the 1987 stock market crash, even as major US equity indexes continue to trade at record highs.
In a post published Tuesday on his Substack blog, Burry said fresh highs in the SP 500 could attract additional capital into the market, but do not alter his view that the risk of a sharp correction remains.
Burry, who rose to prominence after predicting the collapse of the US housing market in 2008, said the rally is being fueled by declining volatility, which is prompting volatility-targeting funds, along with momentum-driven strategies, to increase leverage and further extend the market’s gains.
He added that he continues to hold short positions in the iShares Semiconductor ETF (SOXX), as well as Micron Technology, Nvidia, Caterpillar, Palantir, Tesla, and Applied Materials.
Burry said he remains committed to these positions over the long term, but would close them if the market moved decisively against them. He added that all of his wagers remain profitable except for his short position against Nvidia.
