Big bear Burry issued another warning: US stocks may be close to the top, and a 1987-style collapse is not ruled out

Comparing news, investor Michael Burry (Michael Burry), famous for the movie “The Big Short,” once again issued a bearish market warning. He said that although the S&P 500 index has continued to hit record highs recently, the market may be close to an important top, and a sharp decline similar to the 1987 stock market crash is not even ruled out.

Burry wrote on Substack on Tuesday that the rise in the market may be forming a self-strengthening mechanism. As volatility declines, volatility-targeted funds may increase leverage, while momentum strategies may further increase risk exposure, thereby driving capital to continue to flow into the market.

Recently, the S&P 500 index hit a new high, mainly affected by corporate profits exceeding expectations and falling oil prices driven by expectations for the resumption of shipping in the Strait of Hormuz. The Nasdaq Composite Index has accumulated a cumulative increase of nearly 5% in the first two trading days of this week.

Bury hasn't changed his doubts about the AI investment boom, though. He believes that current AI infrastructure investments are partly based on financing models that are difficult to maintain in the long term, and continue to hold multiple short positions, including semiconductor ETFs, Nvidia, Micron, Tesla, Caterpillar, Palantir, and applied materials.

Bury said that with the exception of Nvidia's shorts, all other short positions are currently profitable, but if the market trend continues to be unfavorable, he will choose to stop and exit. At the same time, he reminded investors that shorting is not for most people; I must go short, and most people shouldn't try it.