Michael Burry bets against rally: 'We are near a major top, and possible a 1987-type fall'
📰 source: cnbc_topnews · 💼 business
michael burry, the investor from 'the big short,' is sticking with bearish bets even as the s&p 500 hits a record close. he warned in a tuesday substack post that 'we are near a major top, and possible a 1987-type fall.' the s&p 500 jumped 1.9% tuesday to its first record close since june, helped by strong earnings and lower oil prices. the nasdaq composite rose 2.7%, extending its two-day gain to nearly 5%.
burry holds short positions in the ishares semiconductor etf (soxx), micron, nvidia, caterpillar, palantir, tesla and applied materials. he said all are profitable except the nvidia bet. he argued the rally is self-reinforcing, with falling volatility forcing vol-targeting funds to leverage up. 'the market going up on falling volatility forces vol-targeting funds to leverage up, and brings leverage from other momentum strategies into play,' he wrote. burry added he would cut losses if trades moved against him, but 'shorting is not for everyone.'
why it matters: burry's warning of a 1987-style crash clashes with record highs, suggesting froth and leverage risks in the current rally.
source: cnbc_topnews
sentiment: -0.70 · impact: 0.50