"A Possible 1987-Type Fall": Why Michael Burry Refuses to Cover His Bets as Stocks Hit New Highs
Burry said volatility-targeting funds with about $500 billion in assets could force automated selling after a 2.5% drop in the S&P 500.
- In a Tuesday Substack post, "The Big Short" investor Michael Burry warned that volatility-targeting investment funds could trigger a rapid, automated stock sell-off reminiscent of the 1987 market crash.
- Rising markets and falling volatility create a self-reinforcing mechanical loop, Burry contends, as funds leverage up to push prices higher, overextending the market before a potential reversal.
- With around $500 billion in assets under management, volatility-targeting funds could cut their exposure from 77% to around 50% if the S&P 500 saw a mild 2.5% drawdown, Burry noted.
- The S&P 500 rose 1.79% on Tuesday, August 4, 2026, to close at 7,737, reaching its first record high in two months, while the Nasdaq surged 2.6%.
- Burry refuses to cover his short positions in Nvidia, Tesla, Palantir, and the iShares Semiconductor ETF despite the recent market rally, maintaining confidence in a major market top.
18 Articles
18 Articles
Michael Burry, a legendary investor made famous by the film ‘The Big Short’, warns of a stock market crash. Yet global stock markets are breaking one record after another. We ask HLN money expert Pascal Paepen what is going on and whether investors should panic. “He has god-like status because he was right once.”
As the New York stock market continues its steep upward trend, breaking all-time highs day after day, Michael Burry, the real-life model for the movie *The Big Short* which predicted the 2008 global financial crisis, issued a warning by raising the possibility of a stock market crash. On the 4th (
The Stock Market Just Hit a Record. ‘The Big Short’ Investor Michael Burry Says That’s a Warning Sign
The Scion founder is betting against Nvidia, Palantir, and other beneficiaries of the AI boom—and says the record-setting rally is creating leverage that could make the next selloff more violent.
Investor Who Predicted The 2008 Financial Crisis Issues Fresh Warning: 'Possible a 1987-Type Fall"
Michael Burry reiterated his warning that U.S. stocks may be approaching a major market peak, saying conditions resemble those before the 1987 crash even as the S&P 500 and Nasdaq continued their rally.
"A Possible 1987-Type Fall": Why Michael Burry Refuses to Cover His Bets as Stocks Hit New Highs
On Tuesday, August 4, 2026, the S&P 500 rose 1.79% to close at 7,737, its first record high in two months, while the Nasdaq surged 2.6% and the Dow crossed 54,000. The same day, Michael Burry told his Substack subscribers he still sees “a possible 1987-type fall” and is refusing to cover his short book. ... “A Possible 1987-Type Fall”: Why Michael Burry Refuses to Cover His Bets as Stocks Hit New Highs
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