American investor Michael Burry, who warned of 2008 crisis, sees a 'bloody mess'
Investor Michael Burry has issued a warning regarding potential market instability caused by automated volatility-targeting funds. He suggests that these funds could trigger a systemic selloff, creating a 'bloody mess' in the U.S. stock market.
Why it matters
Burry's warnings are closely watched due to his accurate prediction of the 2008 financial crisis, highlighting risks in modern algorithmic trading.
America’s biggest investor Michael Burry, who is known for predicting the popular 2008 housing crash and portrayed in The Big Short, has now issued a stark warning about US stocks. According to a report by Business Insider, in his latest Substack post, Burry said he sees the risk of a rapid unwind driven by automated volatility-focused investment funds, which could unleash “carnage” across the market. Burry pointed to the recent plunge in momentum stocks — high-flying chipmakers and memory names as a preview of what could unfold. The iShares MSCI USA Momentum Factor ETF has dropped 14% from its peak, underscoring how quickly profits can evaporate when investors rotate out of overheated trades.
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