After S&P 500 record, ‘Big Short’ investor Burry warns of a possible 1987-style crash
The S&P 500 closed at a record high for the first time in 42 trading sessions, prompting Michael Burry—the prominent investor portrayed in the film “The Big Short”—to warn that the market’s 1987 performance could be repeated. “I still think we may be near a major top, with the potential for a 1987-style crash, but a new high in the S&P 500 could attract new money into the market,” Burry wrote on X early Wednesday, in an excerpt from a post on his Substack blog. On Oct. 19, 1987, the Dow Jones Industrial Average plunged 22.6% in what became known as Black Monday. It remains the index’s largest one-day percentage decline. Burry said he is maintaining his bearish bet on semiconductor stocks through put options on the iShares Semiconductor ETF, SOXX, as well as “short stock positions”—trades in which an investor borrows and sells shares they do not own, hoping to buy them back later at a lower price for a profit. In late 2025, Burry’s Scion Asset Management first revealed its pessimism about artificial-intelligence trades by shorting Palantir Technologies and Nvidia. Palantir shares rose after the company’s latest earnings report, but the stock has declined since Burry disclosed the short position in a regulatory filing in November. Nvidia shares have risen, though not by much. Burry has since recommended trades in several other stocks. “Remember, markets rise when volatility falls, forcing volatility-targeting funds to add leverage and bringing leverage from other momentum strategies,” Burry wrote Wednesday. He was referring to systematic strategies used by hedge funds and other large investors that automatically buy when volatility declines. If conditions change, however, those positions can quickly reverse, weighing on stocks. The Cboe Volatility Index, or VIX, known as Wall Street’s “fear gauge,” rose 4% Tuesday to 16.5, but fell 21% over the previous five trading sessions. In his Substack post, Burry cited Jonathan Krinsky of BTIG Research, who noted that the S&P 500 rose 5% in four trading sessions and reached a record high Tuesday—a pattern that has occurred only three times in the past 30 years. According to related reports, Burry also disclosed several new positions. He closed his long positions and call options, with the amounts omitted in the source; closed his short positions and put options, also with the amounts omitted in the source; and closed his Palantir puts expiring in January 2026 while continuing to short the stock. Palantir shares surged 29% Tuesday after the company reported results that far exceeded expectations, marking its biggest one-day gain since February 2024. Burry rolled his Nvidia puts forward to June 2027 and rolled his short position in Invesco QQQ forward to February 2027. Some investors have pushed back against his crash prediction. Kip Herriage, managing partner and founder of Vertical Research Advisory, wrote on X: “Unless aliens attack, Burry’s short positions will be completely crushed by 2027 in a bull market with this kind of breadth and strength—which is basically how his portfolio is positioned. We are in a generational bull market, the outcome of which will easily reach 10 times the dot-com bubble. This bull market will continue into the 2030s.” In a Substack post in May, Burry criticized his past forecasts, acknowledging that he had “become a meme because of multiple crash calls.” “However, I was right in 2000, right in 2007, right in 2019—with help from COVID—and I predicted the meme-stock crash in mid-2021,” he said. He also said he predicted a rise in bank stocks in 2023. Krinsky said he does not believe the semiconductor-stock rebound can continue because many investors who suffered losses in July will become “opportunistic sellers when prices rebound to resistance levels.”
“I still think we may be near a major top, with the potential for a 1987-style crash, but a new high in the S&P 500 could attract new money into the market,” Burry wrote on X early Wednesday, in an excerpt from a post on his Substack blog.
On Oct. 19, 1987, the Dow Jones Industrial Average plunged 22.6% in what became known as Black Monday. It remains the index’s largest one-day percentage decline.
Burry said he is maintaining his bearish bet on semiconductor stocks through put options on the iShares Semiconductor ETF, SOXX, as well as “short stock positions”—trades in which an investor borrows and sells shares they do not own, hoping to buy them back later at a lower price for a profit. In late 2025, Burry’s Scion Asset Management first revealed its pessimism about artificial-intelligence trades by shorting Palantir Technologies and Nvidia.
Palantir shares rose after the company’s latest earnings report, but the stock has declined since Burry disclosed the short position in a regulatory filing in November. Nvidia shares have risen, though not by much. Burry has since recommended trades in several other stocks.
“Remember, markets rise when volatility falls, forcing volatility-targeting funds to add leverage and bringing leverage from other momentum strategies,” Burry wrote Wednesday. He was referring to systematic strategies used by hedge funds and other large investors that automatically buy when volatility declines. If conditions change, however, those positions can quickly reverse, weighing on stocks.
The Cboe Volatility Index, or VIX, known as Wall Street’s “fear gauge,” rose 4% Tuesday to 16.5, but fell 21% over the previous five trading sessions.
In his Substack post, Burry cited Jonathan Krinsky of BTIG Research, who noted that the S&P 500 rose 5% in four trading sessions and reached a record high Tuesday—a pattern that has occurred only three times in the past 30 years.
According to related reports, Burry also disclosed several new positions. He closed his long positions and call options, with the amounts omitted in the source; closed his short positions and put options, also with the amounts omitted in the source; and closed his Palantir puts expiring in January 2026 while continuing to short the stock.
Palantir shares surged 29% Tuesday after the company reported results that far exceeded expectations, marking its biggest one-day gain since February 2024. Burry rolled his Nvidia puts forward to June 2027 and rolled his short position in Invesco QQQ forward to February 2027.
Some investors have pushed back against his crash prediction. Kip Herriage, managing partner and founder of Vertical Research Advisory, wrote on X: “Unless aliens attack, Burry’s short positions will be completely crushed by 2027 in a bull market with this kind of breadth and strength—which is basically how his portfolio is positioned. We are in a generational bull market, the outcome of which will easily reach 10 times the dot-com bubble. This bull market will continue into the 2030s.”
In a Substack post in May, Burry criticized his past forecasts, acknowledging that he had “become a meme because of multiple crash calls.”
“However, I was right in 2000, right in 2007, right in 2019—with help from COVID—and I predicted the meme-stock crash in mid-2021,” he said. He also said he predicted a rise in bank stocks in 2023.
Krinsky said he does not believe the semiconductor-stock rebound can continue because many investors who suffered losses in July will become “opportunistic sellers when prices rebound to resistance levels.”