Burry warns investors to cut tech stock exposure amid bubble concerns
Investing.com — Michael Burry urged investors to reduce their holdings in technology stocks, stating the current market has reached historically dangerous levels similar to past speculative bubbles.
The investor, known for forecasting the 2008 housing collapse, told investors to “reject greed” as excitement surrounding artificial intelligence and momentum-driven trading pushes valuations higher.
“An easier way for most is to simply reduce exposure to stocks, to tech stocks in particular. For any stocks going parabolic reduce positions almost entirely,” Burry wrote in a Sunday Substack post.’
Burry said he maintains “a significant leveraged short position” against a portfolio of companies he views as depressed and cheap, a strategy he used in 2000.
Burry cautioned that betting against the rally through short selling carries risk and remains impractical for most investors, especially as bearish trades have become expensive.
“Shorting is not the answer. It is not something most people should ever do,” he said. “Right now it is expensive, in general, to buy put options and directly shorting stocks can still cause significant pain.”
Major stock indexes have repeatedly hit record highs as investors buy shares in semiconductor makers and large-cap companies.
“The idea is to raise cash, and prepare to put it to work when it makes more sense to do so,” Burry wrote.
Burry has warned for months that the stock market’s focus on AI resembles the final stages of the dot-com bubble. Last week, he compared the recent movement of the Philadelphia Semiconductor Index (SOX) to the period before technology stocks collapsed in March 2000, saying the current environment feels like “the last months of the 1999-2000 bubble.”
Related articles
Burry warns investors to cut tech stock exposure amid bubble concerns
These 2 stocks are best positioned to benefit from higher uranium prices: analyst
As Claude disrupts stock market, Anthropic researcher warns ’world is in peril’