Burry warns of possible 1987-type fall as S&P 500 hits record

Michael Burry said U.S. stocks may be nearing a major top and could face a decline similar to the 1987 crash even as the S&P 500 trades at a record high. He said the index's latest move to a new peak could itself pull in fresh money, while falling volatility may force volatility-targeting and momentum strategies to add leverage, creating a self-reinforcing cycle that could magnify any selloff. Burry, who is known for predicting the 2008 global financial crisis and inspired the film "The Big Short," said he continues to hold short positions in the iShares Semiconductor ETF, Micron, Nvidia, Caterpillar, Palantir, Tesla and Applied Materials, and that every bearish position remains profitable except Nvidia. He said he has long-term conviction in those trades but would close positions to minimize losses if they move against him. Burry also renewed his warning that heavy spending on AI infrastructure could lead to a valuation reset if future cash flows do not justify current expectations, while cautioning retail investors not to blindly follow him because short selling is not for everyone.