Michael Burry’s Big Bet Still Moves Markets—Even If He’s Wrong

Michael Burry earned a whopping $800 million by shorting the US housing market before the 2008 financial crisis. Whether the famous investor has made the same amount since then is unclear. Still, his reputation lives on. Investors continue to closely track his high-profile bets, hoping to ride on his coattails for similar gains.

Burry used to run the hedge fund Scion Asset Management and now publishes opinions in a weekly newsletter, though he reveals little about operations. He has repeatedly deleted and renewed his X account over the years, but remains active on the platform, where he has an estimated 1.6 million followers and frequently posts on the secret market.

His celebrity status was cemented by the 2015 film The Big Shortwhich made Burry a household name. That seems to have given him a level of credibility few long-term investors keep, even if their predictions miss the mark.

“People like champions, and they like to listen to people who think they’re smart and successful,” Tom Sosnoff, founder of investment network Tastylive, told the Observer. “He’s a person and a contrarian. He’s likable and very popular in finance. Like him or not, people listen to him.”

Although Burry’s early success is well documented, his performance since then is difficult to assess. As a hedge fund manager, you are only required to disclose limited information through quarterly filings such as 13Fs, which disclose long equity positions but not short positions, exits or overall performance. As a result, the full picture of his gains and losses remains unclear.

There have been claims that Burry made more than $1 billion in net trading profits, but those figures have never been independently verified, and his fund has never been publicly audited.

Nvidia and Palantir in the crosshairs

Despite the uncertainty of his track record, Burry’s words still move markets. His recent bets on Nvidia and Palantir have drawn particular attention, with Burry arguing that both sit at the center of an AI-driven market bubble.

On Nov. 3, the regulatory filing revealed that Scion has placed approximately $1.1 billion in bearish options positions tied to those companies. The structure of the trade—the very long-dated put options—gives the thesis time to play out rather than requiring a quick decline.

“His timing was very good,” Sosnoff said. “You got short Nvidia near the top (about $200), and now we’re down 10 percent to 15 percent. Good call.”

Palantir, which represents Burry’s biggest shot at about $912 million, didn’t drop much. The stock is down about 7.8 percent from its Nov. 3. Still, because the position is built with options expiring in 2027, some analysts say it’s too early to judge.

“His idea is very good, and he’s more than a year away from being real,” David Trainer, CEO of AI-driven investment research firm New Constructs, told the Observer.

Coach, a former hedge fund manager, also echoed Burry’s broad criticism of the AI ​​hyperscaler, saying companies like Oracle and Microsoft use aggressive accounting practices, particularly around GPU pricing, to drive down wages.

“These companies definitely use questionable fees and commissions to make their earnings look better,” said Trainer. “I can’t say that Burry was right or wrong in past jobs, but I think he made money. [with the A.I. Bubble]he seems to be right.”

Contrarian religion

Not everyone is convinced. Matthew Tuttle, CEO of Tuttle Capital Management and a frequent contrarian himself, said Burry’s post-2008 record is far less than his reputation suggests.

“If you look at the calls Burry has made since 2008, they have not been good,” he told the Observer. “He’s said ‘this is going to crash and it’s going to crash’ many times since then, and he’s wrong.”

However, big bearish bets tend to attract good attention because they go against the grain.

“Anytime someone makes a big call, there’s a lot of interest in it for a long time [bullish] the calls are always good because the market is always going up,” said Tuttle.

That flexibility helps explain why hedge fund stars can remain influential long after their best trading careers are behind them.

“When I’m the main character in a movie and a book like Burry and I’m very honest, that buys me a lot of wrong things,” added Tuttle.

The same dynamic applies to other market personalities like Robert Kiyosaki, Peter Schiff and CNBC’s Jim Cramer, whose reputations often outweigh their accuracy.

“Robert Kiyosaki is always calling a bear market, and he’s wrong, and Peter Schiff has been calling gold for a long time,” Tuttle said. In Schiff’s case, it eventually worked—but more due to timing and luck than ingenuity.

“If you say gold will go up every year, and one year it did well, does that make you smart? I would argue that it is not,” he added.

Fame as financial fuel

Wall Street is full of one-hit wonders whose success gives them lasting influence.

“Most of the time, they don’t risk their money,” Sosnoff said. “If they get a big win in one year, they’re set. Their reputation is made.”

John Paulson, who famously made a $15 billion bet against subprime mortgages, fits that mold, as do figures like Ralph Acampora, who called the 1990 bull market, and Paul Tudor Jones, who predicted the 1987 crash.

Some popular short sellers have stumbled. Jim Chanos, known for breaking up Enron, closed his Kynikos fund in late 2023 after his Tesla bet went wrong. Bill Ackman lost nearly $1 billion on a bet against Herbalife in 2018, despite having previously secured a large bet against mortgage insurers during the financial crisis.

In the end, reputation is often more important than accuracy.

“We live in a world where celebrities (film, social media) have megaphones, and Michael is a celebrity because of the film,” NYU Stern professor Aswath Damodaran told the Observer. “Simply put, I’ll bet that most people who follow his advice (good or bad) do so because they like the movie, they think of Christian Bale or as Batman, rather than reading his books on Nvidia or Palantir.”

That doesn’t mean Burry doesn’t have insight. “Michael is actually a great thinker and is often willing to break away from the herd,” added Damodaran. “But so are many other smart investors who get overlooked.”