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There is one investor whose name is synonymous with the word crash, and that is Michael Burry. Michael Burry is the figure who inspired the film The Big Short because he successfully predicted and profited greatly from the subprime mortgage crisis in 2008. And now he is being bullied on Wall Street.
The reason, he said, was selling AI shares. Meanwhile, the prices of these stocks are rebounding wildly, making many people huge profits. Big analysts are flocking to give good ratings to the stocks they are short. Well, the financial media is starting to question whether Michael Burry is still relevant or just The Boy Who Cried Wolf, aka someone who screams danger-danger-danger so much that no one believes him anymore.
Well, but what's interesting is that a few weeks before this all happened, he seemed like the most accurate prophet on Wall Street. So who is actually right? Michael Burry or the whole world against him? And more importantly, is this AI stock bubble he fears really real? Well, if you're curious, stay tuned for this video.
Okay, before we get into the discussion, let's get to know Michael Burry first. Michael Burry was originally a doctor. Then he changed direction to become an investor and founded Scion Asset Management. His name exploded through the book and film The Big Short because he was one of the few people who dared to place a large bet against the American housing market before the 2008 crisis erupted.
And as a result, he made extraordinary profits while everyone else lost. Outside the investment world, he is also known for his dramatics on social media. He has deleted his X account many times after making controversial bearish statements . If we look at Burry's own claims, his track record is actually no joke.
He was right about crash.com in 2000, he was right about the 2007 subprime mortgage crisis that became the story of The Big Short, and he was also right about the run-up to 2019, which was helped by the Covid pandemic. Michael also predicted a meme stock crash in mid-2021 and was also correct about the regional bank turmoil in 2023.
But on the other hand, he himself admitted that it had become something of a meme because of its frequent association with the word crash. In his article in May 2026, which was titled "about that boy who cried wolf," he openly stated that he had become the boy who cried wolf. But he also defended himself, saying that many of the crash predictions attached to his name were actually misquoted by the media.
So it's just a regular regulatory filing regarding his short position, not an explicit statement that the market will crash. Well, the lesson is, reputation is a two-way street. A strong track record makes people believe, but if that belief is repeated too often without instant results, people become skeptical even though the original track record is actually still valid.
Well, on November 4, 2025, through a quarterly regulatory filing , Burry revealed his put option positions, aka bearish bets, on Nvidia and Palantir shares. Two of the most iconic names in AI's stock market have released shares worth a combined value of over US$1 billion, or approximately 17.8 trillion rupiah.
Over the next few months, he added more to MicroStrategy and the QQQ ETF, which contains large technology stocks . Well, the main argument is that the market is now only going up because of one single narrative, AI, and ignoring other economic data such as employment and consumer data. He said the market had jumped the shark, a term for something that had gone too far and was just waiting for its collapse.
They say, try listening to any financial radio station, it's all about AI from morning till night, as if there are no other important topics. Well, on July 1st to 2nd, 2026 he posted a short but dramatic warning. In essence, the apocalypse was near, and the timing was perfect because on exactly those two days, the American semiconductor stock index began to fall sharply.
Well, then in mid-July 2026 what Barry feared actually happened. AI infrastructure stocks plummeted tens of percent in a matter of weeks. Even one of the world's largest AI funds had to sell its portfolio due to a margin call. Now, if you've watched my previous video about Leopold Aschenbrenner, this is exactly the same thing.
Well, for a moment Barry looked like the biggest genius on Wall Street. Well, but coming into August 2026 the story took a drastic turn. The stocks he shorted rebounded sharply, supported by genuinely strong financial reports, not just hype. For example, Nvidia shares jumped 34% in one day after posting 454% revenue growth.
Palantir shares rose 35% in a month on revenue growth of 92.8%. Micron even nearly touched an all-time high, rising 671% in 1 year, with 40 of the 45 analysts covering the stock giving it a buy rating. Even one of Barry's main theses was shaken. He said the old GPU chips would quickly become economically obsolete.
But Coreweave, one of the companies he shorted, revealed that its old Nvidia chip contract from 2020 was still available for lease until 2029. Barry's short position, which had previously seemed brilliant, has now become a burden. Well, at this point most people would probably cut their losses and back off.
But Barry did the opposite. He even added to his short position in Micron stock. The stock is actually being praised by the majority of analysts and extends its QQQ put option from the previous expiration of January 2027 to June 2027. This means he is holding on to his bet for even longer . Burry himself admitted that his current position is more or less at break-even and is starting to enter the loss area.
Furthermore, as of August 12, 2026, the American market had recorded 182 consecutive trading days without a single day with dominant selling volume above 80% on the New York Stock Exchange. This is the longest streak in at least 30 years. Burry himself called this a risk signal akin to 1987 when the Dow Jones plunged 22.6% in just one day.
Because a market that continues to rise with low volatility actually encourages volatile funds to increase leverage instead of reducing risk. Well, this combination is what makes him a target for criticism. Not only because his shorts are losing money, but because he keeps increasing his bets amidst mounting evidence that contradicts his thesis.
Financial media is starting to question whether this is a matter of principle or misplaced stubbornness. Well, on August 13, 2026, in his latest writing, Burry did not back down, he actually changed the perspective of his argument. The focus now is not just on overpriced valuations but on what is called circular financing.
Well, these AI companies fund each other and that money is recorded back as revenue on their own financial statements. He said this pattern had even been recognized by the Bank for International Settlements in their June 2026 report. But strangely, Wall Street almost never discusses it openly. Well, what's interesting this time is that he gave a much looser time target.
The best case scenario is that this bubble will only truly burst in 2028. Now, to critics, this seems like a change of goal. What initially seemed urgent has now become more than 2 years in the future. But there is data that makes his argument impossible to dismiss outright. There is something called the CAPE CAPE ratio.
This is an indicator of the American stock market valuation whose data is recorded over 150 years ago. Now it is at 42.56. It's just 3.7% off the all-time high of 44.19 set in December 1999 just before the dot com bubble burst and more than double its historical average. So, while the timing is uncertain, concerns about overvaluation are clearly not just idle opinions.
So, who is right? Is it Michael Burry or The Whole World that is against Michael Burry? Honestly, the answer is not certain right now. Clearly, this story shows something important. The difference between being too early and being totally wrong is very thin when viewed in real time. Even for investors with a track record as strong as Michael Burry's .
There is one sentence that I think is most appropriate for this situation, which is often attributed to an economist, namely John Maynard Keynes. Although the actual original source is disputed. Well, the sentence is more or less like this. The market can remain irrational longer than you can remain solvent.
This means that even if your analysis is fundamentally correct , if your timing and risk management are weak, the market can punish you long before you have a chance to prove yourself right. Well, Michael Burry himself seems to be aware of this risk. That's why he keeps adjusting his arguments and time targets.
But he also hasn't backed down from his fundamental belief that US stock valuations are currently overpriced. Will he be right again in 2028 or will it be the umpteenth time he's been too early? Well, we can only wait and see for ourselves. So, from Michael Burry's story, I want to ask you back. If you have a strong belief in one analysis, but the market continues to go against you in the short term, you will either hold your position like Barry or cut your losses and admit that my analysis was wrong.
Please share your opinion in the comments column. And as usual, if you like this video, don't forget to click like, subscribe, share and most importantly, don't forget to turn on notifications so you don't miss my other videos. Finally, greetings from me, Rivan Kurniawan, Indonesian Value Investor and investment advisor registered and licensed by the OJK. See you in the next video. Bye bye.
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