원문 보기
The market is expensive now almost everywhere you look. The estimates are too high. Several companies in the field of artificial intelligence are pulling the entire index up. Bubble warnings are getting louder, but prices are still rising. So, the obvious question for anyone risking money is simple.
What to do when everything is overrated and the crowd is more confident than ever in its rightness? There is one investor who has dedicated his entire career to answering this very question. And he tends to answer in a way that sounds strange until you understand the logic behind it. His name is Michael Bury, the man who predicted the 2008 housing market crash and bet against it when almost no one else believed him.
Most people study Bury hoping to find the next prediction of a major crash, the next “ doom tweet,” the next moment when one man stands up to Wall Street and wins. But this is a cinematic version of himself. A true lesson is more useful and lasting than any individual prediction. Bury doesn't chase predictions.
He is waiting for forced stupidity. He waits until the market sells something too much, loves something too much, or builds a story so full of interest that the deal becomes profitable in his favor. The way it operates in an overheated market boils down to three steps, all rolled into one method. Buy undervalued assets, shorts euphoric fantasies, survive long enough to be proven right.
The first thing to understand: Bury doesn't define "cheap" the way most people do. A low price-to-earnings ratio is not the signal he is looking for. He is looking for something more specific and emotional. He needs a stock that has already gone through what might be called emotional liquidation. Not just a 20% drop.
Not just a 40% drop, but a stock that was hated, abandoned, and completely disposed of by its previous owners. One of his favorite signals for this is shareholder turnover. The idea is to ask how many times the entire shareholder base has actually changed since the stock peaked. If a company has changed owners three to five times in terms of the volume of its shares during a prolonged decline, this may already indicate the formation of a bottom.
But when a stock changed hands 10, 15, even 19 times in terms of its share volume during the decline, something important happened. The old believers left. The tourists left. The crowd, following the momentum, left. The weak players left. At this point, the question changes from "who is still selling" to "who is left to sell?" This is the difference between a " falling knife" and an asset that has bottomed out.
And it's this difference that Bury gets paid to notice while everyone else only sees red on the screen. The most obvious example of this is GameStop. He began accumulating shares back in the summer of 2018, as they were trading at a large discount to the value of what the company actually owned. He returned in July 2019, buying up shares with both hands and increasing his stake to almost 5% of the company.
The thesis was simple. The percentage of short positions was huge. The balance sheet contained a significant cash reserve that could fund an aggressive share buyback, and a catalyst appeared on the horizon in the form of new management. Then he did what defines him. He sold. He exited the position in late 2020, selling the shares at an average of $3.38 each, more than four times the entry price, and left a few weeks before the hype around meme stocks lifted them to a famous peak.
He openly admitted that he never anticipated such a mania, as his approach evaluates businesses for what they actually are, not the knee-jerk impulse of a crowd of retail investors. He lost a huge theoretical profit , but the input was textbook and the output was disciplined. And later he said outright that he had no idea what was coming.
What is important for today's overvalued market is that the situation is repeating itself. In early 2026, Bury returned to GameStop, announcing that he was buying shares again and expected to accumulate them near the nominal value of tangible assets , explicitly stating that this time he was not relying on a short squeeze.
Same logic years later, shareholder base depleted again. The price anchor is the value of the company's real assets, and in addition, there is a management catalyst. When the rest of the market pays any price for history, Bury quietly buys what no one needs at the price of what it owns. This concept— tangible book value— underlies everything Bury does in long positions.
So it is worth dwelling on it in more detail. Tangible book value per share is essentially an indicator of what actually exists. You take everything the company owns. You discard goodwill, intangible assets, and accounting " dust in the eyes." You subtract the debt and you are left with the hard real value of each share.
It does not move along with the optimism of analysts. It does not move with market sentiment. It doesn't move with what AI's mathematical fantasies say about future value. It simply exists as a floor. That is why his long positions tend to have the same structure. The shares are trading near tangible book value.
This tangible book value increases over time, not decreases. The balance sheet is strong and the debt is manageable, not overwhelming. The previous shareholder base has changed significantly, which is a signal of capitulation . Wall Street either hates the name or has stopped covering it altogether.
There is no existential bomb ready to explode, no lawsuit or regulatory threat that could destroy the company, and there is some identifiable catalyst capable of causing a revaluation. The key distinction he makes is clear. Hated and dying is a trap. Hated, solvent, improving, and has a catalyst—that's a good setup.
Cheapness alone is never enough. Cheapness plus hatred plus solvency plus improvement plus a reason for restoration—that's what he's starting to pay attention to. You can see the same strategy in his bet on Chinese technology stocks. Starting in late 2022, he built positions in Alibaba, JD.com, and Baidu—three giants that have suffered from regulatory crackdowns and a brutal sell-off.
Analyst sentiment was as negative as it gets, weighed down by delisting concerns, real estate market woes and geopolitical risks. This consensus disgust attitude is precisely the emotional state he is targeting. Notably, even there he remained disciplined, hedging those long positions with put options , indicating that he saw real , but fragile, upside potential, not a guaranteed thing.
The lesson for an overvalued market is that value doesn't disappear when stocks become expensive. It simply migrates to those corners of the market that everyone else has already given up on. There's a deeper psychological point underneath all of this , and it's the part that sets Berry apart from people who just buy whatever's the hottest.
Most traders want confirmation. They want to see a wall of "buy" ratings before they feel safe. Berry wants the opposite. He wants disgust. Because if every analyst already has a " buy" rating on a stock, the growth potential is already factored in by everyone. Everyone has already been invited to the party, which means the easy money is over.
But when a company has a strong balance sheet, real cash flow, and almost no one is willing to recommend it, that's where the asymmetry lives. The crucial filter is that the negative cannot be associated with terminal risk . There's a huge difference between a company that's hated because it's truly dying and a company that's hated because expectations have become too high, management has failed, the cycle has changed, or the market has simply switched to something brighter.
The crowd throws both into the same trash can. Berry digs through the trash, looking for only the second type. An unloved company with weak finances is a trap that deserves a low price. An unloved company with cash, stock buybacks, tangible value, and problems that can be solved is an opportunity hiding in plain sight.
In a market where popular stock prices reflect the ideal, unloved surviving companies are where a patient investor can still find a margin of safety. Now reverse the method, because the other half of the job in an overvalued market is knowing what to bet against. Burry's short positions are not technical trades.
He doesn't play bearish because the chart looks overheated or some indicator signals overbought conditions. He objects when the story becomes bigger than the business itself. That's the whole point. When narrative obscures real assessment, the stock becomes vulnerable. The market can tolerate high prices.
He can tolerate hype . He can endure hope. But when a company needs perpetual perfection just to justify its current price, the asymmetry changes dramatically. The growth potential is already built into the price , while the downside risks are not taken into account and are waiting for their time. That's why his short position frameworks point to the same goals.
Hype AI companies, excessive semiconductor construction, pure "action narratives" where the dream has outpaced the numbers. And its current positioning makes this philosophy concrete. In late 2025, his fund revealed a large “bear” bet against Nvidia and Palantir, and headlines screamed about a position worth hundreds of millions.
Burry himself intervened to correct the calculations, explaining that the real money at stake was the option premium, not the par value of the shares. In his own words, I spent $9,200,000, not $912 million. This distinction is of great importance, and we will return to why. Philosophy itself is not new to him.
In his first public post on Substack in November 2025, dedicated to the idea of “ oversupply,” he drew a direct parallel between the dot-com era and the present, arguing that just as Cisco was at the center of that bubble, today there is a Cisco at the center of everything , and its name is Nvidia.
He's not saying Nvidia is a bad company. He says the story around it has become so big that the stock now needs a near- perfect future to be justified. And this is precisely the condition that makes the game of relegation asymmetrical, not reckless. Here is the part of Burry's thinking that is truly original and worth absorbing if you want to read an overvalued market.
He argues that the real signal at a market peak is not price, but supply. When insiders start actively selling, when companies massively distribute shares as rewards, when secondary offerings flood the market, and when everyone in the ecosystem suddenly tries to monetize one narrative at the same time— this is not strength.
This is asset allocation disguised as strength. He calls it gluttony on the supply side. And once you see it, you won't be able to " unsee" it. A historical analogy is the housing bubble. Back then, Wall Street wasn't just selling bad mortgages. It created new synthetic instruments to meet the demand for yield until the underlying supply was exhausted.
Baer found his signal not through price analysis but by studying the structure of supply , sifting through stacks of mortgage prospectuses to find the worst of the worst. The mechanism is the same now. He pointed to five public giants investing nearly $3 trillion in AI infrastructure over several years, and called it a structural warning, not a bullish signal.
And the supply signals in today's market are real and measurable. AI leader insiders were strong net sellers of Nvidia, Palantir, Broadcom, and Micron shares. Since mid-2023, insiders have dumped nearly $13 billion in stocks, of which roughly $4.6 billion came in the past 12 months alone. Now, there is a fair caveat here, and Behr's own system requires you to take it into account.
Not every insider selling is sinister. A significant portion of these sales are made under pre- agreed plans and as part of diversification, where executives convert shares into cash. The causal story is indeed complex, but the collective pattern, the vast scale of everyone heading for the same exit, advising the public to keep buying, is precisely the kind of supply signal that Behr has built his career on reading.
Now we come to the most important element of his entire method, which almost no one can copy. Being right is necessary, but not sufficient. You also have to hang in there long enough for your righteousness to bear fruit. This is where most of those who try to trade like Ber fail. Behr can be the first and survive.
Retail traders are the first to die. This gap is the whole game. A mortgage agreement is a perfect illustration. For almost 2 years, his fund lost money, paying constant premiums for bets against the mortgage market. As housing prices continued to rise and his investors went berserk, they demanded their money back.
They threatened legal action. Behr's response was structural. He envisioned the possibility of freezing a position before it was needed, using a clause that allowed assets to be isolated when the market for them was not functioning. He used long-term contracts so that time would not destroy his position before the thesis came true.
And when the mortgage market finally collapsed, the profits were historic. Scion made $725 million for investors. Throughout its existence, the fund has demonstrated profitability that has left the index far behind. The bottom line is that the survival infrastructure was in place before the deal was even initiated.
Without it, he would have been forced to close positions during the drawdown long before he was proven right. Compare this to his short positions on Tesla and ARK in 2021. He was right about the direction of the movement, pointing to speculative mania, but he closed positions before the full reversal, and the duration did not allow him to hold out.
The same thing happened with his famous bet against the broad market in 2023. His fund's reporting showed a $1.66 billion nominal exposure to the S&P 500 and NASDAQ 100—a figure that significantly overstated the actual funds at risk. He closed it a few months later with an estimated 40 % loss on premiums as the market rose on the AI euphoria, instead of falling.
He was right about the assessment, but wrong about the timing. And in the world of options, being premature is effectively the same as being wrong, since the contract expires regardless of whether the thesis was correct. This is the essence of why copying his tickers is the stupidest way to follow him.
The size of his position tells the real story. That recent bet against Palantir and Nvidia was, by institutional standards, a small position, a research bet and a hedge, not a fateful play. He uses his own language of persuasion: from a small position to a full one, and then to a substantial increase .
And it is this size that is the real signal, not the name of the stock. The professional sees the position size, duration, hedging structure, and thesis support. An amateur sees a ticker and thinks it's a " buy" button. So, let 's summarize, because the way Buey works is not just a list of deals. This is the only consistent way to think about the expensive market.
On the long side, he hunts for undervalued, forgotten assets tied to the company's real values, with a catalyst for recovery. On the shorts side, he contrasts himself with euphoric narratives that have grown larger than the real business, analyzing supply rather than price to find the peak. And at the heart of both strategies is ensuring its own survival, so that it is not driven out of the market before the market agrees with it.
Long on the hated value, short on the euphoric revaluation . Protect yourself from a macroeconomic crash, and then wait. The honest answer is that Burr is not a perfect oracle, and he would be the first to point that out. He predicted landslides that did not occur. He was so quick with his predictions that it became his calling card.
He even closed his own fund— Scion’s registration was terminated in November 2025, according to the SEC database—and switched to publishing his thoughts directly, rather than managing other people’s money. Back in May 2026, he warned that the market was reminiscent of the final months of the 1999–2000 bubble and that investors should set aside greed and resolutely cut anything that showed parabolic growth.
Whether this particular prediction turns out to be correct or not is almost irrelevant . The main lesson lies in the decision-making mechanism, not in the forecast itself. In an overheated market, the crowd buys for peace of mind, buys when everyone agrees, and panics when a success story looks ruined .
Burr does the opposite. He buys for discomfort, buys when consent disappears, and asks not whether the price has fallen, but whether the business has truly broken down. The crowd trades emotions. Burr studies emotional exhaustion. And in a market where prices reflect perfection and popular companies have to constantly perform perfectly just to stay in business, the advantage has never been in chasing what everyone else already has.
It's about understanding the bid structure, choosing a size to survive, and knowing how to wait for the moment when forced stupidity gives you the price you wanted from the start. further.
Comments 0