'Downgrade Game' investor returns with warning of market bubble

American financier Michael Burry, who predicted the 2008 mortgage crisis, has published a post on social network X for the first time in two and a half years. Burry's entry hints that he has spotted a new bubble in the market. The post is now the only one on his page.

"Sometimes we see bubbles. Sometimes you can do something about it. Sometimes the only winning move is not to play," Burry wrote. The investor accompanied his post with a shot from the movie "Downgrade Games," for which he became the prototype.

Burry also changed his profile name to "Cassandra Liberated," a reference to the mythological prophetess doomed to make accurate predictions that no one believes. As he did when he returned to social media in November 2021, he again put a reproduction of the painting "Allegory of Tulipomania," a satire by Jan Bruegel the Younger of the surge in frenzied demand for tulip bulbs in the Netherlands in the 1600s, Business Insider noted.

Reaction from subscribers to Burry's post was divided. Some welcomed the "return of a legend" and the call for caution. Others skeptically noted that since Burry published a post with the single word "sell" in early 2023, the ProShares UltraPro QQQ - an exchange-traded fund with triple leverage to the return of the Nasdaq 100 index - has nearly quintupled in value.

Burry became famous for predicting the collapse of the mortgage bubble in the U.S. housing market, which caused the 2008 global financial crisis, and made money from it. His bet against the market was the basis for the book "The Downgrade Game" and the movie of the same name.

In financial circles, he is known for frequently predicting market crashes and recessions, investing in video game retailer GameStop long before its stock became a meme, and betting against Elon Musk's Tesla, Cathie Wood's funds, Apple, Nvidia, the S&P 500 and Nasdaq 100 indexes, Business Insider notes.

In the summer of 2021, Burry sounded the alarm about "the greatest speculative bubble of all time in everything" and warned buyers of meme stocks and cryptocurrencies that they were hurtling toward the "mother of all collapses." Burry's dire warnings caught the attention of Musk in late 2021, who called it a "broken clock," BI recalls.

Burry's investment firm Scion Asset Management made a big bet on stocks in the second quarter of 2025, replacing bearish put options with bullish call options and adding several new positions to the portfolio. In a quarterly disclosure in mid-August - the latest to date - the financier said it bought call options on shares of Alibaba, ASML, JD.com, Estee Lauder, Lululemon, Meta, Regeneron, UnitedHealth and VF between April and June.

Call options give investors the right to buy shares during a set period at a predetermined price - this allows them to fix the purchase price in the hope that the value of the securities will increase before the expiration of the option. Put options, on the other hand, allow you to lock in a sale price and make a profit if the stock price declines.

Burry's fund Scion Asset Management also took direct positions in Bruker, Lululemon, Regeneron, UnitedHealth and MercadoLibre, while reducing its direct position in Estee Lauder from 200,000 to 150,000 shares. The cosmetics giant was the investment firm's only long position in the first quarter, with all other securities sold off.

Scion is known for major portfolio shuffles between quarters, but this time the changes were particularly impressive, BI noted. At the end of March, the fund held put options on Alibaba, Baidu, JD.com, Nvidia, PDD and Trip.com with a notional value of $186 million and a $13 million direct position in Estee Lauder. Three months later, Scion had call options on nine stocks with a notional value of $522 million and six direct positions totaling $56 million.

This article was AI-translated and verified by a human editor