Famous investor Michael Burry continues to bet on a decline in the US stock market despite the record rise of the S&P 500 index, CNBC reports.
Recently, the S&P 500 rose by 1.9%, closing at a historic high for the first time since June, amid strong corporate financial results and falling oil prices. The technology-heavy Nasdaq Composite index increased by 2.7%.
Despite the positive market dynamics, Burry is skeptical about the boom surrounding artificial intelligence, believing that the current demand for infrastructure in the sector is not sustainable in the long term. He continues to hold short positions in the stocks of iShares Semiconductor ETF, Micron, Nvidia, Caterpillar, Palantir, Tesla, and Applied Materials.
According to the investor, the current market growth has created a self-sustaining cycle, where the reduction in volatility encourages investment funds to increase their use of financial leverage.
“I continue to believe that the market is approaching a major peak, and a decline is possible based on the 1987 scenario. However, the new historical highs of the S&P 500 will likely attract new capital to the market,” Burry stated.
He added that all his bets on a decline remain profitable, except for the position against Nvidia, and reminded that the short-selling strategy is not suitable for all investors.
