Michael Burry — the renowned investor behind The Big Short who famously predicted the 2008 financial crisis — has officially closed his hedge fund, Scion Asset Management.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC) dated November 11, Burry decided to wind down the fund after concluding that current market conditions no longer align with his valuation approach.
“My estimates of value in securities are no longer the same as they once were, and they’ve long been out of sync with the market,” Burry wrote in his letter to investors.
Burry explained that he did not want his investors to experience the same turmoil he endured between 2005 and 2007, when his contrarian bets on the U.S. housing market triggered investor backlash and redemption demands—long before his predictions were vindicated during the 2008 crash.
He described that period as a psychological war, surrounded by voices calling him an “idiot” while waiting for the market to correct itself.
Warning Signs of an AI Bubble
In recent months, Burry has repeatedly voiced concern over what he sees as an emerging artificial intelligence (AI) bubble. He warned that major hyperscaler companies might be manipulating depreciation schedules to artificially inflate earnings—drawing parallels to the infamous dot-com bubble of the early 2000s.
Burry also highlighted how indices such as the S&P 500 and Nasdaq 100 have hit record highs, largely driven by AI enthusiasm, which he believes has pushed stock valuations to unsustainable levels.
From Hedge Fund to Family Office
Given his skepticism toward current market conditions, Burry stated that he would rather manage his own capital privately through a family office structure, free from quarterly disclosures or investor expectations.
This move allows him to hold firm to his convictions without exposing external investors to the volatility of an increasingly unpredictable market.
“Let the market prove me right on its own timeline,” Burry implied, emphasizing patience over performance pressure.
Legacy of a Contrarian Investor
Burry remains one of the most respected contrarian voices on Wall Street. His prescient call on the 2008 subprime mortgage collapse earned him global fame and later inspired the Oscar-winning film The Big Short.
In recent years, however, Burry has become a vocal critic of speculative manias—from meme stocks to cryptocurrencies—and now, the AI-driven rally dominating equity markets.
While his latest decision to close Scion Asset Management may seem like a retreat, it underscores a sobering reality: even the sharpest market minds are finding today’s financial landscape harder to predict than ever.
⚠️ Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always Do Your Own Research (DYOR) before making investment decisions.
