Michael Burry made $100M from the 2008 financial crash — and now he’s betting on the AI bubble bursting. What you can do

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Michael Burry isn’t afraid to go against the herd.

The hedge fund manager famously bet against the U.S. housing market ahead of the 2008 crash — earning $100 million for himself and $725 million for his investors — a move later profiled in the hit movie “The Big Short” (1).

Now, he’s raising alarms again.

“Sometimes, we see bubbles,” Burry wrote recently on X. “Sometimes, there is something to do about it. Sometimes, the only winning move is not to play” (2).

Yet this time, he is playing.

In a new 13F filing on Monday, Burry’s firm, Scion Asset Management, revealed bearish positions against two of the market’s hottest names (3).

Scion disclosed put options on 1,0000,000 shares of Nvidia (NVDA) and 5,000,000 shares of Palantir (PLTR) as of Sept. 30.

A put option gives the holder the right — but not the obligation — to sell a stock at a set strike price before expiration, a strategy typically used when an investor expects the stock’s price to decline.

Nvidia has become the chipmaker of choice in the AI race — and a Wall Street idol. Its shares have surged 41% year-to-date and an eye-popping 1,240% over the past five years, helping it briefly reach a $5-trillion valuation recently.

Palantir — a fast-rising data and software powerhouse — is another darling of the AI boom. Despite a recent post-earnings pullback, shares are still up 260% over the past 12 months.

While Scion’s filing doesn’t include the strike prices, expiration dates or premiums paid for those options contracts, the underlying shares tied to these put positions carried a combined notional value of nearly $1.1 billion.

Burry himself even leaned into the drama — pairing his “bubble” comments with a photo of Christian Bale portraying him in “The Big Short.”

Not everyone is impressed. Palantir CEO Alex Karp fired back on CNBC.

“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp said (4). “The idea that chips and ontology is what you want to short is bats— crazy.”

Still, concerns about speculation in the AI trade are bubbling up elsewhere. Goldman Sachs CEO David Solomon recently warned that “a bunch of the capital that’s being deployed [in AI] will actually not produce any returns” (5).

In fact, both Goldman Sachs and Morgan Stanley have recently warned of a potential market correction, with Goldman forecasting a possible 10%–20% drawdown in stocks sometime in the next 12 to 24 months (6).

If you share those concerns, it may be time to consider how to protect your portfolio.

When storm clouds gather over the markets, gold often steps back into the spotlight.

Long seen as the ultimate safe haven, gold isn’t tied to any single country, currency or economy. It can’t be created at will by central banks like fiat money and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in — driving up its value.

Over the past 12 months, gold prices have surged by more than 45%.

Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has repeatedly emphasized gold’s importance in a resilient portfolio.

“People don’t have, typically, an adequate amount of gold in their portfolio,” he told CNBC earlier this year. “When bad times come, gold is a very effective diversifier.”

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an option for those looking to help shield their retirement funds against economic uncertainties.

When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals for free.

Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)

Like stocks, real estate has its cycles, but it doesn’t rely on a booming market to generate returns.

Even during a downturn, high quality, essential real estate can continue to produce passive income through rent. In other words, you don’t have to wait for prices to rise to see a payoff — the asset itself can work for you.

In fact, investing legend Warren Buffett has often pointed to real estate as a prime example of a productive, income-generating asset. In 2022, Buffett remarked that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a check” (7).

Why? Because no matter what’s happening in the economy, people still need a place to live and apartments can consistently produce rent money.

Of course, you don’t need billions — or even to buy an entire property outright — to benefit from real estate investing. Crowdfunding platforms like Mogul offer an easier way to get exposure to this income-generating asset class.

Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.

Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional-quality offerings for a fraction of the usual cost.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

Whether Burry’s move resonates with you or you have your own market convictions, you no longer need a hedge fund to put your views into action. Today’s trading platforms give everyday investors access to tools that were once reserved for Wall Street desks, letting you buy stocks, explore options strategies and build positions based on your outlook.

Robinhood is one example. With the popular brokerage app, you can buy and sell stocks, ETFs and their options commission-free, track your portfolio in real time and get 24/7 access to customer service.

For those starting small, the app also lets you buy fractional shares for as little as $1, making it easy to build a diversified portfolio without breaking the bank.

Of course, making trades is only part of the equation. Keeping an eye on the bigger picture can help you stay diversified and grounded when markets get choppy. That’s where Range comes in.

Built with high-earning households in mind, Range gives you a comprehensive view of your finances — from net worth and portfolio allocation to risk metrics and advanced financial-planning tools — helping ensure your investments stay aligned with your long-term goals, even when market headlines get loud.

Whether you’re cautiously positioning for volatility, looking to take advantage of dislocation, or simply building your strategy one step at a time, platforms like Range can help you stay informed, stay balanced and stay ready — whether the next move in markets is a rally, a reset, or something in-between.

You can book a free demo to see if Range can meet your comprehensive financial needs.

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Vanity Fair (1); @michaeljburry (2); The Securities and Exchange Commission (3); CNBC (4; 6; 7); @TheEconomicClub (5)

This article originally appeared on Moneywise.com under the title: Michael Burry made $100M from the 2008 financial crash — and now he’s betting on the AI bubble bursting. What you can do

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.