10 Times Michael Burry’s Market Crash, Other Predictions were Wrong

Published July 19, 2021 at 2:27 pm EDT Updated September 7, 2026 at 1:30 pm EDT

In this article, we discuss the 10 times Michael Burry’s market crash, other predictions were wrong.

Michael Burry, the investor who predicted the stock market crash of 2008 and made billions by betting against subprime mortgages during the financial meltdown, has become somewhat of a legend in the finance world. He runs the California-based hedge fund Scion Asset Management with over $1.3 billion in assets under management. Over the past few years, as the market goes on a bull run, buoyed by incredible numbers posted by technology firms, Burry has repeatedly warned investors of another looming financial crisis.

Burry, with a personal net worth of over $300 million, is one of the most successful money managers in the world. However, it seems like his obsession with market crashes has led him down a rabbit hole from which he cannot emerge. In the past few years, he has made multiple predictions around market crashes, cryptocurrencies, retail investors, and meme stocks that have all proved to be false, damaging his credibility irreparably. Perhaps disappointed at his recent record, Burry has even deactivated his Twitter account.

The investor deactivated his account after he faced criticism over his bleak outlook on the economy from internet users. Burry still engages with the mainstream media, mostly through email interviews, though the audience that accepts his worldview has thinned in recent months. Some of the top stocks in his portfolio, discussed in detail here and here, include Alphabet Inc. (NASDAQ: GOOG), Facebook, Inc. (NASDAQ: FB), and The Kraft Heinz Company (NASDAQ: KHC), among others.

Burry is one of the few investors who have been immortalized through Hollywood. He was the subject of the film The Big Short that captured his 2008 crisis prediction and the money he made through it. In the decade since the crisis, the market dynamics have changed remarkably, with technology stocks dominating the S&P 500 and investors like Burry, who avoid unnecessary risk and like to make profits by betting on value plays, have pushed to the periphery as retail investors take center stage in the finance world.

The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

10 Times Michael Burry's Market Crash, Other Predictions were Wrong

Michael Burry of Scion Asset Management

With this context in mind, here is our list of the 10 times Michael Burry’s market crash predictions were wrong. These were ranked keeping in mind the timing of the prediction, the nature of the crash predicted, and the market dynamics following the prediction. Burry has deleted some of the predictions from his Twitter handle since he made them, but they are still a part of public record through news platforms that covered them when they were made.

Times Michael Burry’s Market Crash, Other Predictions were Wrong

10. Index Funds are Like Subprime CDOs

Source: Bloomberg Interview, September 2019

Burry told news publication Bloomberg through an email interview in September 2019 that index fund inflows were distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages more than a decade ago. The investor, who had made billions by betting against CDOs during the financial crisis of 2008, said it would be ugly when the flows reversed. However, index funds have continued to generate record returns over the past two years, proving Burry wrong.

One of the top holdings in the Burry portfolio is SunCoke Energy, Inc. (NYSE: SXC), the Illinois-based raw material processing company. At the end of March, Burry owned more than 1.1 million shares in SunCoke Energy, Inc. worth more than $7.7 million.

At the end of the first quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $86 million in SunCoke Energy, Inc., up from 19 in the preceding quarter worth $65 million.

Just like Alphabet Inc., Facebook, Inc., and The Kraft Heinz Company, SunCoke Energy, Inc. is a top holding in the Scion portfolio.

9. Issue 25-50% Tesla Shares at Current Ridiculous Price

Source: Twitter, December 2020

While Tesla, Inc. (NASDAQ: TSLA) was on a record rally at the turn of the year, Burry put a damper in the hopes of those who wished to see the stock climb even higher. He took to social networking platform Twitter to say that was shorting the stock and that the electric vehicle maker was ridiculously priced, advising Musk to issue shares to finance debt. However, Tesla, Inc. continued to rally despite the bearish Burry prediction, jumping from a 526% rally at the time to over 700% in the coming months, before taking a breather in April.

The stock has recorded a slump in recent weeks amid a massive sell-off in electric vehicle stocks. However, the basic business of the firm continues to deliver. In June, the firm posted vehicle delivery numbers for the second quarter, reporting 201,250 deliveries over the period, just below market estimates of around 230,000 deliveries but topping the key 200,000 milestone.

A premier holding of the investor is NOW Inc. (NYSE: DNOW), the oil drilling firm headquartered in Texas. At the end of the first quarter of 2021, Burry owned 700,000 shares in NOW Inc. that were worth $7 million.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in NOW Inc. with 5.7 million shares worth more than $58 million.

Alongside Alphabet Inc., Facebook, Inc., and The Kraft Heinz Company, NOW Inc. is a top holding in the Scion portfolio.

8.Tesla, Inc. (NASDAQ: TSLA) Rally Similar to Past Internet, Housing Bubbles

Source: Twitter, January 2021

After his initial prediction on Tesla, Inc. failed to materialize, Burry tried again in January 2021, again using Twitter to tell his followers that the stock would fall like the housing and internet bubbles of the past. He also took the opportunity to take a swipe at Tesla, Inc. bulls, telling them to enjoy the bubble while it lasted. This was the second time Burry faced humiliation on his Tesla, Inc. prediction, as the automaker continued to rally and made owner Musk the richest man in the world in the coming days.

On July 13, investment advisory Goldman Sachs maintained a Buy rating on the stock with a $860 price target.

Burry is shorting Tesla and buying Zymeworks Inc. (NYSE: ZYME), the Canadian biotechnology firm. At the end of March, Burry owned 281,018 shares in Zymeworks Inc. that were worth around $8.8 million.

At the end of the first quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $473 million in Zymeworks Inc., down from 28 in the preceding quarter worth $688 million.

Zymeworks Inc. is a top holding in the Scion portfolio, just like Alphabet Inc., Facebook, Inc., and The Kraft Heinz Company.

7. Speculation, Betting Have Driven Market to Brink of Collapse

Source: Twitter, February 2021

After failed predictions on Tesla, Inc., Burry used Twitter again in February 2021 to warn his followers that he feared that the market was on the brink of collapse, saying that passive investing, the spike in the trade of bull options, and speculative stock bubbles had taken the market to a knife’s edge, highlighting soaring debt to drive his point home. However, this prediction did not come true as well, as over the next few months, the market continued on a post-pandemic bull run without anything resembling a crash.

Meanwhile, Burry is bullish on Ingles Markets, Incorporated (NASDAQ: IMKTA), the regional supermarket chain based in North Carolina. At the end of the first quarter of 2021, Burry owned 150,000 shares in Ingles Markets, Incorporated worth $9.2 million.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm GAMCO Investors is a leading shareholder in Ingles Markets, Incorporated with 851,802 shares worth more than $52 million.

The top spots in the Scion portfolio are occupied by firms like Alphabet Inc., Facebook, Inc., and The Kraft Heinz Company, as well as Ingles Markets, Incorporated.

6. Bitcoin Is a Speculative Bubble, Poses Risk

Source: Twitter, March 2021

Piling onto his failures, Burry next took aim at Bitcoin, the most popular cryptocurrency in the world, the next month. In March, he tweeted that Bitcoin was a speculative bubble that posed more risk than opportunity despite most of the proponents being correct in their arguments for why it was relevant at this point in history. He also said the current price of the coin was unsustainable. This prediction did not come true as well, as the coin rallied to a record high of around $64,000 in the coming weeks, before taking a breather towards the end of April.

One of the top holdings in the Burry portfolio is CoreCivic, Inc. (NYSE: CXW), the Nashville-based firm that owns and operates private prisons. At the end of March, Burry owned more than 1.1 million shares in CoreCivic, Inc. worth $9.9 million.

At the end of the first quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $95 million in CoreCivic, Inc., the same as in the previous quarter worth $67 million.

CoreCivic, Inc. appears alongside giants like Alphabet Inc., Facebook, Inc., and The Kraft Heinz Company on the Scion portfolio.

5. Hype Drawing in Retail Investors Before Mother of All Crashes

Source: Twitter, June 2021

Last month, just before he deactivated his Twitter account, Burry used Twitter to predict another market crash. He said in a tweet on June 17 that retail investors were being drawn into a speculative market that would lead to the mother of all crashes. He added that when crypto fell from trillions, or meme stocks fell from tens of billions, losses would approach the size of countries. However, this crash, despite the passing of more than four weeks since he made it, is also yet to materialize, with the market continuing to offer investors record returns.

One of the premier holdings of the Burry portfolio is NetApp, Inc. (NASDAQ: NTAP), the cloud services and data management company. At the end of March, Burry had call options on 300,000 NetApp, Inc. shares worth $21 million.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in NetApp, Inc. with 1 million shares worth more than $75 million.

4. There Cannot be Another Perfect Setup Like GameStop

Source: Twitter, January 2021

Burry also gave his take on the GameStop Corp. (NYSE: GME) rally in January, again using his favorite medium, Twitter, to outline his thoughts on the market. In late January, as GameStop Corp. underwent a short squeeze, Burry predicted that it was a perfect setup and that there would not be another rally like. However, the rally in AMC Entertainment Holdings, Inc. (NYSE: AMC) stock the same month proved Burry wrong. Burry was one of the architects of the GameStop Corp. short squeeze.

Burry has invested heavily in CVS Health Corporation (NYSE: CVS), the Rhode Island-based healthcare firm. Burry has call options on 400,000 CVS Health Corporation shares that are worth more than $30 million.

At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in CVS Health Corporation, up from 56 in the preceding quarter worth $961 million.

In one of its investor letters, VLTAVA Fund highlighted a few stocks and CVS Health Corp (NYSE:CVS) is one of them. Here is what VLTAVA Fund said:

“During the past quarter, we acquired one new position, CVS Health Corporation. It is a relatively large American company with sales around the same level as Apple. CVS is a health care company. To put it simply, its business can be divided into three areas: a retail pharmacies chain, pharmacy benefit management services, and health insurance.

We have been following CVS for a long time. We began monitoring the company more closely in 2018, when CVS acquired the health insurance company Aetna, a direct competitor of Humana, into which we first invested in 2009. We like CVS’s new integrated business model, but, as tends to be the case with such a large acquisition, it often brings with it some problems. In most cases, acquisitions prove to be overpriced and come with large debt and integration issues. We decided to wait and see how things developed. Now, two years later, integration has not caused fundamental problems, the debt has been declining rather quickly, and the cost of the acquisition has long been reflected in the stock price. Today that price is around the same level as it was in 2013 and meanwhile the earnings per share have doubled. We acquired CVS at 7.5 times this year’s earnings and with a double-digit free cash flow return.”

3. Prepare for Inflation, Bitcoin and Gold at Risk

Source: Twitter, February 2021

Just as the vaccine rollout allowed for the partial reopening of the economy and buoyed investors, Burry was there to spoil the party again. He tweeted in February that investors should prepare for inflation where hedges like Bitcoin and gold would be at risk. He also said that governments would move to squash competitors in the currency arena during an inflationary scenario, hinting that Bitcoin could be at risk. This prediction only turned out to be partially true.

Although Beijing has cracked down on crypto in China, resulting in a dramatic drop in the prices of cryptocurrencies, there has been positive news on the crypto front as well, with El Salvador adopting Bitcoin as legal tender. In terms of inflation, even though market fears in this regard continue to persist, Federal Reserve Chair Jerome Powell on June 23 told lawmakers that problems like rise in demand for goods and supply chain problems would resolve in the near-term and ease inflation-related pressures.

Burry holds a large stake in The Kraft Heinz Company, the food company that operates from Chicago. At the end of the first quarter of 2021, Burry had call options on more than 1.1 million The Kraft Heinz Company shares worth close to $47 million.

Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in The Kraft Heinz Company with 325 million shares worth more than $13 billion.

In its Q4 2020 investor letter, Berkshire Hathaway, an asset management firm, highlighted a few stocks and The Kraft Heinz Company (NASDAQ: KHC) was one of them. Here is what the fund said:

“We exclude our Kraft Heinz holding — 325,442,152 shares — (In the list of 15 common stock investments that at yearend were our largest in market value) because Berkshire is part of a control group and therefore must account for that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of $13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020.

Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method. Currently, the most significant of these is our investment in the common stock of The Kraft Heinz Company (“Kraft Heinz”). Kraft Heinz is one of the world’s largest manufacturers and marketers of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Berkshire currently owns 325,442,152 shares of Kraft Heinz common stock representing 26.6% of the outstanding shares…(Click here to see the full text).

2. Robinhood Leading to Gamification of Stocks

Source: Twitter, February 2021

With the rise of retail investor interest in stocks, Robinhood, the trading application, has registered remarkable user growth over the past few months. However, just as meme stocks were becoming a topic of discussion early this year, Burry took to Twitter to outline his view on the application, saying that he believed it had led to the gamification of stocks and comparing it to a fun for all ages casino. Despite this bleak outlook, Robinhood has continued to soar and plans to go public soon at a $40 billion valuation.

One of the top holdings in the Burry portfolio is Facebook, Inc., the tech firm that owns popular social platforms like Instagram and WhatsApp. At the end of March, the Scion chief had call options on 550,000 Facebook, Inc. shares worth $161 million.

At the end of the first quarter of 2021, 257 hedge funds in the database of Insider Monkey held stakes worth $40 billion in Facebook, Inc., up from 242 in the preceding quarter worth $38 billion.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ: FB) was one of them. Here is what the fund said:

“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”

1. Companies Going Public Through SPACs Lack Quality

Source: Twitter, March 2021

Burry also took a swipe at special purpose acquisition companies in March this year, tweeting that even though SPACs were hotter than ever in the world of finance, the companies that went public through them were not well vetted. He even added that anyone could start an SPAC and get wealthy from it, regardless of the quality of the firm going public. Despite this bear outlook, SPACs have continued to facilitate some of the largest public offerings this year, with many under agreements with lucrative startups in growth areas in the coming months as well.

Burry holds a large stake in Alphabet Inc., the California-based technology firm. At the end of March, Burry had call options on 80,000 Alphabet Inc. shares worth more than $165 million.

Out of the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. with 2.9 million shares worth more than $6 billion.

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ: GOOG) was one of them. Here is what the fund said:

“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”

You can also take a peek at Michael Burry’s New Stock Picks and Michael Burry is Shorting Tesla and Buying These 10 Stocks Instead.

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