Michael J. Burry closes Scion Asset Management and issues a warning about market bubbles

NeverPresent · 2026-02-22T18:13:08+00:00

Michael J. Burry, renowned for predicting the 2008 financial crisis, has shut down Scion Asset Management due to inflated market valuations. He warns that the current enthusiasm for AI could lead to a dangerous speculative bubble, urging investors to heed signs of market excess, especially in tech.

NeverPresent

2026-02-22 18:13:08

Abstract generation in progress

Investor Michael J. Burry, who gained international fame for predicting the 2008 financial crisis, surprised Wall Street by announcing the recent closure of his Scion Asset Management fund, returning capital to investors. The decision sends a clear message: the market has lost its fundamental logic. “Prices no longer reflect reality,” he stated in a message to clients, signaling concern over the disconnect between valuations and economic fundamentals.

Scion Asset Management closes operations due to market misalignment

Michael J. Burry justified the fund’s closure by arguing that current market conditions have rendered his traditional investment strategy obsolete. According to him, company valuations have reached such inflated and disconnected levels that fundamental investing — his specialty — has ceased to function properly. The decision reflects a protective stance: he prefers to keep capital in cash rather than invest in a market he considers dysfunctional.

Artificial Intelligence bubble worries market experts

In Michael J. Burry’s view, the excessive enthusiasm around Artificial Intelligence is creating a speculative bubble potentially worse than the dot-com bubble of the 2000s. Tech giants like Nvidia and Palantir are showing dangerously disproportionate valuations relative to their economic fundamentals. The accumulation of capital in tech stocks without justification of real growth appears to be the driving force behind this speculative pressure.

The historical significance of Burry’s warning

When an investor who predicted one of the greatest financial crises in history announces his withdrawal from the market, deeming conditions irrational, the message warrants attention. Michael J. Burry not only identifies problems — he acts on them. His track record of accurate predictions and his decision to redirect his operations suggest that investors and analysts should carefully monitor signs of excess in the current market cycle, particularly in the technology and AI sectors.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

1 Likes