Billionaire Michael Burry Sends Investors a $1 Billion Warning About the AI Boom. History Says the Stock Market Will Do This Next.

Hedge fund manager Michael Burry made a billion-dollar bet against subprime mortgage-backed securities during the housing bubble that contributed to the financial crisis in 2008. He persuaded several major banks to create and sell credit default swaps, essentially insurance policies that offer protection against credit events.Those insurance policies paid out big when the housing bubble burst. Borrowers defaulted on their mortgages en masse, rendering the underlying subprime mortgage-backed securities worthless, and Burry turned an $800 million profit. His story was profiled in the 2010 book The Big Short: Inside the Doomsday Machine, as well as in the 2015 movie The Big Short.Burry recently shook the market with another big short position, this time betting against two popular artificial intelligence (AI) stocks. His hedge fund (Scion Capital Management) has 66% of its $1.4 billion portfolio in put options on Palantir Technologies (NASDAQ: PLTR) and another 14% of its portfolio in put options on Nvidia (NASDAQ: NVDA).Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool