Michael Burry, the ‘Big Short’ investor famed for predicting the 2008 financial crisis, has issued a dire warning about the trajectory of the U.S. stock market. On Wednesday, Burry highlighted a rare shift in household wealth allocation—stocks overtaking real estate—suggesting it serves as a historic harbinger for a downturn that could last for years.
The ‘Exhibit 12’ Signal
Taking to X, Burry shared a chart titled “Exhibit 12,” sourced from Wells Fargo Securities and Bloomberg. The data tracks U.S. household allocations to equities versus real estate as a percentage of total net worth.
The chart reveals that equity wealth has climbed significantly, recently surpassing real estate wealth. According to Burry, this specific crossover is a high-conviction danger signal that has not been seen in decades.
Echoes Of The 60s And 90s
Burry's analysis relies on historical precedent. He pointed out that household stock wealth exceeding real estate wealth is an anomaly that previously occurred only in the “late 60s and late 90s.”
The implications, according to the now de-registered Scion Asset Management founder, are severe. The late 1960s crossover preceded a decade of stagflation and poor real returns, while the late 1990s instance marked the peak of the Dot-Com bubble.
“The last two times,” Burry noted in the post, “the ensuing bear market lasted years.” He signed off the prediction with the moniker, “Beary Burry.”
How Have The Stocks Performed In 2025?
The S&P 500 index has advanced 15.88% year-to-date, while the Dow Jones index has returned 13.50% and the Nasdaq Composite has gained 19.87% in the same period.
The futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading lower on Wednesday.
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