Investors Michael Burry and Warren Buffett have once again issued warning signals about the direction of financial markets in November, according to BeinCrypto. While Burry reinforces bets against Wall Street, the famous “Buffett Indicator” reached its highest level in history, suggesting that the US stock market may be dangerously overvalued.
The analyst known as Short Bear described Burry’s latest 13F report as the “boldest” ever presented. The document shows aggressive short positions, with $50 and $30 put option contracts expiring between 2026 and 2027, a clear indication of a bet on a major correction in the coming years.
According to analyst Kashyap Sriram, Burry repeated the pattern from 2024, when he bet on the fall shortly before the April collapse that wiped billions out of the market. He stated that the investor “is short again, on the verge of settling accounts with the AI bubble,” comparing the current euphoria to the tale “The Emperor’s New Clothes.”
Burry’s strategy reflects his conviction that the prices of AI-driven stocks are inflated beyond reason, reminiscent of his famous bet against the housing market in 2008.
Meanwhile, the “Buffett Indicator,” the ratio between the total value of stocks and the US GDP, reached 233.7%, surpassing the peak recorded during the dot-com bubble. Gieger Capital highlighted that “when this ratio exceeds 200%, you’re playing with fire,” referring to Buffett’s warning about the risk of extreme overvaluation.
This disconnect between market value and the real economy suggests an environment prone to severe corrections. Historically, such high levels have preceded long periods of bear market, indicating that optimism may be at its limit. The record reading raises concerns about a sharp reversal.
Meanwhile, the impact is already being felt in cryptocurrencies. The Coin Bureau estimates that the crypto market has lost $790 billion since October, with total market capitalization plummeting from $4.22 trillion to $3.43 trillion. Ran Neuner warned that “a 5% to 10% drop in stocks could accelerate digital losses,” reinforcing the climate of global caution.