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Michael Burry, the investor known for his role in "The Big Short," stated on a Substack chat that he is not adding new short positions despite viewing current stock market highs as a potential "bull trap." His caution comes as his portfolio maintains an 8% to 10% allocation to Fannie Mae and Freddie Mac junior preferred shares, a position dependent on a specific government resolution.
The warning followed a mixed trading session where the SPDR S&P 500 ETF Trust (SPY) declined by 0.06%, the Invesco QQQ Trust (QQQ) fell 0.7%, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.35%.
The S&P 500 remained near the record high set the previous week. Burry noted that while many stocks are hitting new highs, the market environment is not conducive to adding bearish exposure.
He described the challenge as staying positioned until his bearish view plays out, stating, "I just know where this will be in a few years.
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