Burry's most notable historical behavior was shorting the US housing market through CDS around 2005, ultimately predicting the 2008 subprime crisis. He has repeatedly turned to shorting technology and overvalued assets at different stages, and in 2026, he has focused pressure back on the semiconductor and AI trading crowded areas.

This capital path is clear: money first flows into AI and semiconductors, then pushes leverage higher through volatility compression, ultimately transmitting risk to systemic funds and passive funds tracking indices. Burry's approach is not to chase direction, but to observe how capital is structurally amplified, so he is betting on the volatility chain, not just price direction.

In comparison, this is more akin to the tech frenzy at the end of 1999-2000 and the automated sell-off mechanism before 1987, rather than a typical bull market pullback. The current industry position has shifted from expansion to the eve of crowding and deleveraging, with the core contradiction being the simultaneous accumulation of valuation, positioning, and programmatic risk control.

Essentially, this represents a transfer of pricing power: prices are increasingly determined by capital rules, volatility targets, and risk models, rather than fundamental slow variables. As long as new highs continue to attract chasing funds and volatility remains suppressed, leverage will continue to rise until a small decline triggers a chain sell-off.

ABAB News · Cognitive Laws

The more everyone is bullish, the more one should first look at the capital chain.
A decrease in volatility is not safety; it is an increase in leverage.
New price highs are often just a prelude to risk repricing.