Michael Burry winds down Scion as he grows ‘out of sync’ with markets: inside his contrarian calls

Hedge fund manager Michael Burry, whose prescient bet against the US housing market ahead of the 2008 financial crisis cemented his reputation as one of Wall Street’s sharpest contrarians, has deregistered his firm Scion Asset Management.

The move comes just days after regulatory filings revealed his bearish positions against artificial intelligence heavyweights Palantir Technologies and Nvidia, sparking debate over whether Burry was once again signalling market excess.

The Securities and Exchange Commission’s database now lists Scion’s registration status as terminated as of November 10.

Deregistration means the firm is no longer required to file periodic reports with the SEC or state regulators, effectively ending Scion’s status as a registered investment adviser.

‘My estimation of value in securities not in sync with the markets’

In a letter to investors dated October 27, seen by Reuters, Burry said he would liquidate the fund and return capital by the end of the year, aside from a small audit and tax holdback.

A person familiar with the matter confirmed the letter’s contents.

“My estimation of value in securities is not now, and has not been for some time, in sync with the markets,” Burry wrote, in a rare admission from the investor whose views have often run counter to Wall Street consensus.

Scion managed about $155 million in assets as of March, and market watchers have long scrutinised his positions for signs of emerging bubbles.

Burry, posting on X on Wednesday, hinted at future plans, saying only: “On to much better things Nov 25th.” Scion did not immediately respond to requests for comment.

Analysts see frustration with current market conditions

Bruno Schneller of Erlen Capital Management said the move appeared to reflect Burry’s dissatisfaction with prevailing market valuations rather than any intention to withdraw permanently from investing.

John Mangun, columnist, BusinessMirror, said Burry is apparently “growing increasingly desperate about the time it will take for the market to go back to its senses.”

“Senses meaning valuations that point to PE, PS, P – whatever ratios – that make more sense to him and to many. The S&P 500 companies, for example, trade at an average PE ratio of about 23 today, well above the historical average of around 18,” he said.