Michael Burry and Warren Buffett, two icons of market caution, are flashing red signals for November. Burry is once again betting against Wall Street, while Buffett’s favorite valuation gauge just hit its highest level in history.
Together, their moves are sending a powerful warning that financial markets may be entering dangerous territory, with crypto already feeling the pain.
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Michael Burry’s “Wildest” 13F Yet
The Short Bear, a pseudonymous trader and analyst, has described Michael Burry’s latest 13F filing as his wildest yet. The filing, submitted more than a week earlier than usual, shows Burry executing aggressive short positions reminiscent of his strategy before the 2008 financial crisis.
According to their analysis, Burry’s trades include put (sell) contracts stretching to 2026 and 2027, with tens of thousands of contracts on positions such as $50 and $30 puts. This implies a long-term bearish outlook and potential preparation for a major market collapse within two to three years.
Market analyst Kashyap Sriram noted that Burry shorted the market in Q1 2025, just before the April flash crash that wiped out billions in equity value.
Burry’s strategy suggests he believes the market has overextended on artificial intelligence mania, echoing his contrarian stance before the subprime collapse nearly two decades ago.
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Warren Buffett’s Classic Warning Revisited
Meanwhile, Warren Buffett’s long-standing valuation metric, the Buffett Indicator, is now flashing its strongest warning since the dot-com era.
The ratio of total US stock market capitalization to GDP has reached 233.7%, a new all-time high.
Buffett Indicator. Source: Gieger Capital on XSponsored
A reading of 233.7% indicates that US equities are extremely overvalued relative to the real economy. Historically, such a condition is associated with sharp corrections or multi-year bear markets.
Crypto Already Feeling the Heat
The crypto market appears to be the first casualty of this growing risk aversion. According to Coin Bureau, $790 billion in value has been wiped out since October, with the total crypto market capitalization falling from $4.22 trillion to $3.43 trillion, erasing all gains made since the start of 2025.
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Crypto analyst Ran Neuner warned that a modest pullback in equities could trigger further losses in digital assets.
With Burry doubling down on shorts and Buffett’s indicator flashing red, markets face mounting pressure heading into year-end.
Whether the tipping point comes from an AI bubble unwind, earnings reset, or a liquidity squeeze, both legendary investors appear to be preparing for a reckoning.
When some of the world’s greatest contrarians turn bearish, it may pay to heed their warnings before the bubble bursts. Therefore, crypto traders and investors must stay vigilant and conduct their own research.
Source: https://beincrypto.com/burry-buffett-market-risk-indicator/
