Michael Burry says it’s ‘useless’ to grade his past year of market calls — and we ‘should all cut ourselves some slack’ in 2026

“It’s not close to long enough,” he added, pointing to the celebrated value investors profiled in Warren Buffett’s essay, The Superinvestors of Graham-and-Doddsville, who collectively experienced three consecutive years of losses in the 1970s. Other prominent value investors struggled during the dot-com bust in 2000 before the market eventually reversed course.

Burry also pointed to unusually bleak consumer sentiment as evidence of the extreme conditions investors have faced this year.

“2026 has been the worst year for consumer sentiment on record, going back to 1952,” he wrote, likely referring to the University of Michigan’s consumer sentiment index, which plunged following the outbreak of war with Iran.

Against that backdrop, Burry urged investors not to be too harsh on themselves for their recent performance.

“We should all cut ourselves some slack for what has gone right and wrong over the last year,” he wrote.

The challenge of trying to beat the market

Perhaps the biggest irony in Burry’s argument is that the stock market has held up remarkably well this year, despite the Iran war, renewed inflation and a bond market selloff that pushed Treasury yields to their highest levels in more than two decades.

The S&P 500 has gained more than 11.5% this year and remains within 3% of its all-time high, according to Bloomberg data. Even October’s market volatility, particularly for tech stocks including Nvidia, Alphabet and Intel, did relatively little damage to the index, which declined just 0.9% for the month.

Some of the world’s largest hedge funds weren’t nearly as fortunate. According to Bloomberg, Marshall Wace’s Eureka hedge fund lost 5.4% in October, while ExodusPoint Capital Management fell 2.4%. Millennium Management’s multistrategy fund and the equity-focused North Rock each declined 2.3%.

For all their resources and sophisticated trading strategies, professional money managers can still struggle to outperform a basic index fund. Investors who simply tracked the S&P 500 have earned double-digit returns this year without having to pick individual winners.

And October was hardly an exception. According to S&P Dow Jones Indices’ SPIVA U.S. Scorecard, 67% of actively managed domestic large-cap equity funds underperformed the S&P 500 in the first half of 2026. In 2025, 79% underperformed the index.

Their track record is even worse over longer time horizons. More than 83% of actively managed large-cap funds underperformed the S&P 500 over the 10 years ending June 2026, per S&P Dow Jones data. Over 15 years, more than 90% underperformed.

Why Burry is asking for more time

Burry has faced criticism for his repeated bearish market calls, despite his enduring reputation for betting against the U.S. housing market before the 2008 financial crisis, as depicted in “The Big Short,” both the book and the movie.

He acknowledged being out of step with the market in October 2025, when he announced plans to close his hedge fund, Scion Asset Management.

“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 letter to investors viewed by Reuters.

Burry has since continued to warn about an AI bubble, arguing that some of the biggest technology companies are overstating their profits by spreading the cost of expensive computing equipment over many years. He has questioned whether AI servers and Nvidia (NASDAQ:NVDA) chips will remain useful for as long as companies’ accounting assumptions suggest.