Michael Burry is weighing whether to part ways with some of his best-performing long-term holdings. In a weekend post on his Substack, Cassandra Unchained, Burry said he will consider selling, reducing or donating long-held stocks whose valuations have become stretched.
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He named Walmart Inc. (NASDAQ:WMT), Alphabet Inc. (NASDAQ:GOOGL) and Valero Energy Corp. (NYSE:VLO) as examples, along with “a few others like them.”
Burry credited secular trends for the gains in all three. He also said the bull market has given them plenty of support.
The to-do list closed out a lengthy study comparing today’s market with the run-up to the March 2000 dot-com peak. Burry examined 982 S&P 500 record closes going back to 1980 and scored each on seven measures of market internals.
Only two tops landed at or beyond the 95th percentile of weakness on every measure: March 2000 and the index’s Oct. 6, 2026 record.
Valuations look familiar too. Using his own adjusted earnings figures, Burry estimates the S&P 500 trades at about 32 times earnings, roughly in line with the 32 to 34 times multiple of 2000.
Busted Longs, AI Shorts
History offers a warning for stocks riding high. After the 2000 top, S&P 500 members trading within 10% of their highs posted a median decline of 33% over the next 12 months and 50% over 18 months, according to his data.
Stocks already down more than 40%, a group he labels “Busted,” rose a median 19% over the first year.
Burry has been building positions in those beaten-down names. He listed Lululemon Athletica Inc. (NASDAQ:LULU), PayPal Holdings Inc. (NASDAQ:PYPL) and Adobe Inc. (NASDAQ:ADBE) among current or recent holdings bought deep into their drawdowns.
Those longs sit opposite short positions focused on AI and semiconductor stocks.He described the portfolio as unhedged but set up to win directionally on both sides in a bear market.
Trimming Walmart, Alphabet and Valero would fit the same playbook. Capital freed from stretched winners could flow toward cheaper opportunities, and Burry says he has found several outside the S&P 500.
He has added international holdings, including Australian online retailer Temple & Webster Group Ltd. (ASX:TPW), and flagged U.S. small-cap value as worth a look. Build-A-Bear Workshop Inc. (NYSE:BBW), he wrote, now trades below a valuation threshold he calls IV15.
Burry pointed to the stretch from 1999 to 2007, when small-cap value stocks outperformed both small-cap growth and the S&P 500 as money fled the former large-cap leaders.
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Fully Invested … For Now
For now, he says he remains essentially fully invested given his sizable short book. Without it, he might hold cash. If attractive opportunities dry up, short-term Treasury money market funds would be his preferred place to park capital.
Burry did not say when, or whether, he would act on the three names.
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