Jul 4, 2026
There’s a feeling of déjà vu in the air — and it’s making one of the world’s most famous contrarian investors deeply uneasy.
Michael Burry, the investor who became a household name after accurately predicting the U.S. housing collapse in 2008, has issued a stark warning about the current state of global equity markets. Burry — who was also the inspiration for the 2015 film The Big Short, which dramatized his prediction of the subprime mortgage crisis — says the market’s long-running rally is about to end, and a significant correction could be on the way.
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For Canadian investors holding equities — whether inside a Registered Retirement Savings Plan (RRSP), a Tax-Free Savings Account (TFSA) or in a non-registered portfolio — his warning is worth taking seriously.
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‘The market has jumped the shark’
In a post on Substack, Burry said he was gripped by a powerful sense of déjà vu when watching recent market behaviour.
“With what is happening in the market the last week, that I had lived this before suddenly dawned on me,” he wrote. “The NASDAQ 100, complete reversal. … I am calling something. The market has jumped the shark.”
Burry says what concerns him most is the near-total fixation on a single narrative: AI.
“Absolutely non-stop AI. Nobody is talking about anything else all day,” Burry wrote after listening to financial radio coverage on a long drive. “Stocks are not up or down because of jobs or consumer sentiment. They are going straight up because they have been going straight up. On a two-letter thesis that everyone thinks they understand ... Feeling like the last months of the 1999-2000 bubble.”
It’s a pattern Burry says he’s seen before — one that ended badly.
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The boy who cried wolf — or Cassandra?
Burry freely admits his record is mixed. He compared Bitcoin to the housing market in early 2021. Three months later, he issued warnings of a massive bubble and an impending market crash he said would be the worst in history.
Neither of those specific crashes materialized on the timeline Burry predicted, and he acknowledged as much in his post.
“I am now a meme for the number of times I have called a crash,” he wrote. “I have become the boy who cried wolf. History is written not by the victors, but by those that control the pen, and social media has that pen right now, it seems.
“Still, I got it right in 2000, got it right in 2007. Got it right in 2019, helped by COVID, and I called the meme stock crash in mid 2021. I called the bank stock run in 2023.”
Burry isn’t alone
Burry isn’t the only market veteran sounding the alarm. On May 7, 2026, hedge fund billionaire Paul Tudor Jones told CNBC that the current environment reminded him of 1999 — the last strong year before the dot-com crash.
While Jones said he expects the current rally to last another year or two, he worries about how extreme valuations could become before the inevitable correction.
“Just imagine the stock market went up another 40%,” Jones said. “The stock market GDP is going to probably be good lord 300%, 350%. You just know that there’ll be some ... breathtaking kind of corrections.”
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Why this matters for Canadian investors
It would be easy for Canadian investors to dismiss this as an American concern. It isn’t.
The Toronto Stock Exchange (TSX) Composite has its own significant technology component, and most Canadians who invest in broad-market exchange-traded funds (ETFs) — common building blocks in RRSP and TFSA portfolios — hold substantial U.S. equity exposure. Popular all-in-one ETFs such as XEQT or VEQT, widely held by Canadian retail investors, allocate roughly 40% to 45% of their assets to U.S. equities, which are heavily weighted toward large-cap technology companies.
History offers a cautionary note. When the dot-com bubble burst in 2000, the TSX Composite lost approximately 50% of its value from peak to trough — a decline comparable to the NASDAQ’s. The geography didn’t isolate Canadian investors.
A correction of the scale Burry and Jones are describing would ripple through Canadian portfolios whether or not the trigger originates here.
What Canadian investors can do now
The goal isn’t to panic-sell, but rather to invest with clarity. Here are some principles worth revisiting:
Review your asset allocation. If your RRSP or TFSA is heavily weighted toward equities — particularly U.S. large-cap tech — consider whether your current allocation still matches your timeline and risk tolerance. Contribution room in registered accounts, like your TFSA or RRSP, is too valuable to risk losing by putting all your eggs in one basket.
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Use your TFSA wisely. Losses inside a TFSA don’t generate a capital loss you can use to offset other income, and lost contribution room from a decline isn’t immediately recovered. It’s important to preserve capital if your timeline is short.
Diversification is more than geography. It also means asset classes. Fixed income — such as Government of Canada bonds, GICs or bond ETFs — can reduce portfolio volatility even if the return drag feels frustrating during a bull market.
Don’t try to time the market. Even Burry acknowledges his timing has been wrong before. Selling everything to wait for a crash that may not happen — or may arrive two years from now — can cost more in missed gains than the eventual decline. Dollar-cost averaging into diversified, low-cost ETFs through regular RRSP or TFSA contributions remains one of the most resilient long-term strategies for Canadian investors.
Talk to a registered adviser. If Burry’s warning has you reconsidering your strategy, that conversation is worth having with a qualified financial adviser — one registered with the Canadian Investment Regulatory Organization (CIRO), the self-regulatory organization overseeing investment dealers and mutual fund dealers in Canada.
-With files from Melanie Huddart
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Chris Morris is a veteran journalist with more than 35 years of experience at many of the internet's biggest news outlets. In addition to his activities as a writer, reporter and editor, Chris is also a frequent panel moderator and speaker at major conferences, including CES and South by Southwest.
