The investor argues current price, not entry point, determines future gains even after steep declines.
Michael Burry illustrated how a stock dropping from $100 to $5 can still generate a 6x return for investors. He emphasized that once a position is deeply underwater, the original purchase price becomes irrelevant, focusing instead on the stock’s current valuation and potential recovery to $30 intrinsic value.
Burry, known for predicting the 2008 housing crash, has recently warned of market bubbles, particularly in AI-driven stocks like Nvidia and Palantir. He closed his Scion Asset Management fund in November 2025 to concentrate on his Substack, Cassandra Unchained, where he shared this perspective.
The example highlights a scenario where a stock falls to $10, then to $5, yet retains long-term upside if the underlying business remains viable. Burry’s stance contrasts with typical investor behavior, which often leads to panic-selling during sharp declines.