Michael Burry warned that stocks at new highs could be a “bull trap,” but is holding back on adding shorts; about 10% of his portfolio is in puts, with most of the rest in longs and LEAPS. He has moved his Fannie Mae and Freddie Mac common shares into junior preferred stock, betting that a government resolution of Treasury’s roughly $388 billion senior preferred liquidation preference could lift returns four to five times from current levels. He expects a favorable resolution within two years, though he said the delay made him “antsy” given a deteriorating multifamily housing situation. FNMA and FMCC have fallen for seven straight weeks, down 68% and 69% year-to-date, respectively.
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Related tickers and likely impact
SPY
• NeutralSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/12/2026 | 778.10 |
| Change that session | -0.06% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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