Why this young investor sold it all—even after riding the AI wave

A 25-year-old investor recently posted on the Stocks subreddit that he has sold his entire portfolio, including heavy-hit tech winners like NVDA (Nvidia), AVGO (Broadcom) and GOOGL (Alphabet). His reason? He believes the market now carries too many risks and is dangerously overvalued.

He revealed that after buying Nvidia at around $101, he rode the artificial-intelligence boom to solid gains. Yet, despite the strong performance, he decided to exit everything. “I have SOLD IT ALL because I fear that it might crash because of all the uncertainty and overvaluation,” he wrote. Although his portfolio had gained around 12% this year, he felt that the risk of holding outweighed the reward.

In a parallel vein, legendary hedge-fund manager Michael Burry—famous for his role in forecasting the housing-market meltdown—appears to be winding down his firm Scion Asset Management. A filing with the Securities and Exchange Commission shows the firm’s registration status was terminated as of Monday, which suggests he is returning investor capital and possibly shifting to a different structure (such as a family office). 

A circulated letter attributed to Burry indicates that his “estimation of value in securities is not now, and has not been for some time, in sync with the markets.” That dovetails with his recent public commentary warning about what he sees as a bubble—especially in AI-themed stocks. 

It’s worth noting that even though the SPX (S&P 500) has climbed around 75% since a post of Burry’s simple “sell” message on Jan. 31 2023, he has stuck to his contrarian view. 

In one of his latest moves, Burry disclosed massive put‐option bets against both Nvidia and another AI‐focused company, PLTR (Palantir Technologies). According to filings, the notional value of the puts is hundreds of millions of dollars—underscoring his belief that the sky-high valuations of AI stocks could be in jeopardy. 

From the perspective of our young Reddit investor: he saw winners, but he chose to step aside rather than stay on, driven by fear of a crash. That mindset—“I made money, but now the risk is too high to stay”—is increasingly echoed by other cautious voices in the market.

What lessons could be drawn here?

• Even strong winners don’t guarantee safety if valuations run too high.
• The psychology of being invested and then deciding to exit because of fear is a real twist in market narratives.
• Big names (like Burry) signaling concern tend to raise red flags for many retail investors.
• Portfolio timing and conviction matter: making gains is one thing, deciding when to leave is another.
• The question of “when valuations outpace fundamentals” remains front and centre.

Ultimately it’s not just about riding the rally—it’s about having the courage to walk away if you believe the next leg is perilous.

FAQ

Q: Why did the young investor sell everything despite gains?

A: He judged that the market’s uncertainty and high valuations made the downside risk too large, even though he had already earned a profit.

Q: Which stocks were included in his exit?

A: Among the holdings that were sold were top performers like Nvidia, Broadcom and Alphabet.

Q: What does Michael Burry’s move signal?

A: His firm deregistering with the SEC, plus revealed bearish option bets against AI stocks, suggest he too believes a market correction (or at least major rerating) is coming. 

Q: Does this mean the entire tech/AI sector is going to crash?

A: Not necessarily. It means some investors believe valuations are stretched and risks are under-appreciated. Others may still be bullish, but risk tolerance and timing become key.

Q: What should retail investors do in light of such sentiment?

A: It depends on their goals and risk tolerance. Some may choose to reduce exposure, diversify, or hedge; others may stay invested longer but with smaller positions or tighter risk controls. The key is being comfortable with the risk you’re taking.

Q: Is it too late to invest in AI now?

A: “Too late” depends on your investment horizon and tolerance. If valuations are indeed high, future returns may be muted and volatility increased. If you’re confident fundamentals justify the hype and you can hold through volatility, then perhaps not. But caution is warranted.