Big Short prototype Mike Burry issues a warning with a chart: For the first time, American household stock net assets surpass real estate, marking the third historical crossover!

“Big Short” prototype Mike Burry posted a tweet last night with an image, directly pointing to a major shift in American household asset structure: the proportion of stocks (red line) has surpassed real estate (blue line) for the first time! Over the past 70 years, this “red surpassing blue” has only happened twice—after the “Beautiful 50” bubble in the late 1960s leading to stagflationary bear markets, and after the dot-com bubble in the late 1990s, when the Nasdaq halved 78%. Now, for the third time, Burry seems to be sounding an alarm.

But this time is different: the real productivity revolution brought by AI far exceeds the early internet. More importantly, looking at the Federal Reserve’s wealth distribution chart, you’ll find that stocks surpass real estate not at the end of a bubble, but as a standard feature of the wealthy’s asset structure! The poor rely on houses and cars to “maintain face,” while the rich make money through stocks and equity. The fundamental gap in wealth is essentially a gap in asset allocation.

In-Depth Analysis of Burry’s Chart: Stocks Surpass Real Estate for the Third Time

The chart released by Mike Burry (Federal Reserve data, 1951-2025Q3) shows the comparison of two major categories in U.S. household total assets:

• Red line: stock assets (direct holdings, mutual funds, retirement accounts like 401K/IRA, etc.)
• Blue line: real estate (mainly net value of primary residence)

Three historical moments when “stocks surpassed real estate”:

1. 1966-1968: The Beautiful 50 era, peak of growth stock bubble. Followed by the 1970s stagflationary long bear market, with actual stock returns negative for ten years.
2. 1998-2000: Dot-com bubble peak, Nasdaq at 5000 points. Then the bubble burst, index fell 78%, taking 15 years to recover to the high.
3. 2025 now: The third crossover, with stock net assets officially exceeding real estate, totaling over $50 trillion.

Burry posted this chart to remind us: historically, such extreme asset allocations have been accompanied by major bubbles and subsequent corrections. But the background this time is fundamentally different:

• The first two were purely speculative concepts (overvalued Beautiful 50, unprofitable internet companies)
• Now, AI has been practically applied: enterprise adoption skyrockets, productivity data shows real improvement (McKinsey report: AI could add $13 trillion annually to the global economy)
• Stock market profitability is strong: giants like Magnificent 7 have abundant cash flow, record-scale dividends and buybacks

Therefore, we cannot simply “stick to the old ways”—this may be a structural transformation rather than a mere bubble.

Wealthy Asset Allocation Chart: The Rich Get Richer by Relying Less on Real Estate

According to the latest “Consumer Financial Survey” (SCF 2025) by the Federal Reserve, household assets are divided into 7 layers based on net worth (Wealthier households mainly own financial and business assets):

Key conclusions:

• The poor’s wealth “dies” in physical assets (houses, cars): low liquidity, slow appreciation, easily affected by interest rates
• The rich’s wealth “lives” in financial assets (stocks + business equity): compound interest snowball, strong cash flow

Top wealthy individuals’ real estate share is often less than 10%. They don’t rely on “flipping a house,” but on capital markets and corporate growth.

Why the “Stocks surpass real estate” trend might be a good thing this time?

1. AI revolution is truly happening: Unlike the “eyeballs economy” of 1999, AI is now deeply embedded in enterprises (Microsoft Copilot, Google Gemini enterprise version, etc.), with data supporting productivity gains.
2. Household wealth structure upgrading: Americans are shifting from “real estate dependence” to “equity participation,” which is actually an improvement aligning with the wealthy’s asset allocation.
3. Fundamentals support the stock market: corporate profits hit record highs, buyback scale reaches trillions, and the interest rate environment is turning accommodative.
4. Upgraded historical experience: the previous two bubbles and corrections were brutal, but after adjustments, they both ushered in longer bull markets (1982-2000, 2009-2021).

Of course, risks remain: if AI progress falls short of expectations or Fed policies change again, adjustments could come. But in the long run, embracing quality stocks remains the best choice.

The Biggest Revelation: The Key to Wealth Freedom is Asset Allocation Transformation

• Common misconception among ordinary people: pouring most money into real estate (high leverage, low liquidity, heavy taxes)
• The secret of the wealthy: putting money into productive assets that generate income (stocks, index funds, business equity)
• To leap social classes: wages + houses are not enough; you must learn to invest in capital markets

Now, American households are generally completing this transformation—stocks surpass real estate, not as a sign of doom, but as a awakening of wealth consciousness. We should follow suit: reduce consumption assets, increase productive assets, especially high-quality targets in the AI era.

What’s the current stock proportion in your family’s asset allocation? Share in the comments~ A. Mainly real estate (>70%) B. Stocks have surpassed real estate C. Gradually shifting to stocks/funds D. Mainly cash, still observing

If the direction is right, time will help you. Take one step at a time—but don’t go the wrong way!