Michael Burry is worried about an abrupt, violent stock sell-off triggered by volatility-focused hedge funds. The famed investor pointed to automated funds that re-lever when market volatility changes. Michael Burry laid out fears of a harrowing scenario for US stocks driven by something that he says not many are looking out for. He pointed to the recent plunge in momentum stocks as an example of how such a scenario could unfold. Burry laid out several scenarios where volatility-focused funds could stoke large, sudden drawdowns in stocks, given how leveraged some funds are.