Michael Burry spent the bulk of his career running a hedge fund...
Yet last November he closed it to sell a newsletter for $39 a month.
You know his name because of that trade.
In the mid-2000s he bet that American house prices would fall, back when almost nobody on Wall Street thought they could.
And when prices collapsed in 2008, Burry made a fortune… and he will be forever immortalized with Christian Bale gifs
But his track record as an investor since then? It’s more Jimmy Buffett than Warren Buffett
In 2010 he jumped on the dollar devaluation hype and went long gold… which then dipped 50% in the next 5 years…
In 2020 he shorted Tesla and called its valuation ridiculous… the stock jumped 731% that year.
On February 1st 2023 he tweeted one word - Sell… weeks later he admitted he was wrong to say it, and the SPY has doubled since then.
Right once, spectacularly. Wrong in public many times since.
Now look at what he does today…
The fund is gone, and in its place sits a Substack called Cassandra Unchained, named after the Greek prophet nobody believed.
It’s ranked #2 in Substack's entire finance category, and he’s raking in somewhere between $3m and $5m/year. Nice work if you can get it.
But a doom business needs doom.
It needs bold calls that cut against the grain, because nobody pays $379 a year to be told to hold an index fund or be long Google.
Which brings me to his current favourite... Lululemon.
Now his largest holding… it’s fallen around 52% this year and slipped below $100 for the first time since 2018 after Friday's earnings.
Burry is doubling down and telling his readers he will buy more under $100.
None of this makes Burry stupid, it means his job changed.
He is no longer paid to be right over a multi-year period… he is paid to be interesting this week. Those are different skills, and his subscriber list tells you which one pays better.
I would rather have a strategy where no single prediction has to come true for it to work. Where the edge sits in the mechanics, rather than the forecast.
More on that tomorrow…
Oliver
P.S.
Cassandra was the prophet who was always right yet no one believed her. Burry left out that she didn’t charge $379 a year.