Tag: David Trainer

Michael Burry earned a whopping $800 million by shorting the U.S. housing market ahead of the 2008 financial crisis. Whether the famed investor has made comparable money since then is far less clear. Still, his reputation endures. Investors continue to closely track his high-profile bets, hoping to ride his coattails to similar gains.

Burry ran the hedge fund Scion Asset Management and now publishes commentary through a weekly newsletter, though he discloses little about performance. He has also repeatedly deleted and reactivated his X account over the years, but remains active on the platform, where he has roughly 1.6 million followers and frequently posts cryptic market takes.

His celebrity status was cemented by the 2015 film The Big Short, which turned Burry into a household name. That visibility has granted him a level of credibility few investors retain for so long, even when their predictions miss the mark.

“People like superstars, and they love to listen to folks who they think are smart and successful,” Tom Sosnoff, founder of investment media network Tastylive, told Observer. “He is a personality and a contrarian. He is interesting and pretty famous in the world of finance. Love him or not, people listen to him.”

While Burry’s early success is well documented, his performance since then is harder to evaluate. As a hedge fund manager, he is only required to disclose limited information through quarterly filings such as 13Fs, which reveal long equity positions but not short positions, derivatives or overall performance. As a result, the full picture of his gains and losses remains largely opaque.

There have been claims that Burry has made more than $1 billion in total trading profits, but those figures have never been independently verified, and his fund has never been publicly audited.

Nvidia and Palantir in the crosshairs

Despite the uncertainty around his track record, Burry’s words still move markets. His recent bearish bets against Nvidia and Palantir have drawn particular attention, with Burry arguing that both sit at the center of an A.I.-driven market bubble.

On Nov. 3, regulatory filings revealed that Scion had placed roughly $1.1 billion in bearish options positions tied to those companies. The structure of the trade—largely long-dated put options—gives him time for the thesis to play out rather than requiring an immediate downturn.

“His timing was very good,” said Sosnoff. “He pretty much got short Nvidia near the top (around $200), and it’s now down 10 percent to 15 percent. It’s a good call.”

Palantir, which represents Burry’s largest short at roughly $912 million, has not fallen as sharply. The stock is down about 7.8 percent from its Nov. 3 level. Still, because the position is structured with options expiring in 2027, some analysts say it’s far too early to judge.

“His logic is extremely good, and he has over a year to be right,” David Trainer, CEO of A.I.-driven investment research firm New Constructs, told Observer.

Trainer, a former hedge fund manager, also backed Burry’s broader critique of A.I. hyperscalers, arguing that companies such as Oracle and Microsoft are using aggressive accounting practices, particularly around GPU depreciation, to flatter earnings.

“These companies are definitely using questionable billing and receivables to make their earnings look better,” said Trainer. “I can’t say if Burry has been right or wrong in previous trades, but I think he has made some money. “This time [with the A.I. Bubble], he seems right.”

The cult of the contrarian

Not everyone is convinced. Matthew Tuttle, CEO of Tuttle Capital Management and a frequent contrarian himself, said Burry’s post-2008 track record is far less impressive than his reputation suggests.

“When you look at the calls Burry has made since 2008, they have not been good,” he told Observer. “He has said ‘this is going to crash and that is going to crash’ many times since, and he hasn’t been right.”

Still, big bearish bets tend to attract attention precisely because they go against the grain.

“Any time someone makes a major down call, there’s a fascination with it as long [bullish] calls are always okay because the market always goes up,” said Tuttle.

That dynamic helps explain why hedge fund stars can remain influential long after their best trades are behind them.

“If I’m the main character in a movie and in a book like Burry and have been right in a big way, that buys me a lot of getting things wrong,” added Tuttle.

The same dynamic applies to other market personalities such as Robert Kiyosaki, Peter Schiff and CNBC’s Jim Cramer, whose reputations often outlast their accuracy.

“Robert Kiyosaki is constantly calling a bear market, and he is wrong, and Peter Schiff has been calling gold up for a long time,” said Tuttle. In Schiff’s case, it eventually worked—but more because of timing and luck than brilliance.

“When you say gold is going to go up every year, and one year it does well, does that make you a genius? I would argue it doesn’t,” he added.

Fame as financial fuel

Wall Street is full of one-hit wonders whose early success grants them enduring influence.

“Most of the time, they don’t risk their money,” said Sosnoff. “If they have one big win one year, they’re set. Their reputation is made.”

John Paulson, who famously made $15 billion betting against subprime mortgages, fits that mold, as do figures like Ralph Acampora, who called the 1990s bull market, and Paul Tudor Jones, who predicted the 1987 crash.

Other famous short sellers have stumbled. Jim Chanos, known for shorting Enron, closed his Kynikos fund in late 2023 after his Tesla bet went wrong. Bill Ackman lost roughly $1 billion betting against Herbalife in 2018, despite previously scoring a massive win betting against mortgage insurers during the financial crisis.

Ultimately, fame often matters more than accuracy.

“We live in a world where celebrities (movie, social media) have megaphones, and Michael is a celebrity because of the movie,” NYU Stern professor Aswath Damodaran told Observer. “Put simply, I will wager that most people who follow his advice (good or bad) are doing so because they liked the movie, think he is Christian Bale or like Batman, rather than because they read his treatises on Nvidia or Palantir. “

That doesn’t mean Burry lacks insight. “Michael actually is a good macro thinker and often willing to break away from the herd,” Damodaran added. “But so are many other smart investors who never get noticed.”