Michael Burry

This is a short Trading Post published into a strong AI tape, which Burry attributes mostly to CoreWeave's banner revenue. He does two things on the long side and four on the short side. He added to MercadoLibre at $1,850 and Zoetis at $73.60, saying both need no further elucidation and that he is very bullish on each — the same posture he has held on his non-AI compounders in prior posts. Everything else in the note is an escalation of the short book against the AI capex complex: more Oracle at $152, more Micron at $924, more Nebius at $247, and an addition to iShares Semiconductor ETF March 2027 puts struck in the low $400s.

The analytical content is entirely about Nebius, which he calls 'what the top of a boom looks like'. Rather than dismissing management, he quotes them at length and takes their disclosure seriously. Nebius says it closed four landmark deals in the quarter — with Reflection, Cohere, a scaled US new lab and a large US-based quant trading firm — averaging more than $1 billion each, at a yield of $20-25 million per megawatt on 1-3 year terms, with upfront payments covering 50-60% of the associated capex. It also says it could sell its entire 2027 capacity on those terms today but is choosing not to, because a second class of shorter-duration deals — up to six months, for customers with immediate time-bounded needs — is being negotiated at $40-50 million per megawatt and sometimes above.

Burry's inference is the heart of the post. Wholesale compute is priced in power terms because power is the scarce asset, and a longer contract should be cheaper per unit, not more expensive. Buyers paying twice the rate for six months rather than three years are placing enormous value on near-term use and very little on longer-term use. In credit and commodity terms, that is backwardation, and backwardation exists because the commodity is depreciating. Power does not depreciate — so either the GPU is depreciating, the customer is depreciating, or both. He is blunt that 'customers that would just not quit depreciating is what extended the bust 25 years ago', drawing the direct line to the telecom and dot-com unwind.

The accounting kicker is that Nebius extended its own server depreciation schedule this year from four years to five. In Burry's framing the company is simultaneously pricing its contracts as though roughly 50% annual decay is real and lengthening the period over which it charges that decay through the income statement. That gap between what the pricing implies and what the books assume is the short. He does not give a size or target for any of the positions, and he does not state a stop or invalidation — the implicit invalidation is straightforward, namely that the term structure normalizes and long-dated compute stops trading at a discount to short-dated compute.

This is a short, dated trade log rather than an essay, and it opens with the line that frames it: 'Today I added to my three largest shorts. But first I bought stock.' The long is Molina Healthcare, added at $198. Burry is explicit that this is not a new idea or a changed view — the position had simply fallen off in relative size because of his own capital movements, and the add brings it back on par with his largest positions. He reiterates long-term belief in the company and adds a light catalyst: the political season may be shaping up as a good one for Molina, which he frames as a potential upside surprise rather than the basis of the thesis. He points readers back to his late-December 2025 write-up, 'Molina Healthcare: Ghosts of GEICO Past.'

The short book is where the work is. He shorted more of the iShares Semiconductor ETF (SOXX) at $533, added to NVIDIA December 2026 and June 2027 puts at strikes in the low $100s, added to Palantir March 2027 and December 2026 puts also at low-$100s strikes, and shorted more Palantir stock at $175. He shorted more Caterpillar at $844 with a one-line rationale — 'Data center plans are already aging' — and shorted more Oracle at $145.

The Nvidia section carries the argument. Burry sets aside the debate over whether the $500 billion deal with Wall Street banks to raise capital for chip purchases is genuinely circular financing, because in his view that is not the issue. The issue is the pattern. He recounts late 2005, when Goldman Sachs was choking on a $3 billion synthetic RMBS CDS CDO it had been warehousing, looking like the house of cards might crash only months after he had put on his big short — until Goldman managed to sell it a week later and the floodgates opened to 2006, the year Merrill Lynch moved onto its balance sheet the risk that ultimately doomed it, as did many others. He also invokes Enron's effort to make wholesale power an investable asset class. Structuring credit, he allows, is a natural part of the system; structuring unnatural credits to prolong momentum late in the bull phase is where the worry begins. His dry summary of the prevailing mood: 'The proposal is to fail to embrace more debt here is un-American. Well, ok then. We will see.'

The Oracle add previews his next article and introduces the concept he calls the 'perimeter of debt' — a deliberately wider interpretation of liabilities. He argues these companies are expanding that perimeter through off-balance-sheet techniques and by reaching deep into their supply chains for non-cancellable long-term contracts, whipping the bullwhip as hard as they possibly can. That, he says, 'will hurt on the way back' — the same mechanic that makes Caterpillar vulnerable once data center plans stop being extended.

He closes with a technical overlay from BTIG's Jonathan Krinsky, whom he calls the most fundamentals-based technical analyst he has come across. Krinsky notes that dispersion has been extreme — high single-stock volatility against low index volatility — so there has been no correlation-1 selloff in a long time: by NYSE all-securities volume, this is the 182nd consecutive session without an 80%+ downside volume day, the longest streak in at least 30 years by nearly 50 trading days, and finishing 2026 without one would be unprecedented in a record where no year has had fewer than five. Burry concedes such a technical factor is easy to dismiss on its own, but says he has been writing about fundamental reasons for exactly this since November 2025, pointing back to 'The Blessed Fraud Recurrence' and the history of electrification. His takeaway is about duration rather than timing: in cycles this big, months or even years are nothing, and if something revolutionary is going to happen it will happen — over a long enough period for everyone to be right and almost everyone to go bankrupt. The practical rule he draws: avoid stepping into someone else's folly, and avoiding leverage is how you avoid the folly.

This Trading Post records a small number of trades built around one decision: it is 'time to re-establish' the Palantir put position. Burry has held half his PLTR common short since covering half near $107, but has carried no puts for a while. With implied volatility having come in hard — puts in his target range falling to levels not seen this year — he bought March 2027 puts struck in the low and mid $100s while the stock sits back at 69x sales. He points readers to his two principal Palantir pieces (Palantir's New Clothes, Feb 12; Palantir: An Accounting, Feb 19) and previews new work: after the latest earnings he finds PLTR reported ~$3.0 billion of GAAP net income over the past year while delivering 31.3 million shares to employees worth about $5 billion — roughly six times the GAAP stock-based-compensation expense, the widest such gap among the 66 companies he has re-worked post-earnings. He also flags that Palantir's off-balance-sheet, non-cancellable infrastructure purchase commitments have more than tripled this year, and concludes that considering commitments, liabilities and long-term competitive position, the shares are worth under $1 in the long run — with the nuance promised in Part IV of the Heretic's Guide and Part 3 of the Software & Securities Stocks series. He is also attempting, but has not yet executed, a first-time purchase of out-of-the-money Caterpillar puts, held back by wide spreads and his insistence on paying low implied vol.

On the long side he added to Zoetis in the low $70s, reprinting last Trading Post's case: since the 2021 peak near $250 the stock has traded 8.3x its shares outstanding and over 9x its float (5.1x float since late 2024, 2.8x since late 2025), meaning the weak hands have been washed out. Zoetis now trades at a discount to Elanco (~10x EBITDA and ~12x earnings vs ~15x and ~20x) despite far better free-cash-flow conversion, a cheaper balance sheet (4% of EBITDA to interest vs Elanco's 22%), 80%+ US gross margin and 66% operating margin against Elanco's projected 55-56% gross margin, and a ~2:1 research-dollar advantage. The 10-point YoY loss of US in-clinic dermatology share — only a third of which Elanco captured — is real but not terminal decline, and if a price war comes, Zoetis wins. He quibbles with the $124 buyback funded by the $2 billion 0.25% December 2025 convertible ($148.20 conversion, hedged with calls capped at $211.72 costing $187 million) but likes the buying at $90. Management would not commit to a 6-, 12- or 18-month US stabilization timeline; Wall Street's impatience is the opportunity.

The market section restates his structure work (Foundations, Mar 3 and Jul 31): plenty of cheap stocks, plenty of very expensive ones, and risks piling up in a setup he likens to 1987 — at much higher valuations. He teases a coming piece on the 'expanded liability perimeter': off-balance-sheet liabilities today put both 2000 and 2008 to shame, much of it driven by component inflation. He makes no imminent predictions but is positioned for step-function developments via his significant short book including QQQ and SOXX puts, while advising most investors to sell expensive, buy cheap, hold cash or short-term Treasury money-market funds. Coming out of a 2000-style episode, he argues, the fallen value stocks doubled and tripled 'entirely because price mattered again' — today price does not matter, and he believes he can already see the field from which many stocks will rise.

This is a straightforward trade-log post: five adds to existing longs, one increase to a short, and one add to puts. The framing is consistent with how Burry has been operating all year — let the market hand him a worse narrative on a name he already owns, then size up.

The largest block of reasoning goes to the GSEs and to Zoetis. On Freddie Mac, bought at $5.43, he explicitly points back to his December 2025 piece 'Fannie & Freddie, Toxic Twins No More No More' and to his July 10th follow-up 'Fannie, Freddie, Trump & The Housing Crisis.' The December argument was that privatization is neither automatic nor quick for common and junior preferred holders, and that if the companies do not go public they simply keep building capital reserves and shrinking their ERCF funding shortfalls — meaning there is little internal financial pressure to move the IPO up the President's agenda, and the entities get better capitalized the longer it is deferred. His conclusion then was that further delay does not destroy value while both grow book value at double-digit rates, even though sentiment would likely drive the securities down through an unproductive year. He now says that predicted lull has arrived and is the long-term investor's opportunity.

Zoetis, bought at $72.72 and described as a large position, gets the most detailed work-up, structured as a pair comparison against Elanco, a company he says he knows well from owning it when it was the out-of-favor half. The valuation inversion is the hook: Elanco now trades at roughly 15x EBITDA and 20x earnings while Zoetis — historically the favored name — trades at about 10x and 12x, despite better free cash flow conversion. The balance sheets are not comparable: 22% of Elanco's EBITDA goes to interest expense versus 4% at Zoetis. On competitive dynamics he concedes Elanco is winning a bit in the vet's office, but quantifies it against the narrative: Zoetis lost 10 points of U.S. in-clinic dermatology share year over year, and Elanco captured only about a third of those lost dollars, with the rest going to smaller competitors and category contraction — 'not a story of terminal decline.' In a price war, Zoetis's 80%+ U.S. gross margins and 66% operating margins beat Elanco's guided 55-56% gross margins, and Elanco is already guiding down with more leverage and less room. He also credits Zoetis with a ~2:1 research dollar advantage and a better historical batting average on returns and pipeline productivity. The criticism is capital allocation: buying stock at $124 with proceeds from the $2 billion December 2025 convertible (0.25% coupon through June 2029, $148.20 conversion) was probably too aggressive, though he expects it to look fine long term, and the $187 million of capped calls struck at $148.20 and capped at $211.72 sit in paid-in capital and will never hit the income statement. Repurchases at $90 earlier this year he has no quarrel with. The proximate cause of the discount, in his read, is management refusing to say whether U.S. stabilization takes 6, 12 or 18 months.

The three remaining longs get brief treatment. MercadoLibre at $1,812.39 was a top-off the day after earnings. lululemon at $127.45 is a continued accumulation. Fiserv at $51.93 comes with the observation that August of a transition year is the ideal time to accumulate, plus an unusual nod to sell-side confirmation: Mizuho called the bottom pre-market the day before and followed up arguing a second 2026 cut isn't necessary, with Clover strength making the ambitious Merchant two-year stack doable and easy Financial Solutions comps supporting an attractive 2H setup. Burry says he doesn't need the validation but was surprised enough to share it, and thinks the long-term setup is much better than the 2H one Mizuho describes.

On the short side he added to March 2027 SOXX puts struck in the low $400s and shorted more SOXX outright at $541, in both cases justified by the same technical point — the Semiconductor Index bounced hard off recent lows, and that bounce is what made the entry attractive. The implicit risk is symmetric: the semis short is a timing-and-level trade, so continued index strength works against both legs, and the long book depends on narratives (GSE privatization, Zoetis U.S. stabilization, Fiserv's transition year) resolving on a longer clock than the market is willing to grant.

This Trading Post is an interruption to Burry's larger project — he says he is in the middle of writing Part IV of the Heretic's Guide and describes it as a doozy — and the interruption happened because the research reached a point where he could not keep writing without putting on the trades. The framing is deliberately dismissive: shorting these names, he says, is like shooting fish in a barrel, because they all look similar and probably any single one would do. What he is having trouble getting his head around is not whether the shorts work but why so many companies came to share the same defect at the same time.

The defect is off-balance-sheet liability. He lists the forms it takes — backstops, uncommenced leases, purchase commitments — and argues the fish have gorged on them until they are very fat, very large, and easy to shoot. The specific 'inconvenient truth' he says he came across is uncommenced leases, some running as long as 11 years, amounting to 18x the company's entire sales. He is explicit that this is not an isolated case: the obligation is excused in the present as simply future growth, misinterpreted. His expectation is that scale itself becomes fatal — that it shan't be long before every last one keels over for lack of oxygen.

The positioning that follows is two new shorts, both put on that day. He shorted Oracle (ORCL) at $144.63, and Nebius (NBIS) in somewhat larger size at $211.77. He looked at puts on Nebius and passed: implied volatility is greater than 100% and the prices, in his words, do not make sense — so the expression is common stock.

The rest of the post handles three earnings reports on the long side, and the pattern is that he refuses to judge a company on a transitional quarter. Fiserv is down $2 to $52 against his $48 average; he calls the quarter not merely meaningless but the beginning of the kitchen-sink period for a brand-new CEO, notes that management emphasised underlying strength in the 84% of revenue still growing and Clover's 13% revenue growth, and expects more revenue damage from intentional acts as the CEO reviews costs and underperforming assets — so he added on the dip. Zoetis is up about $4 to $78 against his $83 average, with North American pet demand soft alongside the economy; he likes the new CFO/COO poached from GE HealthCare as an outsider bringing differentiated views, and frames the investment as buying market position and a high-ROIC research and marketing process below IV15 against a non-cheery consensus. MercadoLibre fell $140 to $1,782, still above his $1,611 average; net revenue passed $10 billion for the first time at +50% y/y with $683m operating income at a 6.7% margin, which CFO Martin de los Santos described as a deliberate choice to prioritise long-term engagement and scale over near-term profitability.

The MercadoLibre worry he addresses head-on is the credit portfolio, which grew 75% last quarter. He quotes Fintech President Osvaldo Gimenez explaining that cohorts older than three years are a small part of the book because issuance has accelerated, so the average portfolio simply needs more time to mature, and de los Santos adding that credit-card users are 2-3x more likely to become 'ecosystemic' — buying more on MercadoLibre and bringing more of their financial life into Mercado Pago. Burry reads that tension as the reason the price is available, with price/sales plumbing lows, and says he is very comfortable holding and will buy more at $1,500 or less. Flutter, which reported the day before, he had already added to, making it a full position. He closes with sizing: ADBE and JD are the largest positions, the next cohort down includes ZTS, FLUT and FISV, and MELI is a step below that for now.

This is a short, single-decision Trading Post built around Flutter's results and what they reveal about the U.S. online gambling market. Flutter reported that United States gambling EBITDA fell 70% to $119 million, offset by International EBITDA up 10% (4% organic) to $2.3 billion. Underneath that, U.S. revenue was down 6% and the sportsbook down 15%, while handle grew only 2% and promotional spend rose 140 basis points — the classic signature of an operator paying up to defend share. The company cut estimates on the U.S. weakness, which pushes full-year leverage from 3.7x to 4.3x, away from its 2.5x target, and Peter Jackson is stepping down as CEO after nine years, to be succeeded by Dan Taylor. The stock fell roughly $15 to near $90 and dragged DraftKings down with it ahead of DraftKings' own report the following afternoon, which Burry expects to miss for the same reason.

His diagnosis is that the cause is not consumer fatigue but a regulatory loophole. Prediction markets have, in his words, taken the gambling world by storm, with Kalshi now running $39.7 billion of annualized volume — 87% of it sports, even though the contracts can be written on nearly any real-world event. Kalshi, Polymarket and Crypto.com self-certify these contracts with the Commodity Futures Trading Commission and claim a federal exemption from gambling law, which is normally the states' domain. That exemption lets them escape state gaming taxes that can run as high as 51%, an enormous cost advantage over FanDuel and DraftKings. Notably, the incumbents have stopped fighting prediction markets directly — they are letting the states, which want those taxes, do the fighting — while both DraftKings and FanDuel move to leverage their existing customer bases and mindshare to launch prediction-market products of their own.

On the legal path, he cites prediction markets themselves: a 64% implied chance the Supreme Court agrees to hear a case on the legality, taxation and/or regulation of prediction markets by the end of this year, and a 36% chance it does not. He concedes the issue is neither black and white nor cut and dried, but his base case is that taxation and regulation arrive — enough, at minimum, to restore DraftKings and Flutter to their prior trajectory as online gambling matures. He notes the irony that in a society inserting gambling into every corner of life, two of the worst investments have been two of the largest online gambling operators.

Positioning follows directly from valuation rather than from the narrative. His IV15 for Flutter is $96, above the price the stock traded at after the drop; his IV15 for DraftKings is much lower than DraftKings' current price. So he sold his entire DKNG position and used the proceeds to more than double his Flutter stake, pulling his average cost down into the $98s — close enough to intrinsic value for what he describes as a low Castle/high Chapel business, which makes it a fat pitch and the only investment he needs in the space. He promises a fuller analysis later. The implicit invalidation is the legal one: if the CFTC self-certification exemption survives untaxed and unregulated, the incumbents' U.S. economics do not revert and the Flutter add is a value trap.

This Trading Post lands while Burry is finishing the fourth installment of his Heretic's Guide, a forensic pass through the Big Five hyperscalers' earnings and filings, and he says that work has already reshaped his portfolio. The market backdrop is a fresh S&P 500 all-time high, with the equal-weight index already there and the Nasdaq 100 still lagging. Citing Jonathan Krinsky at BTIG, he notes the index has surged 5% over four trading days into a new high only three other times: 21 March 2000 — effectively the top of the TMT bubble — 23 April 1999, roughly when the first wave of dot-coms began to crack, and 9 November 2020. His read is that a major top, possibly a 1987-style break, remains possible, but that new highs will still draw money in, so he is not fighting the tape blindly.

What actually matters, he argues, is the SOX and the momentum trade. Both were badly hurt in July and the question is whether they can resume leadership; a six-month, 30-minute SOXX chart shows momentum turning back up. Beneath that, though, the market's plumbing is still strained. The Goldman Sachs Momentum Pair Trade remains damaged after a historic run — and the series, which goes back to the GFC, shows how an extended pair trade eventually resolves — while the VIX/VIXEQ ratio sits at 12-year lows. That combination, he explains, means the pod shops and vol-targeting funds burnt in July are still licking their wounds even as a calm surface index volatility conceals substantial component volatility underneath. It is the same market-structure argument he laid out in his 31 July piece on volatility targeting and pod shops: falling headline vol mechanically forces vol-targeters to lever up and pulls other momentum strategies in behind them.

The trade log follows from that. He sold the Microsoft calls outright — he credits the gain to lucky timing and says his enthusiasm for Microsoft's quarter never matched the market's — removing his one bullish options expression. He rolled part of the NVIDIA December 2026 puts out to June 2027, sticking with low-100s strikes, and rolled a set of QQQ puts from January to February 2027 at a small credit with strikes in the high 500s on both legs. He sold the January Palantir puts without rolling them: implied volatility supported the position he held but made replacements too expensive, and he holds the other half of the Palantir short un-rolled for the same reason. He closed the Oracle January 2027 low-100s puts for a substantial profit and left it there, flagging that he may re-enter if volatility falls.

On the equity side he is standing pat: short SOXX, MU, NVDA, CAT, PLTR, TSLA and AMAT, all profitable except NVDA, and held through strong prints from Caterpillar and Palantir that lifted both stocks sharply on the day. He reiterates confidence in his multi-year assessment of these names but states the invalidation plainly — he will cut losses if they move against him — and repeats his standing caveat that shorting is not for everyone. All long positions are unchanged.

This is the free, abridged treatment of the Foundations essay Burry published on July 31, compressed to what he bills as market understanding and "air superiority" in under 1,500 words. It keeps the skeleton of the argument and drops most of the digressions, the autobiography and several supporting datasets.

He opens on the same statistic: 2011-2026 delivered a 12.09% annualized real total return with a dividend contribution of just 1.76%, the 1st percentile across 145 years. He then moves straight to the volatility study that the previous week's momentum unwind prompted. Glosten, Jagannathan and Runkle's 1993 Journal of Finance paper supplies the four parameters — omega as resting nervousness, beta as memory, alpha as the flinch, gamma as the asymmetric extra fear of loss — and running their formulas on the modern era versus 1985-2000 yields roughly 4x the chaos on a big down day, less next-day memory, and fear dissipating about twice as fast. Lo and MacKinlay's 1988 variance-ratio protocol supplies the second: a random walk returns 1.00, trending prints above, and today's market prints below, walking itself back, with moves inside any two- or three-month window increasingly cancelling out. Trading days are actually less volatile now (13.83% to 13.08%) while close-to-close volatility rose (16.64% to 17.50%), derived entirely outside exchange hours.

The abridged version keeps the punchline about the market's inhuman signature — more upset at small sell-offs than large ones, less forceful selling through the close, and the equal-weighted S&P showing little change, which localizes the bid to the concentrated cap-weighted indices — and states the conclusion directly: it takes a village of inhuman institutions to create a market like this.

The mechanism section is intact and is the reason to read it. Vol-targeting is reduced to one equation, Exposure = Target Volatility / Prevailing Volatility, with the convexity spelled out: vol at 5% implies 200% of assets, vol at 20% implies 50%. His scenario has a 2.5% drawdown lifting realized vol to 20% and forcing a cut from 77% to 50% of assets, while a subsequent -4% day trims only another 8 points. The platforms add the gamma: $400-500 billion leveraged through roughly 1,800 pods into several trillion in assets, over 30% of trading volume, crowded into the same trades. His worked example survives the edit — a $500m pod at 6x gross loses $25m, has half its capital pulled, re-levers at 4x, and unloads $2bn of exposure; fifty such pods would need a day and a half of every share traded in the index to clear. Because pod books run roughly half long and half short, the index can look calm in a week the Morgan Stanley Momentum TMT index falls 53.5%.

The closing sections compress the valuation case and the positioning. Over fifteen years the S&P spent only 1.96% of sessions more than 20% below a prior high against a 17.7% median since 1928, with no faster recovery among 1,215 comparable-drawdown blocks. Mean CAPE of 29.57 is the 100th percentile of 145 years of Shiller data, and his own estimate of 44.8-45.7x clears the 1999 record of 44.20. He points readers to AP SBC, D'AI of the Triffids, Heretic's Guide Part III, the March Market Structure piece and the July 23-24 posts. One notable difference from the full version: here he frames the reset condition as a 25% loss maintained over two years rather than the 400-day figure. Positioning is one sentence — long undervalued, out-of-favor securities, short highly valued momentum favorites — with the usual caveat that most people should not short.

Burry opens with the statistic that frames everything after it: over 2011-2026 the S&P 500 delivered a 12.09% annualized real total return, but dividends contributed only 1.76% — the 1st percentile across 145 years of 15-year blocks. Companies replaced the dividend — the only non-reversible component of shareholder return, he argues — with buybacks and RSU withholding: a cash transfer to employees invisible to earnings and to standard free-cash-flow math that often increases share count. That throws the whole return onto earnings growth, and therefore onto earnings quality, where his prior work lives.

The body is a volatility study prompted by July's momentum unwind and snapback. He disclaims ever using the Greeks, then borrows them from Glosten, Jagannathan and Runkle's 1993 Journal of Finance paper — omega as resting nervousness, beta as memory, alpha as the flinch, gamma as the asymmetric extra fear of loss that Fischer Black described in 1976. Run on 1985-2000 versus today, a big down day now triggers roughly 4x the chaos, with less next-day memory and fear draining about twice as fast. Lo and MacKinlay's 1988 variance-ratio protocol supplies the second finding: a random walk returns 1.00, trending prints above, mean reversion below. The old market printed 1.02; today it prints 0.881, z = -2.56 across 3,774 sessions.

Supporting facts sharpen it. Intraday volatility fell (13.83% to 13.08%) while close-to-close rose (16.64% to 17.50%), so the entire increase happened outside exchange hours. The S&P now closes at 0.154 of its daily range against roughly 0.09 in every decade since the 1980s, and 2%+ down days close in the bottom quarter of range only 81% of the time in the 2020s versus about 90% historically — evidence of something bidding the lows, and against forced deleveraging, which would sell through the close. The equal-weighted S&P shows no such change, localizing the bid to the cap-weighted indices. No human, he concludes, gets 4x as upset, buys the dip anyway, and recovers twice as fast. It takes a village of institutions.

He names the village. Vol-targeting funds — risk parity, CTAs, insurer annuity hedges, bank VaR desks — run Exposure = Target Volatility / Prevailing Volatility, a convex 1/x function. A 2.5% drawdown lifting realized vol to 20% forces a cut from 77% to 50% of assets, while a further -4% day trims only 8 more points — the violence is front-loaded. He sizes the pool near $500 billion against a $60 trillion market, but stresses it arrives at once in S&P futures. The platforms add the gamma: roughly $428 billion leveraged through 1,400-1,800 pods, over 30% of volume, crowded into one TMT-long/momentum-short book. His centerpiece example: a $500m pod at 6x gross loses 5% of capital on a 0.83% book move, is halved, re-levers at 4x, and turns a $25m loss into $2bn of forced turnover — 80x. Fifty such pods would need a day and a half of all Nasdaq 100 volume, where 99.77% of shares sit still.

Positioning follows. He is not calling a top — shocks now get repaired faster than ever — but names the condition: a 25% drop held more than 400 days, the 1987 template, enough to clear the pod shops and perhaps push the passive machine toward 6% bonds. Until then multiples ratchet: a 15-year mean CAPE of 29.57 is the 100th percentile of Shiller's 145 years, and his adjusted S&P CAPE of 44.8-45.7x clears the 1999 record of 44.20. He says watch long bonds, citing the 10-year at 4.7347%. His book mirrors the pod shops': long out-of-favor names that have based, short the AI narrative and the memory cycle.

This is a short, dense trade log posted the day after a violent unwind and same-day reversal in the Momentum Pair trade. Burry opens by flagging what is coming rather than what just happened: he is preparing a post on Microsoft, Meta and the other hyperscalers, pending the earnings and filings landing that day and the next, and says there is "a ton of material" with "lots of accounting maneuvers and poor earnings quality on display." In the interest of time he skips the analysis and runs straight through the trades.

Every action in the post is a buy or an addition; there are no sells. On the long side he added to DraftKings around $23.40, noting that together with Flutter it constitutes one of his larger positions. He added to Zoetis around $76 and to lululemon around $118, both now full positions. He groups all three under a single pattern: a basing or consolidation phase following a long fall. His reading of that pattern is that it represents turnover of shares into stronger hands, and he states plainly that he believes these three buys are "rather de-risked at these prices," at least for long-term holders.

The short side is expressed mostly through options and baskets rather than single-stock borrow. He added to QQQ puts expiring January 15, 2027 in the high $500s strike range, and to Nvidia puts expiring December 18, 2026 in the low $100s strike range. He shorted more Micron at roughly $880 and more of the semiconductor ETF SOXX at roughly $506. The pairing is deliberate: cheap, washed-out consumer and healthcare names against the most highly valued momentum favorites in semis and AI.

On market structure he is brief but pointed. The knee-jerk reaction to the previous day's Paired Momentum unwind has been to put the trade right back on. He calls the move a historic reversal, "even more so than what happened 26 years ago," and concedes that with so many oversold and overbought signals firing, a reversal was to be expected. But his verdict on the trade's durability is one line: "the legs, they look tired." He includes charts of the extreme moves in the popular long-momentum and short-momentum baskets, and jokes that there are more than two shapes of charts in the market — just not many more.

He closes by saying he is working on several articles and is not sure which will finish first, with a teaser that "we are dealing with a giant." The post carries no invalidation condition or price target; it is positioning ahead of the hyperscaler earnings work and ahead of the market-structure essay he would publish the following day.

This is a no-frills Trading Post covering a heavy day of activity, followed by a short essay on patience and a note on Palantir. Burry bought a number of stocks and sold short a number of stocks, and simply walks through them.

On the long side, he bought a decent amount of Flutter (FLUT) at $100.72 and DraftKings (DKNG) at $23.07. He explicitly frames the two together as a play against prediction markets, and says that added together FLUT and DKNG make one of his larger positions - a bet that the regulated sportsbook incumbents are being marked down on prediction-market disruption fears. He also added to his Molina Healthcare long at $197.02, without further comment.

On the short side he sold short more Caterpillar (CAT) at $893.49 and more Micron (MU) at $933.86, both adds to existing positions stated without separate rationale. The reasoning he does give attaches to Nvidia: he added to his NVDA short at $210.28 and continues to hold puts in good size, because he believes much of current and future demand is not driven by end customers or end demand. Much and possibly most is financed, off-balance-sheet and not lit, and future revenues are majority financed in a circular arrangement per the 2026 BIS annual report - the same evidence he unpacked in the previous day's Trading Post. He extended the same view across the sector by adding to his iShares Semiconductor ETF (SOXX) short at $535.83, which together with his puts he calls a large position. Three shorts he is holding without action: he has not covered Tesla (TSLA), noting it gets smaller all on its own; he remains short the Invesco QQQ Trust (QQQ) through puts; and he remains short Palantir (PLTR).

The middle of the post is a short meditation on patience. None of this works, he writes, if he is not patient with his well-researched theses. Patience is the single most difficult skill to master in investing and also the most impactful, because the more patience one has the larger a position can be. He warns against confusing patience with foolhardiness - a hardy fool is just a hardy fool - and cites Warren Buffett ruing his own impatience over an investment, telling shareholders they would have been better off if he and Charlie had just gone to the movies.

The Palantir note is the substantive news of the day, drawn from a Bloomberg story by Katrina Manson: a US government agency withdrew a bid to improve a military intelligence system central to lethal targeting after a protest from Palantir, complicating the Defense Intelligence Agency's effort to enhance an AI-enabled system used for worldwide military operations including targeting. Palantir's dozen-page May 18 protest, cited in a June 3 GAO decision notice reviewed by Bloomberg, argued the DIA was 'impermissibly seeking a developmental solution when a commercial solution is already available.' Burry notes the MARS program had advanced significantly since a damning 2020 GAO assessment and, per a DIA spokesperson, reached 'full operational capability' in March 2026. He calls it a disturbing little battle won by Palantir - the military forced to buy from Palantir despite already having a perfectly good system - and concludes that like every other enemy of the United States, Palantir will lose the war and should start getting used to having to fight for its food.

He closes with work in progress - Temple & Webster, Software Part III, MELI, Hong Kong Part III - and a recommendation of the New York Times Machine archive, searchable back into the 1800s, for perspective and new ideas.

This is a deliberately short post built around one document: 'Private Credit's State Backstop: How Private Equity Socializes Risk Through Insurers,' a 65-page academic paper by Andrew Granato and Pranjal Drall. Burry establishes their credentials - Granato an assistant professor at the University of Texas School of Law with a Stanford economics B.A. and both a Yale J.D. and a Yale Ph.D. in financial economics; Drall a Yale doctoral fellow pursuing both degrees - because the paper formalizes a subject he has been pushing since The Heretic's Guide to AI's Stars Part III (May 22) and building toward in the unpublished Part IV.

The argument runs through long quotations. PE firms have acquired large life insurers and loaded their balance sheets with private credit assets that are opaque and hard for regulators to value. When such an insurer becomes insolvent, state guaranty funds assess surviving insurers to cover the shortfall - and in most states those outlays are fully creditable against state premium taxes, so the taxpayer is the terminal loss-bearer. Burry starts with the endgame from page 30: a distressed insurer approaching receivership has every incentive to expand rapidly, selling more policies and hiring more brokers because premiums are cash now against obligations due later, effectively borrowing from lenders who will not check the borrower's distress. Meanwhile surviving insurers, whose assessments depend on recent premium volume, pull back sales precisely when the guaranty fund needs the assessment base most, so the bailout grows in the final days.

On the liability side comes 'shadow insurance': ceding policyholder liabilities to affiliated reinsurers under lighter regulation, whose balance sheets need not be disclosed on the cedent's, making it extremely difficult to judge whether reinsurer assets support the liabilities. The motive is structural. The biggest PE firms went public between 2007 and 2014, creating permanent pressure to grow AUM; a life insurer supplies a stable, fee-generating asset base that never has to be liquidated to pay outside limited partners, unlike a traditional fund's decade-long cycle. McKinsey calls this a 'virtuous flywheel.' Burry's version: when the asset manager wants an underperforming loan out of an affiliated private credit fund, the insurer becomes the convenient buyer at generous prices - and empirical evidence shows PE-owned insurers pay more for identical assets when the seller is an affiliate.

His own contributions are the visuals the paper lacks. He shows 16.6x leverage at the captive offshore insurer Athene Annuity Re - which is then leveraged again - and says he has seen mid double-digit leverage of 35x and more, versus the 30x that killed Long Term Capital Management in 1998. He charts the duration mismatch between the assets and liabilities, the same mechanism behind the 2023 failures of Silicon Valley Bank, First Republic and Signature Bank. He compiles regulatory data showing PE sponsors dominate Bermuda's captive insurance landscape, and traces private credit and insurance money through a recent Meta data center financing deal. Nikkei Asia's report this week on the hyperscalers' massive off-balance-sheet leverage is the other half of the join: software loans, real estate loans, data center loans and chip loans all find a home in Bermuda under the invisible shell, while ratings never move because the NAIC's post-2009 treatment lets below-investment-grade ABS qualify for minimum-risk capital if held at a steep enough discount.

The reckoning comes from rates. The 10-year closed at 4.68%, and with floating rates the rule across private credit and PE-land, higher-for-longer is the catalyst that ends the rabid can-kicking. No trades are stated here - this is thesis groundwork for the credit and AI-infrastructure short book rather than a Trading Post.

Burry's July 23, 2026 Trading Post has two halves: three buys, and an update to his AI circular-financing work using the Bank for International Settlements annual report. He opens on market structure. The globally popular Momentum Pair Trade - long the cohort of most positive momentum stocks while mercilessly shorting the most negative momentum stocks - has been the winning trade for the multi-strategy or 'pod shop' hedge fund model, which has been vacuuming up the assets earmarked for alternative baskets. He reproduces the chart he used in the July 8 Trading Post showing how extreme that crowded trade has become, and says it is still true and valid. His conclusion is that the other side of that trade is where the opportunity sits: he is vacuuming up cheap good businesses that are getting the short end of that stick, which he describes as, in a sense, shorting the pod shops by going long deep value.

Positioning follows directly from that. He added to his Tencent (0700 HK) long at HK$448.60, pointing back to his February 26 post Hong Kong Stocks: Structure and Strategy, which introduced Tencent as an all-time great compounder and argued Hong Kong stocks are in the dumps and have been for some time. He added to Meituan (3690 HK) at HK$87.60, a name he says he hid inside the May 25, 2026 Short Thoughts post - the same post in which he explains the volume indicators he uses, and which he applies to the Tencent chart shown here. In Australia he picked up a few more shares of Temple & Webster (TPW AU) at 5.00 AUD, with a full write-up on the company promised shortly.

The second half updates his July 8, 2026 Short Thoughts on NVDA, Neos, Hyperscalers, Jevons Paradox and Compression to reflect the BIS annual report released on June 28. He singles out Graph 13, 'Corporate credit is vulnerable to repricing on AI disappointments.' Its right-hand panel, Graph C, shows circular financing in the amount of many hundreds of billions of dollars accounting for the majority of both future spending and future revenue of the AI labs, hyperscalers and chip makers - what he calls the entire AI trifecta.

He then turns that against Nvidia's own defense. Back in November 2025 Nvidia rebutted circular-financing accusations by saying the strategic investments it made into its customers' businesses 'represent a minimum portion of revenue' already booked. Burry flags 'already booked' as the tricky part: it is a statement about the past. What the BIS shows on a forward basis, using announced multi-year commitments, is that circular financing is nearly 100% of chip makers' revenue - implicating a large part of Jensen Huang's GTC claim of 'visibility' to $1 trillion - and roughly two-thirds of the revenues and spending of the rest of the trifecta.

He closes by calling the coordinated effort to create the AI bubble stunning, and directs readers back to The Heretic's Guide to AI's Stars Part III: Tracepalooza & the Bezzle (May 22), the source of the two visuals he reuses here, which covers AI demand, captive offshore insurer financing, and the concept of compression. He highly recommends reading Part III in full. The report states no new short trades; the AI short book is context, while the actionable trades on the day are the three deep-value longs.

This is a Trading Post, the position-by-position trade log, with a Netflix valuation note attached and a longer market-structure section on what the VIX is failing to measure.

Netflix is the setup. The stock closed at $74 after peaking at $134.15 on June 30, 2025, and traded down dramatically after reporting earnings the prior evening. He flags the unusual content accounting, including three separate changes to how Netflix amortizes production expense, then applies his evergreen test instead: does the company produce content that lasts, watchable on repeat across generations? Disney and Pixar do, and Warner Brothers does with Harry Potter and a few others. Netflix, he argues, does not. His example is Suits, a 2011 show that became a 2023 streaming hit whose economics were captured by NBCUniversal rather than Netflix. His line is that Disney produces wine and Netflix produces milk. So Netflix is Chapel rather than Castle, and on his Chapel numbers $67.75 is about 1.6 times intrinsic value, which makes the stock Just Outside with the Fat Pitch in the low $50s. He points readers to his earlier piece D AI of the Triffids: Office Software Triage for the methodology.

The trades are three. He bought more December 2026 NVIDIA puts struck in the low $100s for pocket change, reasoning that NVIDIA remains expensive with significant margin and earnings risk over the next five years, and that with stock volatility minimal and the VIX holding in, the position could be bumped up cheaply. He sold half of his January 2027 Oracle puts struck in the low-mid $100s because the position had become too big after working, and he does not fall in love with options trades that go well; he kept half to maintain short exposure. And he added to DraftKings in the $25s with no change to the basic thesis, referring back to the July 8 Trading Post where he described the thesis and valuation and plotted DraftKings and Flutter on the All Map.

The closing section explains why none of this looks like stress on the surface. The VIX sits at 17.87 and appears calm, but VIXEQ, which measures expected volatility of S&P 500 constituents, has been running to highs, putting the VIX/VIXEQ ratio at data-set lows. The index is hiding more internal volatility than at any point since 2014, the signature of rotation. The Morgan Stanley TMT momentum pair, long the era winners and short its losers, peaked on June 22 at a level of 500 against the prior record of 246 from October 2002; the series spans the dot-com bust, 9/11, the GFC, Volmageddon and COVID. Crucially the 2002 record was earned on the short side, when former tech winners had fallen so far they became the momentum losers, while today the record is built on the long side.

Since June 22 the pair has fallen about 40% in eighteen sessions, the fastest unwind in nearly three decades, decomposing into 18 points of longs falling and 29 points of shorts rallying. In every prior unwind of even 25% the VIX traded between 23 and 28; in this one it never left the teens. The names doing the rallying on the short leg are the interminably declining stocks he writes about and owns, PayPal, lululemon, Fiserv and Sprouts among them. That is how the positioning follows: the rotation pays his cheap longs while suppressed index volatility funds long-dated bearish optionality on the AI winners. The view breaks if volatility normalizes upward and takes away the cheap puts, or if the momentum long leg simply resumes its climb.

A multi-topic note on three events of July 15, 2026: a private-equity bid for PayPal, IBM's largest one-day fall ever, and an HCA preannouncement, plus a Trading Postette and a closing essay on Ben Graham.

On PayPal, Stripe and Advent offered $60.50 per share against a $47.37 close. Burry calls it too low. The bid is 1.21x his IV15, and IV15 is what a minority investor would pay, with no control premium embedded. His true intrinsic value runs at IV8 to IV10, where IV10 is $75-$80 and IV8 is $110-$115, so a control bid should land near $100. With control of the cash flows and the businesses come many levers to raise value, so 21% over market is not nearly enough. He calls PayPal one of the cheapest quality businesses in the portfolio and is not selling.

IBM went from $312 on July 7 to $213 on the morning of July 14, down 26% at the lows and the worst day since at least 1968. He walks the history: a 50x-earnings Go-Go leader that unbundled software in 1968 to head off a 13-year DOJ case dropped as without merit in 1982; a 41.5% crash; a 58% decline in 1973-74 with no single day worse than 10%; 23% on Black Monday 1987; and 13.1% in February 2026 when Anthropic released a COBOL modernization tool.

The cause of the plunge is IBM Z. Software is $30 billion growing near 10% at 84% gross margin, consulting $21 billion at a 12% segment margin, and IBM Z is customer-owned mainframe hardware at 59% gross margin running 70% of the world transactional workflows. Clients diverted Z spend into commodity servers, storage and memory now forecast to be in shortage, and were distracted by the Mythos cybersecurity scramble. Z has always been the most volatile segment, swinging from 15% growth in Q1 to -7% in Q2, yet $67 billion of market cap vanished over a $700 million shortfall plus 5% software growth guidance, erasing 25% of the market cap of a company where Z is 8% of revenue. His falsification test is earnings season: SAP and IBM on July 22, Wipro July 17, Infosys and SK Hynix July 23, ServiceNow and Microsoft near July 29, Cognizant and Capgemini into early August, with Accenture the cleanest comp, in September. If nobody corroborates the diversion story, IBM becomes a show-me story at a single-digit multiple, roughly 50% below current.

He still did not buy IBM. A delta-E of 0.87 from stock comp at 2.6% of revenue cuts $10.8 billion of GAAP income to about $9.3 billion of owners earnings at roughly 12% ROIC and 21-22x, against an IV15 of $120, the midpoint of Castle $126 and Chapel $115, versus a $218.29 close. It is high Chapel rather than Castle: consulting and software face frontier models, as the Starbucks replacement story showed, while the COBOL moat and switching costs remain formidable and pension underfunding is only $2.3 billion. He contrasts IBM booking labor in cost of revenue with Palantir routing Forward Deployed Engineers into R&D and sales for an 80%-plus optical gross margin.

HCA, down $28 to $362 on its own preannouncement, he dismisses as the usual news cycle that periodically puts a ruthlessly efficient serial acquirer on sale; pullbacks to 10-12x owners earnings have always been buyable. He then added to four positions: HCA at $362, Sprouts at $75, Fiserv at $49.75 and Zoetis at $74. It closes with Graham recommending Computing-Tabulating-Recording in 1916 and being told its book value was water; his own process sets target buy prices regardless of label, then waits for the Fat Pitch.

This is a short community post, not research. On Sunday, July 12, 2026, less than eight months into Cassandra Unchained - 231 days, to be exact - Burry marks the moment the publication crossed 300,000 subscribers. He breaks the numbers down: 346,680 followers and 300,044 subscribers.

He describes the venture as new and intense, and says he is stunned and humbled by the community that has formed around it, singling out the Chats as lively and educational at any hour and the Discussions under every post as erudite and challenging. On the growth chart itself he makes a brief but characteristic observation: there is no parabola, and that is okay, and even comforting - a nod to the parabolic price action he spends most of his other posts warning about.

The audience composition is the one genuinely informative datapoint. Subscribers come from all 50 states and 212 countries, and 52% of them are based outside the United States. Burry says this does not surprise him, because when readers write to him it is rarely someone in the US. He closes by noting it is the middle of summer in the States, hot and beautiful, wishing readers a good Sunday, and expressing gratitude for the mutual respect he sees in every Chat and Discussion. The post also carries the standard Cassandra Unchained description: that the publication is now Dr. Michael Burry's sole focus, giving readers a front row seat to his analytical efforts and projections for stocks, markets and bubbles, often with an eye to history and its timeless patterns. No positions, tickers, prices or market views are stated.

This is the free, abridged version of Burry's CUSIP-level examination of Fannie Mae (FNMA) and Freddie Mac (FMCC), published two days after the paid piece. He begins by correcting a widespread misconception: the Twins are not currently sending profits back to the US government in any meaningful cash sense. Everything accrues to the Senior Preferred Stock liquidation preference while the capital stays inside the enterprises. That makes the equity a bet on one administrative decision. If Treasury affirms the SPS LP, the shares fall to the low single digits or lower. If it is deemed repaid, Burry sees them rising 3-4x initially and 6-7x in time, explicitly assuming the Treasury warrants are exercised and the dilution taken. Those warrants expire in September 2028, just before the next presidential election, and he expects action before then as Trump works through donors and unfinished business in a lame-duck year.

The nearest catalyst is Executive Order 14393, Promoting Access to Mortgage Credit, signed March 13, 2026, which gave the FHFA director 120 days to report on the efficiency of national housing finance markets - due right around the July 11 weekend. Bulls hope it recommends capping the Enterprise Regulatory Capital Framework at 2.5%, a dramatic cut in required capital. Burry damps expectations: there is no indication ERCF clarity arrives with the report, it may never be public, and it may already sit with the Administration. The SPS decision rests with Treasury and the President.

The body compresses his credit work. Trump's November 24, 2025 FHFA order raised 2026 combined multifamily purchase caps to $176 billion. Against that, he argues the housing shortage is a household-formation problem, not a building problem: a record 1 million apartments were under construction in July 2023 versus 901,000 in 1973, the pipeline never broke 500,000 units from 1975 to 2015, and the US holds a record 435 units per 1,000 people and 14 million more units than households. Persons per household fell from 3.39 to 2.53, so the marginal renter is a single earner with thinner income - a fragile cash-flow buffer beneath multifamily debt. Were one fifth of solo dwellers to pair up, he says every mainstream estimate would show the shortage eliminated.

The evidence comes from the mid-May ABS-15G data dump, the Twins' 10-Qs and Freddie's April 30 performance reports on six MBS programs. Freddie's multifamily volume rose 24% to $12.8 billion in 1Q 2026; Fannie's average loan went to $26 million from $18 million with full interest-only at 68% from 54% and LTV at 63% from 61%. Watchlist ratios run 13.42% to 23.58%. Multifamily serious delinquency is up 48% since December 2023, write-offs hit $243 million versus $61 million, liquidation losses 18.8% versus 10.4%, and provisions $277 million versus $24 million. Walker & Dunlop's 2025 10-K calls commercial real estate fraud systemic and no longer anecdotal, directly contradicting Fannie's claim, reported by The Real Deal on February 2, that its 193 fraud investigations in 2024 are now trending down. The two findings that matter: Fannie resolves 38% of repurchase demands against Freddie's 3%, showing no prioritisation of chasing fraud, and Freddie carries $15.5 million across 44 loans against an entity it lists as Unavailable.

Positioning is unchanged and constructive. The surfacing multifamily losses are not material next to roughly $29 billion of combined earnings, but their presence and trend change the urgency. An uplisting and SPS clarification require no conservatorship termination, and he closes by asking Trump to uplist and deem the SPS repaid before housing stress becomes the story. The thesis breaks if the SPS is affirmed, or if credit deterioration accelerates far enough to consume the earnings cushion.

This is the third instalment of Burry's GSE work, following December 8, 2025's Fannie & Freddie, Toxic Twins No More and March 26, 2026's The Toxic Twins Recurrence, prompted by a mid-May 2026 data dump. He strips the story to one variable. Investors obsess over an IPO or an exchange listing, but the dominant driver of the common's value is the Senior Preferred Stock liquidation preference, which grows in line with retained earnings. Today the Twins keep their earnings and the enterprises get stronger, yet common holders have no claim on that capital. If Treasury affirms the SPS LP the shares fall straight to the low single digits; if it is deemed paid off the stocks run perhaps 3-4 times today's price. He expects SPS clarification to precede any IPO, since the IPO cannot be marketed without it.

The macro spine is a contrarian read on the housing shortage. Trump's November 24, 2025 FHFA order raised 2026 combined multifamily purchase caps to $176 billion from $146 billion and directed the GSEs to hit those targets even into a shrinking market. Burry argues the market is shrinking for good reason: over 1 million apartments were under construction in July 2023 versus 901,000 in 1973, against a pipeline that never broke 500,000 units from 1975 to 2015. The US now has a record 435 units per 1,000 people and 14 million more units than households. What America has is an income-per-unit shortage, because persons per household fell from 3.39 to 2.53 and solo living drove about half of net household growth since 1960. The marginal renter is a single earner with fragile income - exactly the tenant base behind fixed-rate multifamily loans.

The evidence is forensic. Freddie's 1Q 2026 multifamily volume rose 24% to $12.8 billion with the pipeline up 41%, but the mix moved away from the affordable mandate: targeted-affordable fell from $3.7 billion to $3.0 billion and small-balance collapsed from $1.3 billion to $0.3 billion. Fannie eased harder - average loan size $26 million from $18 million, full interest-only 68% from 54%, LTV 63% from 61%. Freddie's published table shows CMBS watchlist ratios of 13.42% to 23.58% with essentially zero realized losses, which Burry tests against the 526-unit Solaris complex in Austin: a $50 million March 2024 loan now re-auctioning below $10 million. Walker & Dunlop's 2025 10-K discloses a $221.6 million repurchase requirement from borrower fraud including concealed flip transactions, and flatly contradicts Fannie's February claim, reported by The Real Deal, that fraud tips are trending down. Fannie's April 29 10-Q shows write-offs of $243 million versus $61 million and liquidation losses of 18.8% versus 10.4%.

The ABS-15G analysis yields two findings. Against covered pools of $2.235 trillion at Fannie and $669 billion at Freddie, demand rates are under a tenth of a percent and originator rejections are literally zero - every demand is deemed legitimate. But Fannie resolves only 37.9% and Freddie just 3%, with homebuilder captives at 45-67% versus non-banks at 20-40%, and $15.5 million across 44 loans owed by an entity Freddie lists as Unavailable. To Burry this is institutional decay from 17 years outside market discipline, consistent with administrative expense down 25% year-over-year.

Positioning follows: he stays long both names. None of the deterioration is material against roughly $29 billion of combined earnings, and the single-family guarantee franchise remains sound, so the bear case makes the bull case - it raises the urgency of getting private capital and management in. All that is required is an uplisting and an SPS announcement, neither of which triggers the January 2025 side letter's procedural sequence, and the warrants expire September 2028. The view breaks if Treasury affirms the SPS liquidation preference, or if credit deterioration escalates enough to threaten the capital build.

The July 8, 2026 Trading Post opens with methodology before it gets to trades. Burry restates the great tension in his valuation process: a low multiple is not necessarily a value. The Graham and Dodd roots are there, but his process since the 1990s has not hinged on a 1940 version of value. IV15 - the price at which he expects compounded annual returns of 15% over 15 years - is his benchmark buy price target, though a higher quality business can be a fat pitch above that mark and a lower quality business only well below it. IV15 is not a simple PE ratio. It comes from a discounted cash flow analysis that pulls from business quality and applies conservative adjustments to owners' earnings for stock-based compensation, bedeviled accounting and other factors. The DCF generally runs three stages, adds a fourth for inflecting growth companies, and adjusts for special cases including serial acquirers.

He points readers to where the method is laid out: D'AI of the Triffids: Office Software Triage (May 15) for the full treatment, and its ~1,500-word abridged version (May 17), which was the first post for which he wrote a shorter companion - he now writes abridged versions of everything, with the full versions carrying roughly 11,000 more words and additional visuals. He expanded the methodology again in Software and Payments Stocks Part II: Productivity Tools and Cybersecurity (May 28), where he added Synopsys (SNPS), Cadence Design Systems (CDNS), JFrog (FROG) and Samsara (IOT) to bring the Cassandra Unchained software and payments universe to 50 names, the SW50. He notes he sets alerts at IV10, IV12, IV15, IV18 and IV20 for every stock, that baseline intrinsic value typically sits between IV8 and IV10 depending on business quality, and that only below baseline intrinsic value are buybacks genuinely accretive to intrinsic value per share - above it, buybacks pull in shares while diluting intrinsic value per share, which he calls the depressing nuance of tech companies repurchasing stock at high prices to offset part of stock-based compensation. The All Map, a baseball-field visual, sorts companies into Fat Pitches, Just Outside and The Out Field by IV15 multiple, AICT Tier and Composite Score.

The trades: he bought Flutter Entertainment (FLUT) at about $107 and DraftKings Class A (DKNG) in the low $26s. Together the two are a full position, roughly 60/40 Flutter to DraftKings, and he may make each a full position later. Flutter is the world's largest online betting and gaming company, running FanDuel - the number one U.S. sportsbook - alongside Paddy Power and Betfair in the UK and operations across Europe, India and Brazil; it is an older business under a newer name that has only traded in the U.S. for two and a half years, so investors may not know it even though most Americans recognize FanDuel. He notes volume swelling at these lows on the chart, which he likes to see. DraftKings is U.S.-only online sports and iGaming built around a brand with huge mindshare.

The threat that created the entry point is prediction markets, which structure their products as swaps under the CFTC. As securities, event contracts are automatically available in all 50 states while avoiding state gaming taxes, and they carry no infrastructure of their own, riding on Robinhood, Webull and crypto.com. That volume hit has hurt both stocks. Burry believes the political climate will not tolerate a loophole adjacent to a heavily regulated and taxed industry, and that prediction markets will in time be subsumed into regulation and taxation; both Flutter and DraftKings have also launched their own prediction-market efforts. Both have expanded through acquisition; for Flutter his valuation assumes the focus is now debt paydown and buybacks, which the debt level should force, and he flags past capital misallocation against a fundamentally very good operating business with terrific scale. DraftKings he frames as inflecting, with the value in the operating transition he foresees in the near future. Both, he says, are great businesses at the core with very high returns on investment.

Finally, he bought more JD at $27.58, already one of his top three positions, on the view that the unwinding of the AI and memory mania in South Korea and Japan will benefit Hong Kong and Chinese stocks.

This Short Thoughts note is Burry's direct rebuttal to an anonymous missive a subscriber forwarded him, and it extends the depreciation argument he began in Unicorns and Cockroaches (November 26, 2025) and The Supply-Side Gluttony Recurrence (December 11, 2025). He opens by narrowing the claim: rentability was never his point and depreciation is not a bet on when a chip stops working. It is the recovery of capitalized sunk cost over a defined window of earnings at the frontier, set against terminal value. A chip can rent and still depreciate very fast economically. He never said A100s would stop functioning.

His proof that depreciation is a lever rather than a measurement is a paired accounting example. In early 2025 Amazon shortened a subset of server lives to five years from six, explicitly citing the pace of development, adding $677 million of expense across nine months. In the same quarter Meta extended its useful server lives to 5.5 years, reducing the depreciation hit to net income by $2.9 billion. Same hardware, opposite conclusions from two of the biggest. He adds Satya Nadella on the Dwarkesh Patel podcast - he did not want to get stuck with four or five years of depreciation on one generation - and Jensen Huang at GTC saying that when Blackwell ships in volume, you could not give Hoppers away. The biggest buyer and the biggest seller both concede the frontier moves faster than the schedules in use.

The forwarded missive tracks arguments CoreWeave CEO Michael Intrator has pushed at him for months across CNBC and Cramer appearances: five-year contracts, A100s fully booked, H100s coming off contract re-leased at 95% of the original price, customers willing to rent six to seven years. Burry says Intrator refuted himself at Fortune Brainstorm AI when he reframed circular financing as logistics against a physical bottleneck driven by policy, infrastructure and energy. Burry agrees with the bottleneck and inverts the conclusion: the constraint is deploying frontier chips, not redeploying old ones, so old chips are getting work they would never otherwise have received. Pointing at A100 rentals is pointing at the severity of the bottleneck.

The hard evidence is an Air Street Capital State of AI Report Compute Index study, reported by Analytics India Magazine: 100,128 Grace Blackwell GPUs deployed as of July 1 against an announced pipeline of roughly 1.66 million, with another 308,640 in installation. Hopper clusters remain the largest deployed systems; A100s cluster in research, led by Meta's 16,000-GPU Research SuperCluster. Installation-phase chips sit in Construction-in-Progress: NVIDIA booked the revenue, the buyer pays no depreciation. Deployed plus CIP is about 25%, leaving 75% as press release, and HUMAIN and Stargate Abilene are over 60% of that announced pipeline - sovereign projects that must clear financing, politics and construction. Against Huang's $1 trillion of visibility through 2027, Burry takes 94% unbuilt.

Positioning follows from the trilemma rather than from a stated trade. He is bearish NVIDIA and the hyperscalers: circular financing (an xAI SPV, some cash NVIDIA's own equity held off balance sheet) props up marginal demand, and hundreds or thousands of PE and private credit funds hold the resulting debt at mark-to-model - he points readers to The Unicus Investor's work on BlackRock TCP Capital. If Jevons paradox wins, hyperscalers borrow into a future that may not include them and become the new CLECs, writing down repeatedly. If compression wins, spending falls and NVIDIA suffers worse than a merely cyclical outcome. The bulls need a third door - permanent demand, spending that ends on schedule, and 5-6 year schedules proven correct. There is no third door.

This is a short, non-investment post: Michael Burry's July 2026 Charity of the Month selection for Cassandra Unchained. He names the Seva Foundation and calls it one of the most efficient and effective charities he has ever come across, pledging 5% of the publication's gross revenues during July.

The case he makes is arithmetic. Ninety percent of the world's blind population lives in low income countries, and ninety percent of that blindness is either preventable or curable. The leading cause is cataracts, which can be corrected in a roughly 20-minute surgery using about $50 worth of materials. What distinguishes Seva, in his telling, is that it does not simply provide funds from a distance: across more than 20 countries it works with partners to build self-sustaining local eye-care systems, which dramatically broadens reach at remarkably low cost. Its four main activities are Vision Centers (permanent local infrastructure), Technology (retinal cameras, handheld screening devices, ophthalmological tools), Eye Care for Children (screening, early detection and long-term follow-up), and Training and Job Creation (hiring and training ophthalmologists, support staff and community workers).

He stresses the pediatric angle: 90 million children live with vision impairment globally, and because 80% of learning is visual, poor sight limits education, causes social isolation, raises injury risk and creates barriers to employment. Last year Seva's programs reached 7 million people across 20 countries in South and Southeast Asia, sub-Saharan Africa and Latin America, plus the American Indian Sight Initiative in the United States. Against that, 2024-2025 revenues were only $10.3 million versus $12.6 million of program expenses, with the gap funded by drawing down program reserves in order to keep expanding services. Its $29 million of net assets are mostly fixed: buildings, equipment and technology installed over more than four decades.

On credibility, Burry notes Seva is headquartered in Berkeley, California, holds top ratings from Charity Navigator and CharityWatch, and is a Nicholas Kristof Holiday Impact Prize winner. He closes with the founding story: in 1977 Dr. Larry Brilliant, a World Health Organization physician, finished the work to eradicate smallpox; in 1978 he, his wife Girija, WHO physician Dr. Nicole Grasset, Harvard professor Ram Dass and the Grateful Dead's Wavy Gravy (Hugh Romney, Jr.) met in a Michigan conference room and resolved to eliminate avoidable blindness. Steve Jobs was an early donor. They named it Seva, Sanskrit for selfless service. Since 1978 the organization has helped 72 million people see. Seva is a 501(c)3 and contributions are tax deductible to the fullest extent allowed by law.

There are no tickers, prices, trades or market views in this post.

This trading post pairs one new short with five additions to existing longs, and Burry frames it with a line he repeats about the chip cycle: this time may be different, but not nearly different enough.

The short is Micron. He works from a chart of Micron's price from 1984 to the present with price/sales and price/tangible book in the upper panel, and the extension of the share price over its 200-day moving average in the lower panel. That extension measure, though volatile, has never been as stretched as it is in 2026, not even at the dot-com peak. Over 42 years Micron has had 34 drawdowns greater than 30%, which works out to a 30% swing a pinch too close to once a year. The fundamentals underneath are, in his words, terrible: a median ROIC of 4% and median ROE of 7% against a cost of capital well above 10%; ROA, ROIC and ROE negative in 32%, 31% and 34% of quarters respectively going back over three decades, meaning one quarter in every three Micron destroys capital; and free cash flow negative in 48% of quarters. He dismisses the sell-side focus on EBITDA margins as ridiculous for a business this dedicated to incinerating cash on big machines.

The behavioral layer matters as much as the arithmetic. Because Micron is the only pure DRAM play on a major U.S. exchange, it gets pumped too hard in good times and dumped too hard in bad ones. HBM is simply the newest product deemed precious in a long series of capacity-constrained cycles. He argues the six-month rally in all things chips, after three years of AI hype, is less a recognition of an actual shortage than the familiar late-cycle behavior of chip stocks rallying near bubble peaks. Micron's 700%-plus one-year gain, he says, exposes investors to a smorgasbord of Cialdini's psychological shortcuts: scarcity bias (sold out through 2026, the only memory pure-play), social proof (wall-to-wall coverage of AI gains), authority bias (52 of 57 analysts rate it buy with no sells, and President Trump endorsed the stock that day), and commitment bias (three years of AI gains finally reaching chip stocks). He connects this to his earlier essay Foundations: The Psychology of Investing in the Information Age, and situates the trade inside the AI thesis he has built over eight months starting with The Cardinal Sign of a Bubble: Supply-Side Gluttony, plus Unicorns and Cockroaches and The Heretic's Guide to AI's Stars Part III. He also notes Micron is no longer the lead steer in memory: South Korean capital expenditure plans basically dictate how much Micron must spend.

On evidence, his tables list every greater-than-30% decline with its peak, trough, drop size and 200-day extension. The key finding is that on the relatively few occasions when the extension exceeded 100%, a 30% fall within 12 months was nearly certain, an admittedly small sample at the extremes. The peak-to-trough crash has ranged widely but runs 2.6 months at the 25th percentile and 7.4 months at the 75th. Valuation seals it at 14.2x price/sales versus a 2.2x median, and he explicitly rejects P/E as a measure for cyclicals given the volatility of earnings. He shorted Micron at $1,051.87 the prior day, choosing the stock directly because the puts seemed expensive, and says he will look to add puts should the stock settle down and volatility come in.

The long side is the mirror image of the same framework. He added to PayPal at $45.31, showing PayPal's long-term price/sales and 200-day relative chart in the same format as Micron's. He added to Sprouts Farmers Market at $89.33, a name he had bought personally at a very low price but in small size and trimmed as it ran, so the fall lets him build a real position. He added to Zoetis at $74.80, calling it especially oversold much like Sprouts was, and arguing that the fundamentals of these two stellar companies will drive them forward and that they are the types of stocks that would pick up the shine from the AI theme. Finally he added to Fannie Mae at $6.15 and Freddie Mac at $5.69, noting the logarithmic long-term charts show where these used to trade across vastly differing circumstances, and that he owns both because in some scenarios Freddie trumps Fannie and he is not sure how it will play out. His third GSE post is coming soon.

This is a quarter-end trading post, and Burry opens with why the date matters. The ends of quarters are a time for window dressing, when funds around the world try to make their top positions look like the widely-acclaimed winners and sell down unpopular stocks that have recently underperformed. He believes June 30 is the most significant of these dates each year, probably because the mid-year statistics and portfolios anchor the fund-raising push into year end. He concedes he cannot prove this, only that it is what he has seen across 25 years of running money for others, during which he deliberately kept a light hand on such days so as never to be accused of window dressing himself. This June 30 is different: with his book positioned as it is, window dressing is not even possible, and he is instead trading against the day's trends.

The first action is an options roll. He moved his SOXX puts from January 2027 to March 2027 and lifted the strikes from the low-mid $300s to the low-mid $400s, gaining duration at what he describes as relatively cheap volatility. The case for pressing is technical and valuation-based. The Philadelphia Semiconductor Index sits at a historically high extension above its 200-day moving average, a level not seen since 2000; he notes that the SOX has reached the current roughly +65% extension only once before, in that same year. Bloomberg's price/sales history for the index does not run back through the 2000 peak to 1994, so he cannot make the direct comparison, but the current ratio is over 16x, and crucially, removing Nvidia from the index barely dents it. That is the core of the argument: this is not a single-stock story. He also shows the historical record of SOX drawdowns, observing that extension above the 200-day is not even a requirement for a 30% or greater decline, especially once a long bear market is in place.

His QQQ position needed no work. He calls the high $500s January puts perfect and left them untouched.

The surprise name is Caterpillar, which he says jumped out at him when he ran the same extension chart. He has never shorted Caterpillar before and notes it has always done great for him on the long side, which makes the entry a purely situational one. He shorted CAT at $1,060.98. He then shorted Nvidia at $198.09, SOXX itself at $642.80, Applied Materials at $729.40, and Tesla at $416.22, adding that he was happy Tesla jumped back to that level. He points out that not all of these names are part of the SOXX, and that SOXX itself is a pure form of overvaluation in an index, a form that is rarely seen and never so easily recognized as such.

The macro hook closes the post. He attributes the day's rally to big spending announced out of Korea, and interprets that not as demand confirmation but as the beginning of the end, consistent with his running supply-side gluttony framing of the AI capital expenditure cycle. His conclusion is that it is only a matter of time. The view would be invalidated if the SOX could sustain a 16x-plus price/sales multiple and its 2000-like extension above trend, or if the Korean capex wave translated into durable rather than glut-forming demand.

This is a memoir entry in Burry's Foundations series, prompted by an interview of Marc Andreessen conducted by his partner Ben Horowitz about the origins of Mosaic and Netscape. Listening to it stirred Burry's own memories of the pre-World-Wide-Web years, and the piece covers 1987 through the late 1990s, sitting alongside his earlier Foundations: My Summer of 1994 post.

He starts in high school, where he founded the Santa Teresa High School Computer Science Club and learned Turbo Pascal in a text-only MS-DOS environment. An IBM Thomas J. Watson Scholarship covered his UCLA tuition and guaranteed four summers inside IBM R&D at the Cottle Road and Almaden Research Center sites, the birthplace of the hard disk drive. His actual job was destructive testing: injecting contaminant into full head disk assemblies, recording when and where failures occurred, then disassembling the 14-inch golden ferric-oxide disks to find physical evidence. He earned $7.425 an hour against the $2.85 he had made pumping gas, and worked nights, weekends and holidays specifically for the time-and-a-half and double-time. His bench had an IBM 3270 terminal on VM/CMS; he logged data on graph paper and analyzed it in APL on a special clunky keyboard, learning matrix math a year before he formally took the course. He also absorbed how IBM worked: 18 levels of management, a 10,000-person, 190-acre campus run by a third-level manager, and CEO Akers addressing employees by closed-circuit television. At one point his failure results were literally flown to Akers while white-haired managers watched over his shoulder.

With his summer cash he built PCs, hunting newspaper ads and buying parts for cash from sellers at San Jose industrial parks and loading docks, where a 20MB drive that retailed for $400-$500 could be had for $250. Assembly was anything but plug and play: IRQ conflicts, DRAM that had to match the motherboard and the 286 or 386 CPU, VLSI and OPTi chipsets, DIP switches, jumpers, parity errors, and memory optimization via autoexec.bat and config.sys. The point of all that speed was the Wildcat bulletin board system on the 7th floor of Sproul Hall at UCLA, where he and other students played a non-live space war strategy game against players scattered across northern Europe, and where he also tracked the stock and futures positions he had bought with leftover summer earnings. By 1991-1992 he had a 60MB drive and more DRAM, but networking had become easy and therefore less interesting, and pre-med took over.

The last act runs through Vanderbilt Medical School: Mosaic in his first year, Netscape by the second, and, after his father died in his third year leaving him about $50K, the launch of sealpoint.com, branded The Market Wizard, built first in HTML, then HoTMetaL, then CorelDraw. Having just read Roger Lowenstein's Buffett biography, he published his portfolio and stock discussions, started the Value Investing thread on techstocks.com in 1996, rebranded to valuestocks.net, wrote for MSN Money, and won Forbes Best of the Web awards in 1999 and 2000 before founding Scion Capital. He reproduces his short January 2000 Ross Stores (ROST) write-up, which he links to his recent lululemon athletica (LULU) piece.

There are no trades in this post. The investment content is in the two closing observations. Returning to Silicon Valley in 1998 for medical residency, he found the IBM Cottle campus a ghost town; it was later sold to Hitachi, scraped, and redeveloped as mixed residential and retail. That disappearance of something so huge and vibrant heavily informed how he read the 1998-2000 bubble while working on Sand Hill Road. He also unearths a notepad file dated September 12, 2000 containing his first look at WorldCom, scribbled while reading form 10s, in which he was a skeptic from the start because after adding back all acquisition costs the company was not near earning its cost of capital. He calls that a timeless theme for doomed companies: today the spending is massive capex rather than acquisitions, but the question remains what the ROIC will be.

This is the free, abridged version of the June 24 deep dive on lululemon, condensing the same argument into a tighter form. Burry frames LULU as a company whose shareholders have suffered through an extraordinary run of own goals: the 2011 'Who is John Galt' shopping bags that offended its core base of liberal 25-45 year-old women; the 2013 discovery that the flagship yoga pants were transparent, followed by Chip Wilson telling Forbes 'you don't want certain customers coming in'; gross margins cratering from nearly 56% to ~48%; and a Trump-era law on overseas operations that cost another 250 basis points. That five-year malaise ended when Calvin McDonald became CEO, gross margins returned to all-time highs above 58% within a year, and the stock reached $160 by September 2018 - quadrupling the 2014 low.

He argues today's turmoil mirrors the 2010s, and calls that a good thing. The current troubles began in 2024 with new leggings featuring an unflattering seam and transparency when stretched, compounded by fumbled color and size inventory and a management vacuum awaiting a new CEO at summer's end. Tariffs are hitting gross margins by 280 basis points, and the removal of the US de minimis exemption is worse in the short run because LULU must ship all e-commerce from Canada. On May 27 the company settled founder Chip Wilson's proxy fight, seating two of his directors.

The historical analogy is Ross Stores, which he bought at ~7x earnings in October 2000 when he opened Scion Capital and everyone else was gaming the next TMT rally; ROST compounded at 20.76% for over 25 years, double the S&P's 10% and ahead of Microsoft's 12%. He overlays the charts and notes their similarity up to that red line, arguing LULU's position next to 'stocks for bubbleheads' is the same setup. China remains the bright spot but is dimming, with constant-currency growth slowing to 13% from 19%, not helped by the Japanese war drum used at a Great Wall yoga event with 2,000 guests - another own goal followed by a halfway apology.

On the brand, he dismisses ALO and Vuori as incremental threats benefiting from base effects and influencer spend, noting Vuori skews male and lifestyle rather than performance and that at least 95% of LULU customers shop neither; LULU leads on retention and dominates its customers' athleisure spend. He adds the political overlay: LULU's college-educated, $100k-plus, urban female 25-45 customer is per Pew the most left-leaning cohort in retail, the Federal Reserve finds the partisan confidence gap exceeds income, age and education combined, and Democratic sentiment sits near 32 against 87 for Republicans - so if even 150-250bp of comp weakness is political, competitive pessimism is misplaced.

The valuation section drives the positioning. Tangible book per share has doubled from $20 to ~$40 even after buybacks well above book; at $105 the stock is ~2.5x tangible book, lowest since 1Q 2009, and it is the only US clothing retailer below both 3x tangible book and 10x earnings. With over $2 billion of pre-tariff operating income, $1.5 billion net cash, 108 million shares (down from 145 million) and $1 billion of buyback left against a ~$12 billion market cap, he sees a spring-loaded franchise. IV15 is $155.81 for a P/IV15 of 0.72x, putting LULU alongside Adobe at about IV18 and an expected ~18% CAGR; he added the prior day at an average price of $124.65. The caveats: not all IV18s are fat pitches, only 2 of 32 analysts are positive, and the stock is down 31% since Heidi O'Neill - criticized for Nike's DTC execution - was named CEO, arriving only on September 8.

This is a short position-by-position trading log rather than an argued essay. Burry frames the day around Hong Kong, where stocks are falling hard because the semiconductor narrative is pulling capital out of Hong Kong and into South Korea and Japan. Momentum chasers are doing part of it, but he also points to dedicated Asian equity funds that can easily reallocate, and says the effect is plain in the charts of the Hang Seng versus the Japanese TOPIX and the Korean KOSPI. The result is that China's leading companies have been pushed back down near their lows and their charts are broken, which he concedes can continue. His key judgment is that this is a feature of the global semiconductor mania and therefore largely technical pressure, not fundamental.

Acting on that, he sold Alibaba purely to harvest a tax loss and used the proceeds to buy more JD, adding at $24.79, and says he expects to buy Alibaba back and to buy more Meituan and Tencent as well, since these names generally track each other in the short run. Outside Asia he opened a new position in Microsoft December 15, 2028 LEAP calls at strikes in the low $700s, explaining that he regards $350 as the good level to buy Microsoft common but found the long-dated calls inexpensive. He added to Fiserv at $47.55 and to Adobe at $195.11, both names he has flagged as deeply discounted to his intrinsic value framework. On the short book, he covered half of his Palantir short at $107.15 while continuing to hold puts, taking down risk without abandoning the bearish position.

Burry opens by cataloguing lululemon's history of self-inflicted crises, because his argument is that today's collapse rhymes with an earlier one that ended in a quadrupling of the stock. Crisis one was 2011, when founder Chip Wilson, an Ayn Rand devotee, printed 'Who is John Galt?' on tens of thousands of the company's shopping bags and offended the progressive, mostly female 25-45 year-old core customer; Burry had his wife buy one and framed it. Crisis two was 2013, when the flagship yoga pants proved transparent and Wilson blamed women's bodies on Bloomberg TV and told Forbes 'you don't want certain customers coming in.' Gross margins fell from nearly 56% to ~48%, an overseas tax law under Trump's first term cost another 250 basis points, the CEO carousel spun, and the stock languished five years - until Calvin McDonald arrived, margins returned above 58%, the stock broke the 2013 high in March 2018 and hit $160 by September 2018.

Today's version is nearly identical. The 2024 Breezethrough leggings had an unflattering seam and stretched sheer and were pulled in July 2024; color and size inventory was fumbled; four earnings calls have failed to address it; and there is no permanent CEO until Heidi O'Neill arrives from Nike on September 8. Chip Wilson's proxy fight was settled May 27 with two of his directors on the board. On the June 4 call, interim co-CEO Meghan Frank detailed a 330 basis point product margin decline, 280bp of it tariffs, and Burry stresses that the de minimis repeal is worse in the short run because e-commerce must now ship from Canada. Q1 revenue was $2.5 billion, comps -2%, North America comps -6%, with China Mainland up 30% (13% comps, 8 points of it a Chinese New Year shift) even after lululemon used a Japanese war drum at a Great Wall yoga event and had to half-apologize. Guidance calls for flat to -1% full-year revenue, a 410bp Q2 gross margin decline and 500bp of SG&A deleverage.

The historical analogy is Ross Stores. Burry overlays ROST's chart into October 2000 - when he opened Scion Capital and bought it at ~7x earnings while everyone chased TMT - onto LULU's chart today, calling them doppelgangers. ROST went from $1.82 to $227.42, a 20.76% CAGR over 25 years, double the S&P's ~10% and ahead of Microsoft's 12%, with store count up only 5.6x; the rest was margin expansion, multiple expansion and buybacks. He also cites Abercrombie & Fitch, American Eagle and Urban Outfitters as proof that buying beaten-down branded apparel works.

On the brand, he dismisses ALO and Vuori as incremental threats - Vuori skews male and lifestyle, ALO leans on expensive influencer marketing, and at least 95% of LULU customers shop neither - and cites Lawrence and Lozanski's 2014 Canadian Review of Sociology paper on lululemon folding empowerment into consumerism. He adds a political overlay: Pew says LULU's cohort is the most left-leaning in retail, the Federal Reserve finds the partisan confidence gap exceeds income, age and education combined, and Michigan sentiment is ~32 for Democrats versus 87 for Republicans, so 150-250bp of comp weakness may be sentiment, not share loss.

Positioning follows the valuation: tangible book per share has doubled to ~$40, the stock at $105 is ~2.5x tangible book (lowest since March 2009) and under 10x earnings, uniquely so among US clothing retailers, with $1.5 billion net cash, 108 million shares and $1 billion of buyback left. His IV15 is $155.81, a 0.72x P/IV15 that puts LULU alongside Adobe at about IV18 and an expected ~18% CAGR. He added the prior day at an average cost of $124.65. The acknowledged weak spot: O'Neill ran Nike's stumbling DTC push, the stock is down 31% since her appointment, and the thesis is entirely execution-dependent.