{"id":36881,"date":"2025-11-14T00:39:13","date_gmt":"2025-11-14T00:39:13","guid":{"rendered":"https:\/\/www.duck9.com\/blog\/?p=36881"},"modified":"2025-11-13T20:39:50","modified_gmt":"2025-11-14T00:39:50","slug":"day-12-burry","status":"publish","type":"post","link":"https:\/\/www.duck9.com\/blog\/day-12-burry\/","title":{"rendered":"Day 12. Burry"},"content":{"rendered":"
\n
\n
– The post theorizes Michael Burry’s Scion shutdown stems from his view of an AI-fueled bubble, where hyperscalers like Meta and Microsoft inflate earnings by extending server depreciation periods from 2-3 years to 5-6 years, potentially understating $176 billion in expenses through 2028.<\/div>\n
\"image2.png\"\"image3.png\"\"image4.png\"<\/div>\n
<\/div>\n
– Burry’s October 27, 2025, liquidation letter explicitly cites misalignment between his security valuations and market prices, echoed in his November posts critiquing accounting practices and invoking his Big Short experience as a parallel to impending repricing.<\/div>\n
<\/div>\n
– Closing the $155 million fund frees Burry from fiduciary constraints, allowing personal positioning against the bubble’s burst\u2014supported by media analyses confirming hyperscalers’ depreciation extensions since 2020, which could reverse AI narrative gains and compress multiples by 2026. <\/div>\n
\"image1.jpeg\"<\/div>\n
<\/p>\n
\n
Why I Think Michael Burry Is Shutting Down Scion Now<\/div>\n
<\/div>\n
Let\u2019s put a few things together\u2026Burry\u2019s liquidation letter, his depreciation thread on the hyperscalers, and his \u201cme then, me now\u201d Big Short meme and he\u2019s basically spelling out one story.<\/div>\n
<\/div>\n
He thinks we\u2019re in an earnings inflated, AI driven bubble that a value investor can\u2019t sit inside without eventually getting crushed.<\/div>\n
<\/div>\n
In the letter he says it plainly \u201cMy estimation of value in securities is not now, and has not been for some time, in sync with the markets.\u201d That\u2019s not a I\u2019m tired of running money line. That\u2019s a man saying, I can\u2019t reconcile what I see in the numbers with the prices the market is willing to pay. When someone like Burry reaches that point, the logical move isn\u2019t to keep collecting fees and hope it mean reverts. It\u2019s to get out of the structure that forces you to play the game at all.<\/div>\n
<\/div>\n
Then you look at his post on depreciation. He\u2019s saying the biggest beneficiaries of the AI boom that includes META, GOOG, ORCL, MSFT, AMZN of juicing earnings by quietly stretching the useful life of servers and GPU rigs that are really on a 2\u20133 year technology cycle. Extend the life in the accounting model, and you cut today\u2019s depreciation expense. Cut depreciation, and EPS looks 20\u201330% higher than it would under a stricter assumption. He\u2019s saying that the market is paying premium multiples on numbers that are, in his view, structurally overstated.<\/div>\n
<\/div>\n
Put that together with the \u201cme then, me now\u2026 it worked out, it will work out\u201d post, and he\u2019s clearly casting himself as the same guy who sat in front of a wall of subprime prospectuses in 2005. Back then, he saw engineered AAA paper built on bad collateral. Now he sees trillion dollar market caps built on AI capex and accounting choices he thinks will blow up 2026\u20132028 as the depreciation math reverses.<\/div>\n
<\/div>\n
SO WHY SHUT DOWN SCION NOW? MY HIGHEST PROBABILITY READ IS THIS<\/div>\n
\"image5.png\"\"image6.png\"\"image7.jpeg\"\"image8.jpeg\"\"image9.png\"\"image10.png\"\"image11.png\"<\/div>\n
He expects a major repricing in the very stocks that dominate the indices and he doesn\u2019t want to live through the last, craziest stretch of the bubble with other people\u2019s money tied to his name.<\/div>\n
<\/div>\n
If he\u2019s right about the under depreciation, then over the next few years earnings growth for the hyperscalers should slow sharply or even go negative just as the AI narrative cools and the cycle matures. When that happens, multiples compress, passive flows that are overweight those names work in reverse, and the broad market takes a hit because the \u201cMagnificent Few\u201d are the market. From his perspective, that looks less like a normal correction and more like the equity version of the housing unwind: a long stretch of fake comfort, then a sharp break when the math can\u2019t be hidden anymore.<\/div>\n
<\/div>\n
Closing the fund accomplishes a few things at once. It lets him step aside before that break, so he\u2019s not fighting client redemptions or daily benchmarking while he\u2019s trying to hold deeply contrarian positions. It frees him to short or sit in cash on his own terms, without regulators and LPs looking over his shoulder. And it sends a signal: if valuations are this disconnected from what he thinks the true earnings power is, the most honest thing he can do as a fiduciary is hand back the money and say, I don\u2019t want you in this.<\/div>\n
<\/div>\n
So, in my view, he\u2019s not walking away because he\u2019s done with markets. He\u2019s stepping off the stage because he thinks the show has turned into something he\u2019s seen before: a late cycle mania, powered by flattering models and aggressive accounting, that ends with a long, grinding reset in stock prices especially at the top of the index. @michaeljburry<\/div>\n

<\/p>\n\n\n\n\n
 <\/td>\n<\/tr>\n
 <\/td>\n\n\n\n\n
<\/a><\/td>\n<\/td>\n\n\n\n\n\n\n\n\n\n\n
EndGame Macro<\/a><\/b><\/td>\n<\/tr>\n
\u2066\u202a@onechancefreedm\u202c\u2069<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/tr>\n
Why I Think Michael Burry Is Shutting Down Scion Now<\/p>\n

Let\u2019s put a few things together\u2026Burry\u2019s liquidation letter, his depreciation thread on the hyperscalers, and his \u201cme then, me now\u201d Big Short meme and he\u2019s basically spelling out one story.<\/p>\n

He thinks we\u2019re in an earnings pic.x.com\/0UKScngWvp<\/span><\/a><\/td>\n<\/tr>\n

 <\/td>\n<\/tr>\n
11\/12\/25, 10:16\u202fPM<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n <\/td>\n<\/tr>\n
 <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/a><\/div>\n


<\/p>\n

\n
WordPress\u2019d from my personal iPhone, 650-283-8008<\/a>, number that Steve Jobs texted me on<\/span><\/div>\n

<\/span><\/div>\n
\n
https:\/\/www.YouTube.com\/watch?v=ejeIz4EhoJ0<\/span><\/font><\/div>\n

<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

– The post theorizes Michael Burry’s Scion shutdown stems from his view of an AI-fueled bubble, where hyperscalers like Meta and Microsoft inflate earnings by extending server depreciation periods from 2-3 years to 5-6 years, potentially understating $176 billion in expenses through 2028. – Burry’s October 27, 2025, liquidation letter explicitly cites misalignment between his […]<\/p>\n","protected":false},"author":1,"featured_media":36882,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-36881","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/36881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/comments?post=36881"}],"version-history":[{"count":0,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/36881\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/media\/36882"}],"wp:attachment":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/media?parent=36881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/categories?post=36881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/tags?post=36881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}