06/11/2025
๐๐๐ฆ๐๐ฆ๐๐๐ซ ๐๐๐๐?
One man saw it coming much earlier - and was laughed at. While the entire world was in severe distress, his contrarian bet delivered ~๐๐๐% ๐ซ๐๐ญ๐ฎ๐ซ๐ง for his hedge fund investors in 2008.
The story is legendary and so is the man, meet ๐๐ข๐๐ก๐๐๐ฅ ๐๐ฎ๐ซ๐ซ๐ฒ, CEO of Hedge Fund Scion, the guy who famously bet against US subprime housing market.
Recently, Michael Burry ๐ฌ๐ก๐จ๐ซ๐ญ๐๐, ( bet against) Americaโs most loved tech stocks Nvidia and Palantir. His bet size ~$๐.๐๐๐ง.
Is this a signal
Let's look at the facts:
- Nvidia market cap ~ $5.0 Tn vs FY 2025 revenue $130.5 Bn.
- Many big tech stocks still trade at 30- 60x earnings - levels hard to justify long term.
- U.S. - China tensions dragging sales down. US blocking Blackwell chip supply , in turn China hitting back with a ban on foreign chips at state run data centers.
- The circular investments by tech companies in each other leading to valuation bubble.
๐๐ก๐๐ญ ๐ญ๐ก๐ข๐ฌ ๐ฆ๐๐๐ง๐ฌ ๐๐จ๐ซ ๐๐ง๐๐ข๐๐ง ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ:
Many Indian portfolios have unknowing indirect exposure to the U.S. tech rally through:
- US Opportunity Funds and other Feeder/FOFs (Funds of Funds) investing in Nasdaq-100 or U.S. blue chips.
- Direct U.S. stock holdings via LRS routes.
- Global ETFs in Indian brokerage accounts.
If this bubble deflates, Indian investors may face losses without realizing they were overexposed.
Practical ways to reduce risk:
- Re-balance U.S. heavy exposure in your mutual-fund portfolio - check if any feeder fund is majorly tech-skewed (U.S. Opportunities Fund, Nasdaq 100 Fund, etc.).
- Trim direct U.S. stock holdings and diversify into India / Asia centric funds.
- Avoid chasing recent AI-themed U.S. ETFs.
Burryโs bet reminds us - valuation must be based on fundamentals and not Fads.
Bottom line:
Michael Burry may or may not be early again , but ignoring valuation discipline rarely ends well. Itโs a timely reminder for Indian investors, diversification isnโt about chasing the hottest market, itโs about surviving the coldest correction.
Curious to here your take.
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