Michael Burry of ‘The Big Short’ is now a full-time writer. Here’s why he and other investors put pen to paper.
Michael Burry, renowned for his pivotal role in predicting the 2008 financial crisis as depicted in “The Big Short,” is shifting gears from hedge fund management to writing. He recently announced the launch of his Substack newsletter titled “Cassandra Unchained,” where he intends to express his views on current market trends, particularly focusing on the frenzy surrounding artificial intelligence and major players like Nvidia and OpenAI. Burry’s transition to writing is not entirely new; he began his journey as a value investor while maintaining a blog during his medical studies, underscoring his long-standing passion for analytical writing. In his own words, Burry stated, “I do not speak well, but writing and analysis go hand-in-hand,” highlighting the importance of written communication in clarifying his investment philosophies and decisions.
Burry joins a distinguished group of investors who embrace writing as an integral part of their investment strategies. Figures like Warren Buffett, Ray Dalio, and Howard Marks have long recognized the value of articulating their thoughts through letters and essays, which not only enhances their understanding but also serves as a means of sharing insights with a broader audience. Buffett famously noted that writing helps him clarify his thoughts, stating, “Some of the things I think I think, I find don’t make any sense when I start trying to write them down.” This sentiment is echoed by business experts like Lawrence Cunningham, who argue that writing fosters discipline of thought, compelling investors to articulate their reasoning and providing transparency to their readers. As Burry embarks on this new chapter, his writings offer a unique opportunity for him to delve into complex topics without the constraints of regulatory limitations, allowing him to express his unfiltered views on the financial landscape.
The act of writing not only serves as a personal reflection tool for investors but also invites scrutiny and fosters a rigorous research process. As portfolio manager John Longo points out, publishing ideas forces investors to consider both the bullish and bearish aspects of their positions, thereby enhancing their analytical rigor. Burry’s examination of the AI boom, particularly his comparison of Nvidia to Cisco during the dot-com bubble, exemplifies this meticulous approach. By sharing his insights publicly, Burry, like his predecessors, contributes to a culture of knowledge sharing in the investment community, where the primary goal is not profit but the dissemination of wisdom and lessons learned. As he embarks on this new venture, Burry’s voice will undoubtedly resonate with both seasoned investors and newcomers alike, as he navigates the complexities of today’s financial markets through the lens of his unique experiences and insights.
Michael Burry, the investor of “The Big Short” fame.
Astrid Stawiarz/Getty Images
Michael Burry of “The Big Short” is moving on from managing money to writing a Substack.
The famed investor told Business Insider that “writing and analysis go hand-in-hand.”
Other investors said writing sharpens their thinking and lets them share lessons and insights.
Warren Buffett composes letters. Ray Dalio drafts essays. Howard Marks pens memos. As of Sunday,
Michael Burry writes a newsletter.
The money manager of “The Big Short” fame is
shuttering his hedge fund
to focus on publishing a Substack titled “Cassandra Unchained,” squarely aimed for now at calling out AI mania and key players such as Nvidia and OpenAI.
It’s a return to Burry’s roots. Long before he predicted and profited from the collapse of the mid-2000s US housing bubble, he
ran a value-investing blog
in his off hours as a medical student.
Burry is one of many investors to embrace writing as a core part of their process.
“I do not speak well, but writing and analysis go hand-in-hand,” Burry told Business Insider via email. “I have always read a lot, which has fed my love of writing.”
“Almost everything I do is at least in part
influenced by Warren Buffett
or Charlie Munger,” Burry added. “I could never thank them both enough.”
Buffett — who shut down his Buffett Partnership in 1969 because he was struggling to find bargains in a heady market — will step down as Berkshire Hathaway’s CEO before the new year, but he
plans to continue penning a Thanksgiving letter
to his shareholders.
He underlined how writing supports his investing during a university lecture in 1991.
“Some of the things I think I think, I find don’t make any sense when I start trying to write them down and explain them to people,” Buffett said.
He added that everyone should be able to explain why they’re taking a job or making an investment, and “if it can’t stand applying pencil to paper, you’d better think it through some more.”
Warren Buffett
Nati Harnik/AP
Lawrence Cunningham, a business guru who’s written a book about shareholder letters, told Business Insider that writing “forces discipline of thought” for investors.
Having to explain what they did, and why, fosters clearer and deeper understanding of the topic and themselves, and provides “invaluable” transparency to their readers, Cunningham said.
Writing also allows investors to share their ideas in “full paragraphs rather than soundbites,” and “present their reasoning, their doubts, and their frameworks exactly as they see them,” he added.
That freedom appeals to Burry, who said on his Substack that he has pivoted from managing money to writing in part because he was tired of regulatory restrictions on what he could say and
misinterpretation of his disclosures
— hence his “unchained” status.
Adam Mead, a fund manager, author, and blogger, told Business Insider that for him, “writing is thinking,” so it’s a “natural part” of investing.
Mead said it can be difficult to write something that doesn’t stand up to scrutiny, but puzzling over what’s gone wrong is a “feature, not a bug” of the process.
John Longo, a portfolio manager, finance professor, and author, told Business Insider that investors who publish their ideas
invite criticism
and put their reputations on the line.
Longo said this “forces the writer to rigorously consider the bull and bear cases” of their investments, encouraging a “thorough research process.”
He said that in Burry’s case, “properly researching” the dot-com bubble enabled him to make a “more credible” comparison between
Nvidia
and Cisco as key hardware suppliers to the AI boom and the internet mania, respectively.
Critics would have shredded a comparison to AOL, Longo said, whereas Cisco remains a major telecom company but is worth less than it was 25 years ago, a scenario that Nvidia could feasibly face if it’s as overvalued as Burry has argued.
Longo added that when someone like Buffett, Marks, or Dalio puts pen to paper, there’s an ”
element of public service
” — they’re writing not to make money but to share what they’ve learned and educate others.
Bill Gross, a billionaire investor known as the “Bond King,” told Business Insider that his signature
outlooks
serve as outlets for his investment views and personal essays.
“I am equally proud of both over a long 40-year-plus history of monthly tomes,” he said.
The Pimco cofounder added that he “always thought” if investing didn’t work out, “I might try my luck at writing.”
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