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 role in “The Big Short,” is transitioning from hedge fund management to writing, launching a Substack newsletter titled “Cassandra Unchained.” This shift marks a significant change in Burry’s career as he closes down his hedge fund to focus on sharing his insights, particularly on the current AI frenzy and key players like Nvidia and OpenAI. Burry’s decision to embrace writing is not entirely new; he previously ran a value-investing blog while studying medicine, and he cites the influence of legendary investors like Warren Buffett and Charlie Munger on his approach to analysis and communication. In an email to Business Insider, Burry emphasized that “writing and analysis go hand-in-hand,” reflecting a sentiment echoed by many successful investors who use writing as a tool to clarify their thoughts and strategies.
The practice of writing among investors serves multiple purposes, as highlighted by experts like Lawrence Cunningham, who notes that writing cultivates “discipline of thought.” By articulating their investment decisions, investors not only enhance their understanding but also provide transparency to their audiences. This allows them to present their reasoning in a comprehensive manner rather than relying on soundbites. Burry’s move to write freely without the constraints of regulatory oversight reflects a desire for unfiltered expression, as he aims to dissect the complexities of the market, particularly concerning the potential overvaluation of AI-related stocks. Other prominent investors, such as Buffett, Ray Dalio, and Howard Marks, also utilize writing to educate and engage with their audiences, reinforcing the idea that sharing knowledge is a form of public service.
Burry’s analytical approach, particularly in comparing Nvidia to Cisco during the dot-com bubble, underscores the importance of rigorous research and the willingness to invite criticism. This practice not only enriches the investor’s understanding of market dynamics but also encourages a thorough evaluation of both bullish and bearish perspectives. Writing, therefore, becomes a means of accountability and reflection, as investors like Burry and others put their reputations on the line by sharing their insights publicly. As Burry embarks on this new chapter, his newsletter promises to be a valuable resource for those looking to navigate the complexities of today’s investment landscape, blending personal experiences with critical analysis of emerging trends.
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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