Michael Burry
· Cassandra Unchained
· June 12, 2026 at 18:59
· ⏱ 1 min read
| Read on Substack ↗
Summary
Burry argues that the market is irrationally penalizing profitable, low-debt, cash-generating companies with buybacks, which trade at less than 10x earnings, while pouring capital into AI-related spending that he compares to the dot-com bubble. He believes LLMs are not true AI and that training them is hitting diminishing returns before profitability, so he is buying these undervalued value stocks.
•Burry observes that large, established companies with significant owners earnings, little debt, and large buybacks are trading at less than 10x earnings.
•He asserts that LLMs are language models, not AI, and that no one is using AI yet.
•He claims training these language models is hitting diminishing returns well before profitability, let alone return of capital.
•Burry compares the current AI spending frenzy to the dot-com bubble, recalling his successful purchases of Ross Stores, Clayton Homes, and Dun & Bradstreet in 2000.