This last week all the news media decried the upcoming burst of the AI bubble. Michael Burry bet almost a billion dollar short on the AI sweethearts Nvidia and Palantir.
For a day or so, I was puzzled with this news and wanted to get to the bottom of the reasoning and the bets. I didn’t find much so, I tracked down Michael Burry’s Twitter account. It wasn’t super easy to find his direct account because there were a lot of name squatters. So, here is what I read from him on the subject –
“So I spent $9,200,000 , Not $912,000,000. @CNBC @WSJ @FT” Michael J Burry Shines light
Wow! So his approximately $9 million short on those stocks (NVDA and PLTR) was projected falsely by the trusted financial news sources to almost one billion dollar short! And fast forward a week plus there are numerous podcasters and bloggers still doing shows proclaiming an imminent AI bubble burst.
I did a little more investigation on the matter of what exactly were Michael’s PUTs, turns out he shorted about $7.5 million of Palantir and $1.5 million of Nvidia. But my understanding after scrolling through all that AI burst talk was that he primarily shorted Nvidia!
This whole thing is so bizarre, that in modern day and age of fast news cycle as well as a lot of news – we have primed our primal instinct to surf on hoaxes! There is no overarching thought and education even to this date on how people should get to truth and what is the responsibility of so called “trusted” news sources to rectify their misjudgments.
Following are a couple of things which I still ponder on and would love to figure out cleaner ways of doing this.
- When I read the news, I didn’t react on it for a bit but as more of the bubble burst noise became louder I wanted to know more. For some reason, I have developed a bit of a lazy attitude towards urgent news. Not sure if that’s a good thing or bad.
- When I wanted to dig deeper, I wanted to go to the source of the news, instead of yet another “trusted” news site. My instinct was to verify with the man himself – but it was not so easy to find his trusted profile. Had to validate it in a few different ways.
- The best 5 minutes I spent in this whole saga were reading the logical notes and comments on the thread of Michael J Burry himself! It didn’t need any fact checking just personal authenticity.
- Even a week out, I don’t see any media news about clarification of this misjudgment; in fact I only see lots of podcasters and bloggers who are continuing the misjudgment and using the news as a sensational eye-catcher! Shouldn’t we as a society have a reflex mechanism to mend something like this?
So my bigger question is how do we educate ourselves and develop some techniques & reflexes to deal with – trusting fallible trust? Trust but verify? No urgent action on urgent unverified news?
Thoughts?