The Big Short's Next Target

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Dear Reader,

Every great fortune is built on a story.

And every great fortune is eventually undone when the story stops making sense.

The Spanish came to Argentina looking for silver.

The very name — Argentina — comes from the Latin argentum, meaning silver.

They believed the rivers ran with it. They didn't, of course.

The conquistadors found cattle instead, which turned out to be more valuable in the long run.

But the story of silver kept them going long enough to build an empire.

We mention this because Michael Burry is back in the news. And he's telling a story of his own.

You remember Burry?

He's the oddball hedge fund manager who saw the 2008 financial crisis coming when everyone else was still buying condos in Miami with no money down.

He bet against subprime mortgages. His investors thought he'd lost his mind. His analysts quit. His wife wondered if she'd married a lunatic.

Then Lehman Brothers collapsed. And Burry walked away with one of the most profitable trades in Wall Street history.

They made a movie about it. Christian Bale played him, glass eye and all.

This week, Burry found a new target: Tesla.

"Tesla's market capitalization is ridiculously overvalued today," he wrote, "and has been for a good long time."

He wasn't being polite about it, either.

Burry pointed out that Tesla dilutes its shareholders by 3.6% every year. Stock-based compensation, they call it. The company pays its employees in shares, and never buys any back. So every year, your slice of the pie gets a little smaller.

With Elon Musk's new $1 trillion pay package — yes, you read that right, trillion — the dilution is about to get worse.

But the real stiletto came when Burry addressed Tesla's famously devoted fanbase:

"The Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up."

Ouch.

The wall street drama continues…

Wall Street's Daily Drama

Market Snapshot

Source: Yahoo Finance, Polygon, and CNBC.

Top Headlines In 60 Seconds

• Michael Burry Targets Tesla: The "Big Short" investor called Tesla "ridiculously overvalued" and warned that Musk's $1 trillion pay package will further dilute shareholders. The stock trades at nearly 300 times earnings.

• Boeing Soars 10%: The planemaker's CFO promised positive cash flow in 2026, reversing this year's $2 billion burn. Best day since April.

• Precious Metals Pause: Gold and silver pulled back as traders booked profits after Monday's record session. Silver fell 1.5% to $57.58 after touching an all-time high of $58.57.

• Bitcoin Bounces: The flagship cryptocurrency rebounded 7% to around $90,000, recouping some of Monday's 6% plunge.

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The News Behind The News

The Narrative Business

People don't buy stocks. They buy stories.

Tesla's story has been magnificent. The visionary founder. The electric revolution. The mission to save the planet. Self-driving cars that would make human drivers obsolete. And now, humanoid robots that will do your laundry and walk your dog.

Each chapter more fantastic than the last.

The stock price followed the story, not the earnings. At nearly 300 times profits, Tesla is valued not for what it is, but for what its believers imagine it might become.

Burry sees through it. He always has. While everyone else was buying the dream in 2007, he was reading the fine print on mortgage-backed securities. Boring stuff. Numbers and contracts. The kind of work that doesn't make for good cocktail party conversation.

But it made for a very good trade.

Now he's reading the fine print on stock-based compensation. And he doesn't like what he sees.

"The Elon cult," he calls them. Harsh, perhaps. But not inaccurate.

We've seen cults before, dear reader. In markets, in politics, in religion. They all share the same characteristics: absolute faith in a leader, immunity to contradictory evidence, and the ability to shift the goalposts whenever reality intrudes.

EVs were going to take over the world. Until Chinese competition showed up. Then it was autonomous driving. Until Waymo and others caught up. Now it's robots.

What will it be next? Time travel? Immortality pills?

The faithful will believe. Until, one day, they won't.

A Company That Makes Things

Speaking of things we didn't expect...

Boeing had its best day in eight months yesterday. The stock jumped 10%.

The reason? CFO Jay Malave told investors the company expects to generate actual cash in 2026. Positive free cash flow, they call it. In the "low single-digit billions."

This is what passes for good news at Boeing these days. A company that might, possibly, if everything goes right, stop bleeding money next year.

Boeing has been through the wringer. The 737 Max crashes that killed 346 people. The door plug that blew off mid-flight. Manufacturing disasters. Quality control failures. A strike that shut down production for weeks.

The company has lost $39 billion in the first half of this decade. Billion with a B.

And yet, here it is. Still standing. Still building planes. Still taking orders — including a $38 billion deal from Emirates just last month.

There's something to be said for companies that make real things, dear reader. They can stumble. They can make terrible mistakes. They can be run by incompetents and plagued by disasters.

But the factories don't disappear. The engineers don't forget how to build. The demand for their products doesn't evaporate because the narrative changed.

Boeing will probably survive. It's been making planes since 1916. It built the B-17s that won World War II. It put men on the moon.

Companies built on stories are more fragile. When the story stops working, there's nothing left to fall back on.

The Metals Rest

After Monday's fireworks, gold and silver took a breather.

Gold slipped to $4,221. Silver pulled back to $57.58 after touching $58.57 — a new all-time high that broke a record set 45 years ago, when the Hunt brothers tried to corner the market.

The analysts call it "profit-taking." Which is a fancy way of saying some people decided to sell.

Fair enough. After a 91% gain in silver and 60% in gold over the past year, a little rest is warranted.

But nothing has changed in the underlying story. London's vaults are still depleted. Shanghai warehouses sit at decade lows. Central banks are still buying. The Fed is still expected to cut rates next week.

The difference, of course, is that gold and silver don't need a story. They don't need a charismatic founder. They don't need a cult following. They don't dilute your holdings by 3.6% per year.

They just sit there. As they have for 5,000 years. Quietly holding their value while empires rise and fall, currencies come and go, and stories lose their believers.

The Bottom Line

We began with a story about Argentina. Let us end with one.

The Spanish conquistadors came looking for silver. They didn't find it — at least, not in the quantities they imagined. But they built a civilization anyway, one that lasted for centuries.

Then the stories changed. Argentina became the world's richest country in 1900. Then it became a cautionary tale of inflation, default, and decline. The peso, once backed by gold, became worthless paper. Several times over.

Through it all, the people who held gold and silver — real metal, not paper promises — survived. Their children survived. Their grandchildren are still there, on the estancias, raising cattle and watching the sun set over the Andes.

The stories come and go. The cults rise and fall. The paper promises multiply until they don't.

Michael Burry sees something in Tesla that reminds him of 2008. Maybe he's right. Maybe he's early. Maybe he's wrong entirely.

But we notice he's not buying Tesla stock with his warnings. He's not betting on the next chapter of the Musk narrative.

And neither, dear reader, are we.

We'll stick with the metals. They don't need us to believe in them. They don't need anyone to believe in them. They just endure.

And in a world of endless narratives and shape-shifting stories, endurance is worth more than we can say.

The Wealth Protection Research Team