And Fintech LLP

https://mailchi.mp/a56c389353a0/dwipas-take-4-every-index-was-red-this-fund-returned-14

𝐑𝐞𝐦𝐞𝐦𝐛𝐞𝐫 𝟐𝟎𝟎𝟖?
One man saw it coming much earlier - and was laughed at. While the entire world was in severe distress, his contrarian bet delivered ~𝟓𝟎𝟎% 𝐫𝐞𝐭𝐮𝐫𝐧 for his hedge fund investors in 2008.

The story is legendary and so is the man, meet 𝐌𝐢𝐜𝐡𝐚𝐞𝐥 𝐁𝐮𝐫𝐫𝐲, CEO of Hedge Fund Scion, the guy who famously bet against US subprime housing market.

Recently, Michael Burry 𝐬𝐡𝐨𝐫𝐭𝐞𝐝, ( bet against) America’s most loved tech stocks Nvidia and Palantir. His bet size ~$𝟏.𝟏𝐁𝐧.

Is this a signal

Let's look at the facts:

- Nvidia market cap ~ $5.0 Tn vs FY 2025 revenue $130.5 Bn.
- Many big tech stocks still trade at 30- 60x earnings - levels hard to justify long term.
- U.S. - China tensions dragging sales down. US blocking Blackwell chip supply , in turn China hitting back with a ban on foreign chips at state run data centers.
- The circular investments by tech companies in each other leading to valuation bubble.

𝐖𝐡𝐚𝐭 𝐭𝐡𝐢𝐬 𝐦𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐈𝐧𝐝𝐢𝐚𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬:

Many Indian portfolios have unknowing indirect exposure to the U.S. tech rally through:

- US Opportunity Funds and other Feeder/FOFs (Funds of Funds) investing in Nasdaq-100 or U.S. blue chips.
- Direct U.S. stock holdings via LRS routes.
- Global ETFs in Indian brokerage accounts.

If this bubble deflates, Indian investors may face losses without realizing they were overexposed.

Practical ways to reduce risk:
- Re-balance U.S. heavy exposure in your mutual-fund portfolio - check if any feeder fund is majorly tech-skewed (U.S. Opportunities Fund, Nasdaq 100 Fund, etc.).
- Trim direct U.S. stock holdings and diversify into India / Asia centric funds.
- Avoid chasing recent AI-themed U.S. ETFs.

Burry’s bet reminds us - valuation must be based on fundamentals and not Fads.

Bottom line:
Michael Burry may or may not be early again , but ignoring valuation discipline rarely ends well. It’s a timely reminder for Indian investors, diversification isn’t about chasing the hottest market, it’s about surviving the coldest correction.

Curious to here your take.
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