원문 보기
Michael Beugry, the legendary investor from the movie "The Downside Game," has been incredibly active for the past 6 weeks, quietly making move after move. And here's the funniest thing . Wherever you look online, everyone likes to say that Bugry is a clown who always makes mistakes and always “burns out.” He predicted 28 of the last three recessions.
He predicted 30 of the last four market crashes. But if you actually look at his latest bets and compare them to the numbers, the picture looks completely different than what we see on the internet. Today I'll tell you everything he buys, what he's betting against, and whether he might actually be right.
So let's begin. A quick but important note before we begin. Michael Beugry is a famous investor who bet against the real estate market before the 2008 crisis and made a fortune. It is on this story that the film "The Game of Downgrades" is based. He was absolutely right on a few big predictions, but also wrong on many others.
However, he almost always acts contrary to the crowd, which is why people follow him so closely . But here's what most people don't understand. Late last year, Bugry closed his official foundation. This means he no longer needs to file public reports that previously disclosed his entire portfolio. This was called Form 13F.
So today we only see the deals that he chooses to share himself through his posts. This is a key difference, and I want to be honest with you . We do not see the investor's complete secret portfolio . We only consider publicly disclosed positions that he himself decided to make known to the world. And over the past 6 weeks, he's revealed a whole series of such deals: buying some stocks and betting against a whole bunch of others.
He shares these steps in short posts, sometimes deleting them, so online trackers try to screenshot each one. We have put them all together to create a clear and simple picture for you. And now here is his entire plan, condensed into one simple sentence. Bugry buys what is hated and pits it against what is hyped.
On the one hand, it plays against the most busy and popular trend on the entire planet today—artificial intelligence and computer chips. He made bearish bets against Nvidia, Micron, Applied Materials and the large semiconductor fund SOXX. Also in the sights are Palantir, Caterpillar, Tesla, Oracle, and a new player in the AI field called Nebius.
So, a quick explanation for new investors. Betting against a stock, also known as " shorting," means you make money if the price falls rather than rises. This is the opposite of conventional investing. Instead of "buy low, sell high," you bet that stocks have gone too high and will soon collapse. So Burry is betting that many of these "hot" stocks are about to crash.
On the other hand, he buys a basket of cheap, depressed, and unloved companies that everyone else has ignored. Names like Lululemon, PayPal, Fiserv, Zoetis, Mercado Libre, Flutter, jd.com, Tencent, and Adobe. These are not bright spots in the field of artificial intelligence. These are ordinary businesses that have become cheap because the crowd ignored them, focusing on something more exciting.
He even recently sold stakes in Microsoft and DraftKings to narrow his focus. So, that's the whole picture. Buy cheap and hated, short expensive and hyped. This is a classic value investing strategy. Buy at a discount and stay as far away from "bubbles" as possible. And one thing that Burry himself emphasized: he is usually mostly a buyer.
He only makes such big bets against the market when he believes the crowd has become dangerously greedy in a particular area, which says a lot about his view of today's market. But the big question is: does it really work? Now let me briefly tell you how it all unfolded, because the pace , to be honest, was frantic.
It all started on June 30th, when Burry opened fire on all trend trading at once, revealing bets against Nvidia, Applied Materials, SOX, Caterpillar, and Tesla in one day. For one investor to bet against five giant favorite companies in one day is a bold, loud statement that the entire trade is about to turn upside down.
Just 2 days later, on July 2, he added a bet against Micron. And that same day, he bought five depressed stocks, including PayPal and mortgage companies Fannie Mae and Freddie Mac. Then, on July 8, he switched to sports betting and China, buying Flutter, DraftKings and more JD.com, which he called one of the largest positions in his portfolio at the time.
For the rest of July, he continued in the same vein, accumulating more bets against chips and buying more cheap, unloved names like Tencent, Lululemon, and even more Adobe. On July 30, he made an even more decisive bet. No sales that day, just additions to both parts of the book —both long and short positions.
And August became even busier. He sold off the assets, taking a significant profit from Microsoft and closing out his Oracle bet with a big profit . However, he did not become optimistic. He also opened a new position against Nvidia and bought shares of Lululemon, Fiserv and MercadoLibre. And this week, on August 10, he made new bets against Palantir with a term until 2027.
Some of you may not remember, he started betting against Palantir when the stock was over $200, I think. It fell all the way to the $120 level. He closed the position with a huge profit and excellent timing. Palantir just reported earnings and skyrocketed again, and yesterday he opened a new bet against Palantir.
That's a lot of steps in just 6 weeks, and almost every one of them corresponds to the same theme. And this is where it gets interesting, because the internet is absolutely convinced that Burry is always wrong. So let's just look at the real numbers. And to be completely objective, I'll show you the predictions that worked and the ones that didn't.
Let's start with his bets against chip stocks and AI, measured from the day he announced each. Applied Materials fell about 28%. Caterpillar is down about 21%. Tesla also fell 21%. Micron fell 18%. Shares of the big chip fund fell 18%, and NetApp fell 13% in a matter of days. These are weighty and accurate predictions.
His bet against the chip pool was particularly timely. It fell by about 21% in just 1 month. And it's not just his short positions that benefit. On the purchasing side, PayPal grew by about 30 % after he acquired it, and JD.com grew by 21%. These are excellent results, ahead of the market, in just a few weeks .
So while everyone was laughing at him for betting against AI , Burry was quietly making money in both directions at the same time: profiting from the fall of overvalued stocks and the rise of his cheap, forgotten assets. Now, to be completely honest, he's not perfect. Nobody is perfect. His bet against Nvidia did n't go as planned, as the stock rose about 10 % against him.
About 3 years ago, he called for selling stocks, and since then the market has risen about 120%. His Flutter purchase is now unprofitable, and the bet he recently reopened against Oracle is slightly in the red. So, no, not every prediction is successful, but the idea that Burry is always wrong and loses is a different matter.
The numbers say that this is a blatant lie. So guys, before we dive in, I want to remind you: don't take our headlines and previews literally. We are not here to give you stock advice . We are here to teach you a process that will help you sleep better at night because you will know how to value a stock, make the right assumptions about its future, and understand that the price you pay is different from the value you receive.
So let's take a closer look at three of his best predictions. Two stocks he bet against and one he bought, and let's run them through our own process to see what we think about it. Because that's what we always preach. Just because a well-known investor made a move doesn't mean you should blindly copy it.
His admission price, time, and reasons may be radically different from yours. So, let's do the real work and check it out for ourselves. So, first of all, friends, we have Applied Materials. This is a company that builds huge, complex machines that actually make computer chips. So when the whole world went crazy about AI chips, this stock just skyrocketed on that wave .
Berry looked at it and bet that it had become too expensive too quickly. And since then it has fallen by about 28%. This is an extremely accurate prediction. But the real question for us is not whether Berry was right. And is it worth buying it now? So let's run it through our analyzer and see what the numbers say.
So guys, the purchase price of the company is $425 billion. Now the stock price is the market capitalization divided by the number of shares outstanding. Their corporate value is $433 billion. The difference between market capitalization and corporate value is essentially their net debt, which is about $8 billion .
Now, you guys, you know, it's great that they had $8 billion in cash flow last year. So it seems like they have a pretty reasonable level of debt in the company. Okay, one more thing—high return on capital. This is an indicator of quality. He tells us that this is a company that knows how to manage the money coming into their business.
That's good. Next, look at this: profitability is increasing. 24% per year for the last 10 years, 26% per year for the last five, 30% for the last year. So, profitability improves. The question is, is this because of the recent hype and mania surrounding chips, or will this become something permanent?
Now about some problematic points. Revenue growth: 3% per year for the last 3 years. Not very well. 53 to one to free cash flow, 50 to one to profit . This is expensive. Of course, it would n't be expensive if they were growing by 20-30% per year , and their profits by 40-50%, but we do n't see that right now.
Well, let's review the eight pillars. Guys , we really like to see this. All check marks except for the two red Xs. These two red "x"s are PE ratios and price to free cash flow for the last 5 years, not 1 year. And they are tall . Another point: they have been buying back shares for the past 5 years.
Many people consider this a good thing, but it is not good if the company is expensive. So let's see how high the price to free cash flow has been over the last 5 years. I'll click on the graph here . Let's take a quarterly look. OK. They had...So this started 5 years ago. They were in the range of just under 30 for a while, and recently took off.
Why did they take off recently? Because the price has skyrocketed. Let's take a look at the price of this company. Schedule. Five-year schedule. Look at this. Much of this growth has actually occurred in the last year. That is, of their 285% growth over the last 5 years, 188% came in the last year. So that's probably why Burry says, "Listen, this is too much, too fast." OK.
Now, before we get into the analyst ratings, I want to remind everyone, especially those new to the channel, that the reason I decided to teach this on YouTube is because over the years I've realized how few people understand that the price you pay and the value you get are completely different things.
You can have the best story in the world for a company, but if you pay the wrong price, you will have a bad investment. And few people understand this. So, earnings per share growth: from $12 to $21 over the next 4 years. This is a big growth, guys. This is not a doubling, but it is an 80% increase over the next 4 years.
These are high figures at the level of teenage percentages per year. And the revenue growth, from 33 to 50 billion, is a 50% growth over the next 4 years. This is an average of 10 or 11% per year. That seems perfectly reasonable, but I look at it and think: wait, the last three years they've only had 3% per year, and now it's going to jump to 16, 25, 12, and then eight.
Maybe that will happen. Of course, if this chip boom continues, then so be it . So, we have a little history and a little numbers. What we will do now is feed this data into our stock analysis tool to determine a fair price for the business. So the key here is to make the right assumptions . How to make the right assumptions ?
Well, this is the art of investing. You need to sit down and think, "Okay, what 's smart for this company going forward?" I usually do a 10-year analysis. And the first line is "What is the revenue growth?" Friends, they have had 11.74% revenue growth over the last 10 years. Over the past five years—8 %, over the past three.
I contribute three, five, and seven percent. But you've seen my analysts, they're much more optimistic than I am. I don't know what will happen in the next 10 years. Wouldn't that be a "bubble"? This is what makes this industry particularly difficult to evaluate. We don't know if this is a permanent plateau for the chip business.
Is this just a big hype that will subside a bit and then grow again? This is what makes investing difficult. I'm not trying to say I have the answers, and for me this might be a signal to ditch this company if you can't make reasonable assumptions. Next is profit and free cash flow. Now I've taken 20, 23, and 26.
As you can see, they've worked much better over the last five years. These are very good indicators. So I can be very conservative here. But then again, I wonder if it's because of the high demand for their products that has allowed them to set a good markup. Next, what P/E or price to free cash flow would I put on the business in 10 years?
Well, they have a high return on capital. This means that the business is of high quality, and the average market indicator is 15 or 16. This company has been on the market for quite some time. It has a high return on capital. She deserves a premium above the historical market average. So, I enter 15, 18, and 21.
And finally, my desired profit of 9% without a margin of safety. This is not the profit I want to buy a company with. This is necessary to understand how much the company is worth in the market. So guys, I hit the analyze button and here are my prices. I have a low price of 111, a high of 240, and an average of 166.
As you can see, this is significantly different from today's price of 533 . Therefore, I will refrain from this investment for now. For those of you who want to know how to make the right assumptions, we are hosting a free webinar on August 20th at 1:30 PM Eastern Time. How to value stocks. It's completely free.
Follow the link in the description below to register. The number of places is limited, so register, join the class and learn how to evaluate stocks. Next up is Caterpillar, the well-known manufacturer of big yellow construction and mining equipment. Its shares have risen significantly, partly due to the hype around the fact that all the new data centers and factories will need a lot of heavy equipment.
Berry bet that the price had gone too far. Since he announced this rate, they have fallen by about 21%. And here's what our process says about whether it's worth owning them today. So guys, we have Caterpillar here. A business worth $394 billion . The company's value is $470 billion. That's effectively $75 billion in debt.
And their free cash flow was 7.5 billion. It's 10 to 1, guys. That's a lot. So it looks like they have a little bit of debt, but Caterpillar is a big company. Next: high return on capital. Perfectly. We really like it. But look at these price- to-free cash flow and P/ E ratios. Another thing is that their earnings are much higher than their free cash flow.
This is something we don't really like, especially in mature companies that may have large capital expenditures. So I'm not thrilled about it. One question: why is their five-year profit margin so much higher than their ten-year one? 14.36% versus 11.46%. This means that in the first five years out of the last ten it was significantly lower.
Somewhere around 8.5%. So why has it become so much higher in the last five years? This is a question I ask myself. Okay, let's look at the eight pillars here. Well , we see this debt. X on debt. X on their 5- year free cash flow and 5- year P/E. The number of shares outstanding has decreased, even though the share price has skyrocketed.
Let's see, they continue to buy every quarter. Maybe this is part of their plan. But, man, these stocks are expensive. I don't know if this is a good idea . I really don't know. Okay, let's see what analysts think about the company. Almost doubling profits over the next 4 years. That's 18% per year, guys.
This is madness. This is absolutely crazy . Doubling profits over the next 4 years. Revenue will grow by approximately 40% over the next 5 years. 6 or 7% per year. Wow, doubling profits over the next 4 years. So guys, here's my 10-year analysis of Caterpillar. My first numbers are revenue growth. I took 4, 7 and 10% .
I still think 7% is too high. In fact, I want to take 3, 6, and 9%, although analysts are much more optimistic. Next, profit margin. Yes, it's 14% over the last 5 years, but over 10 years it's 11.5% and 9% free cash flow. So I took 8, 10, and 12%. Next, what is the P/E and price to free cash flow in 10 years?
I took 16, 19, and 22. And then at a 9% return with no margin of safety, I hit the analyze button. The stock is now worth 850. I understand what Bury is leaning towards. $ 200 at the low end, $ 600 at the high end, $360 on average with a negative return even by my average assumptions. And that's including their dividends, which consume $2.5 billion of free cash flow.
And finally, the only stock he actually bought was PayPal, a digital payments company you've almost certainly used. This is a perfect example of his entire strategy. While everyone else was chasing shiny AI stocks, PayPal was written off . A real profitable business that was traded very cheaply only because it was no longer interesting.
Bury quietly bought it, and it has since risen about 30% on takeover rumors and an actual offer. So the crowd ignored the bargain that was in plain sight. Let's run it through the analyzer and see if there's any value left here today. Keep in mind, guys, I own PayPal, but like I said, we're not here to give stock advice, so don't repeat anyone's online purchases.
This is a $52 billion company with huge enterprise value because they hold a lot of cash there. Essentially, it acts as a holding company, well, I always tell people that they have money. This is money they owe to other suppliers . Next, good return on capital: 15% last year, 12% per year for the last five, stable profitability of about 14%.
You have a price- to-free cash flow ratio of eight. Eight, guys. Look at their free cash flow last year over the last 12 months: 6.6 billion versus the five-year figure of 5.3. Guys , I can already look at the eight and say: " Okay, there's something interesting here ." Why is this happening? "Okay, let's check the eight pillars here.
All eight ticks. Remember, it doesn't mean that if there are eight ticks, you should buy the company. The eight pillars tell us a story, and the story here is one that I'm really interested in. Remember, there was a lot of enterprise value there, which included a lot of debt, but the long-term debt was right here, very low.
That's the difference. They're holding a lot of cash for other suppliers and people, and this is their current liabilities, money that they owe to others. Okay, let's look at the analysts' forecasts. Analysts are predicting EPS to grow from $5.40 to $9 over the next 4 years, and revenue for this, so to speak, "dead" company to grow from $35 billion to $56 billion over the next 7 years.
So, not a lot of growth, especially early on. So think what you want about it. It's not going to grow very quickly, but if you pay a good price, it could make you a huge profit. So let's open up our stock analysis tool. And these are my assumptions for PayPal, a company that I own. And you can see why I'm a little upset about the offer that came in.
3, 5, and 7% revenue growth over the next 10 years. 13.5, 14.5, and 16% margin , but 14, 17, and 20% free cash flow. Look at their free cash flow, it's always higher than their margin. I focus on free cash flow. Then, the P/E, I've lowered that. I said 14, 16, and 18 times earnings and free cash flow and my desired yield of 9%.
So if you look at PayPal right now, it's a company that the entire market has written off . It was at 310, and it's down to about 38. It's not worth anything to anyone. was needed. Nobody was talking about it . Berry came in, looked at the numbers, and bought it while everyone else was fighting over the same five shares of AI.
30% in a matter of months. Not because he was lucky. It was because he didn't look at the headlines. He looked at what the business was actually worth compared to what the market was asking for it. That's what really separates the people who make money in the stock market from the people who lose it.
It's not about picking the hottest name . It's about knowing the real value before you invest. And most people just skip that step. They buy because the price is going up. They sell because the price is going down. And then they wonder why nothing ever comes of it. And that's why we built a stock analysis tool.
It takes any stock and tells you how much the business is worth based on your assumptions and the numbers you put in, and the community around it is thousands of people who do it every day. Take the stock apart, throw it away challenge each other, get better every week. Think about what it's costing you not to have your own process.
What's one terrible investment that you could have avoided if you understood the numbers? One stock that you overpaid for because you followed the crowd. That's a lot more than the dollar a day it costs to try this tool. So, go to everythingmoney.com, sign up, it costs $7 for 7 days, link in the description.
Let's see what PayPal is worth based on my assumptions, and I think they're very conservative. Guys, my minimum price is 75-80, maximum 140-180, average 100-120. That's why I'm outraged by the offer that came in. The stock is worth 60 bucks. The offer was 61 dollars. That's not enough . So Michael Berry is clearly not the fool the internet likes to portray him to be.
And there 's another bet worth talking about. His the newest and one of the most aggressive—Palantir. As I mentioned earlier, he's made a new bet on Palantir's stock falling all the way through 2027. He even said that he thinks the intrinsic value of the stock is just $1. We just did a full, detailed analysis of Palantir: its incredible business, its sky-high valuation, and whether Berry could be right again .
This is the perfect video to watch next. Click right here on the screen. Thanks for your time.
댓글 0