Video summary
The video centers on the recent market movements of Palantir stock and the contrasting strategies of investor Michael Burry versus the content creator's own position. While Michael Burry recently covered only half of his short position after losses mounted as shares climbed from around $105 to over $175, he is now doubling down by purchasing out-of-the-money put options with strike prices in the low-to-mid hundreds for delivery in March 2027. This aggressive move signals Burry's belief that Palantir and other AI stocks are significantly overvalued and that the current rally lacks legitimacy, predicting a potential decline of another twenty to thirty percent from current levels. In contrast, the speaker admits to having taken long positions earlier at lower prices before selling out for profit, noting that while they agree Burry's bearish stance on Palantir is valid in theory, he doubts the stock will revert all the way down unless there are massive fundamental shifts or a broad market crash affecting indices like the S&P.
The speaker argues against following Burry's lead by highlighting how his actions often serve to stir up retail investors and generate media attention rather than reflecting purely accurate predictions. Although Burry has had notable successes, such as correctly shorting Micron which is currently suppressed despite strong projected earnings for 2027 and 2028, the speaker believes many of his other calls fail or are self-fulfilling prophecies driven by publicity rather than pure market logic. Specifically regarding Palantir, the creator points out that while Burry expects a return to lower valuations, the stock has broken above key resistance at $160 and is trading near year-to-date highs, suggesting that gains may hold firm unless there is a significant downturn in earnings or macroeconomic conditions. The speaker notes that even if a pullback occurs, they see limited downside below current support levels around $155 to $160, making Burry's deepening short position seem risky given the stock's momentum and investor enthusiasm for its narrative.
Ultimately, the discussion concludes with an analysis of Palantir's fundamentals versus its lofty valuation, suggesting that unicorn companies often grow into their high price tags rather than correcting down to traditional multiples like twenty times earnings. The speaker emphasizes that investors remain deeply committed to Palantir's story due to strong demand and belief in the company's trajectory, which prevents the stock from falling back to levels where valuations appear more reasonable on paper. While acknowledging the possibility of a collapse cannot be entirely ruled out, the creator expresses personal confidence that the current high valuation is justified by the unique nature of such sought-after assets and warns against fearing low multiples for companies with compelling growth stories. The video ends with an invitation for viewers to share their opinions in the comments while encouraging them to subscribe and join the community for further portfolio updates and trade alerts, reinforcing the idea that market sentiment often defies traditional valuation metrics when driven by strong corporate narratives.
Read the full video transcript
So, Michael Burry covered what, half of
his Palantir short at 107 a couple of
weeks ago or was that a month or two
ago? Whenever that was. I think when the
stock got down to 105 on that drawdown
back in the end of June, and he got his
face completely torn off as Palantir
obviously ripped after that. And by the
way, guys, I went long Palantir at what,
107? I added some at 109, 117, and I've
since sold out of that position, quick
trade. Uh but yeah, he got his face torn
off as Palantir now has gone to $175.
And Burry, guess what? He's doubling
down on his short position. And he only
covered half of his short position at
107, uh wherever that was, right? And
again, he's gotten demolished since that
point. I forget when he entered the
short position, but I don't think it was
it was above 178. No way it was
considering Palantir hasn't been um
above 178 all year, you know? So, Burry
is going deeper, right? So, we're going
to break down Palantir in this video,
the charts, what Burry's doing, my
thoughts, where my head's at. So, guys,
hit the like button. Make sure to
subscribe. Join my Patreon if you want
to keep up with my trades, portfolio
updates, private Discord community. All
that's linked down below, pinned in the
comments, in the description box, the
bio. You guys know uh where to find the
links. So, again, Burry is doubling down
right now. He reestablished
out-of-the-money put options expiring in
March of 2027. So, we're looking at uh
what, about 7 months, 7 months out uh
with strike prices in the low-to-mid
$100 range. So, he's taking advantage,
obviously being a bear, uh which I'm not
a bear, full disclosure, I'm not, but
he's taking advantage of these elevated
prices as premiums for puts are getting
slaughtered, right? He's get uh he's
taking advantage and
doubling down, going deeper into his
trade with strike prices in this range
down here, right? Between he said a low
to mid hundreds, so we can assume 110,
120, 30, 40. I'm sure he scattered them
across that range. So, he thinks
Palantir, now that it's at 175, and by
the way, uh we're up on the day about a
quarter percent as the entire market is
down except for the Russell. So, he
thinks Palantir is going to come down,
let's say another 20, 25, 30% from here.
So, he thinks this rally, in other
words, is not legitimate. He thinks it's
going to go all the way back down to
where it was a couple weeks ago, which
it could, who knows, but I think that's
doubtful. I think this breakout,
although I do think we need to pull
back, I think a lot of these gains are
going to hold on Palantir stock. Uh
we're overall breaking out of this 160
resistance. We're at a fresh
year-to-date high. The stock's
completely breaking out. I don't think
we're going back to the low hundreds
unless the Qs go down 10, 20% unless the
S&P goes down 10%. Okay, maybe at that
point we might go down low hundreds
again, but the lowest I see Palantir
going is 140, 50, maybe on a bigger
drawdown, but I think we'll respect this
155, 60 resistance, which is now
support. I think we hold that. That that
is where, okay, if we pulled back, I
could see us going to, but not much
lower. Not much lower.
Um and Berry thinks, obviously, we are
going much lower, and
like I said, he's going into these puts
as overall the premiums have come down.
We've seen a drop in IV.
Um and this follows a period earlier in
the year uh where again, he covered that
that position at 107. So, yeah, he he he
just thinks that Palantir amongst other
AI AI stocks are way over valued, way
over bought.
And he's known for being obviously a
short seller. And he he makes all these
bets. He makes so many freaking bets and
not all of them go right. In fact, most
of them are
do don't work out. They they don't play
out. And he he had he had one great call
in '08, The Big Short, the movie made
about him obviously. And now everybody
talks about him. Obviously, I'm here
making a video about him. And he gets
all this publicity. And I think
personally, I think a lot of his moves
are to kind of stir up the retail
investor community, freak out retail
because he knows he has that
uh that power, that leverage if you
will, where if he makes a big move, a
bold move, guess what? It's all over
CNBC. It's all over the financial media.
We have all these content creators
making videos on it. And it becomes a
self-fulfilling prophecy at that point.
And uh he knows what he's doing. So, I
still talk about him, but I'm at a point
where maybe I shouldn't talk about
Michael Berry because I'm feeding into
the beast, if you will. Um you know,
giving him more publicity, giving him
more of uh you know, of
Not that I get millions and billions of
views, right? I guess I do get millions
of views on my shorter form content.
But, if I make a video, then maybe that
guy makes a video. And again, it becomes
a point where it's a self-fulfilling
prophecy. We have all these
all these eyes on Burry
for what? I mean, I think yeah, he makes
some good calls, but not all his calls.
In fact, most of his calls are not good.
Although, I am I am happy he's in
Mercado Libre.
I think he's long shares. I don't know
if he's long call options, but he's in
Mercado Libre, which I'm long Mercado
Libre. So, that okay, I can get behind
that, but a lot of his moves, I just
don't agree with.
He's short Nvidia. He's short Nabius.
You know, I forget what he's short at
this point.
But, yeah, I mean, he he's he's not
doing the best on some of those calls.
Yeah, he nailed the Palantir move, but
it's gone up 70% off the lows. So, you
know, it's like I don't know. I don't
know. I think he might regret being long
all these AI stocks. Oh, yeah, he's also
or short rather all these AI stocks. And
he's also short Micron, which that has
worked out.
And Micron has really lost momentum,
some guys. I mean, the a bulls are
nowhere to be found. So, yeah, he is
making money here. I think he went short
at 1050, but for how much longer is
Micron going to be suppressed? I mean,
yeah, we do have a descending triangle.
This could go lower, but for how much
longer with the fundamentals that Micron
has, with the earnings that are
projected to come in in 2027, 2028, how
much lower is the stock going to go? I
just don't see it going much lower right
now unless something massively shifts
fundamentally with the company, the
story around memory, maybe demand goes
down, maybe we get another China scare,
you know? Maybe that sends it much
lower, but with the the current
fundamental landscape, I just think
Micron will be up more.
It will go up in due time. It's just in
a period where it's out of favor. People
are spooked, but I think we'll go back
to a thousand bucks, maybe higher. And I
think Burry is going to get his face
torn off unless he covers his short,
which I think he will uh before that
happens. And again, we're in Mercado
Libre together, that's exciting
considering it's up 6 and 1/2% today in
the midst of a red day, uh but again,
most of his moves I just don't agree
with. And Palantir, going back to
Palantir,
the fundamentals just keep getting
better and better. Yeah, it might be
trading at a lofty valuation, but often
these unicorn companies, right? They
grow into their valuations.
The stocks don't come down to a point
where the valuation makes sense because
these companies, these stocks are very
sought out after,
you know, sought after by investors.
People want to own these stocks because
they believe in the stories, and the
stories are so, you know,
the fundamentals and the story around
the company, it couldn't be better. And
look, Palantir's been showing that to us
for the last couple of years, and the
fact that the stock trades expensive is
it's because that at the end of the day,
there's so much demand to own the stock
for the shares. Uh people want to be a
part of the story, and if it were down
at let's say 20 times earnings,
that would actually scare me. I I I
would be like, why is Palantir down at
20 times earnings? Are investors not
believing in the story as much anymore?
Has the hype died down? Not that it's a
hype stock, but has, you know, has the
investor base fallen apart? That that
would actually alarm me if Palantir
traded down that low.
Uh but at this point,
again, investors believe in the story,
and if it's not if, it is a unicorn
company, and and if a company is a
unicorn company, sometimes the valuation
always seems high on paper, but they
ultimately grow into it, and the stock
never really pulls back to that
valuation that you want to buy it at.
Um just saying, just saying. Not saying
that's guaranteed to happen here with
Palantir. It might collapse, who knows.
Uh but I just don't see it personally.
So, what do you guys think? Let me know
in the comments, hit the like button,
make sure to subscribe, do all that good
stuff, join the Patreon if you want to
be a part of the community, the private
Discord, see my portfolio updates, my
real-time trade alerts, all that's
linked down below, pinned in the
comments, or go to
stasurfast.com/patreon.
And you guys can see it in the
description box, in the bio. It's hard
to miss. I'll see you all in there. And
with that being said, have a great rest
of your day.