Dylan, why aren't you going short?

Dear Fellow Investor,

Good morning. Happy Friday!

I’m excited for the weekend. My son has a basketball game.

But first, let’s talk about Michael Burry.

He's famously going short right now, and a buddy of mine (also named Michael, funny enough) asked me why I'm not doing the same.

“He seems pretty logical,” my friend said. “Why aren't you advising us to go short?”

Fair question. Let's dig in.

What Burry Gets Right

Burry and I actually have a lot in common.

We both ran money on Wall Street.

We're about the same age.

We both called the 2008-2009 financial crisis well before it happened — and made a lot of money doing it.

We both publish our ideas publicly now.

The big difference?

He got interviewed in a book that became a massive bestseller and a movie.

So when my buddy asked me why we’re not going short at Behind the Markets, here’s what I told him and what I’ll tell you:

Look, I understand why he’s going short. And he has a great point.

Take Micron as an example.

Memory is one of the most cyclical businesses out there.

We recommended Micron, did very well with it, and then recommended selling — because after almost 35 years doing this, I've learned the chip business runs in brutal cycles.

Memory in particular is basically a commodity.

Prices boom, producers flood in, overcapacity builds, and then the crash comes.

I've watched this movie too many times.

So when Burry says China is expanding DRAM and NAND production capacity at a massive rate, I understand exactly what he's pointing at.

Micron's valuation right now is built on tight supply.

Once China's capacity comes online, that supply constraint disappears — and prices come down with it.

That's a logical argument.

I actually agree with it.

Where We Part Ways

Here's the difference between me and Michael Burry.

I remember a lesson he seems to have forgotten.

I'm not judging the man — I'm just recognizing the symptoms.

Every stock, every market, is always moving in one of two directions: toward price equilibrium, or away from it.

Burry believes memory stocks — and names like Palantir — are so far from equilibrium that a correction is inevitable as China floods the market with cheap supply.

He may be right on the fundamentals.

But being right on value and being right on timing are two very different things.

The Larry Tisch Lesson

I think about Larry Tisch a lot.

Tisch founded Loews, and back when I was in my 20s, he went famously short the market from 1996 to 2000.

He lost $2 billion doing it.

That number — $2 billion — left a permanent mark on how I think about markets.

Tisch was brilliant.

He understood valuation. He understood cycles. He understood what businesses were actually worth.

What he didn't understand is that markets can stay irrational a lot longer than you can stay solvent.

A crowd in deep euphoria can just... keep going.

The party can outlast your wallet.

I remember watching him get interviewed back then, insisting these stocks were wildly overvalued.

He was right on the facts. He was wrong on the timing.

And that's the story he's remembered for — not everything else he built, just the $2 billion he lost betting against a market that refused to listen to reason.

He came at it as a businessman, an operator.

I came up inside the markets, and that difference taught me this lesson early, thankfully.

There's a Larry Tisch in every generation.

There was one in the go-go '60s.

There was one in the roaring '20s.

There's always someone brilliant enough to see the valuation — and unlucky enough to misjudge the timing.

So Where Do I Land on Micron?

I agree with Burry on the fundamentals.

Micron and similar names are overvalued.

The cyclical nature of this business is real, and China flooding the market with competing memory supply will likely crush these stocks eventually.

I can agree with that 1,000%.

What I can't tell you is when.

And that's exactly why I'm not shorting it outright.

If I were going to make a play here, it would be long-dated puts on Micron — not an outright short.

What I'd Rather Bet On

Here’s how I think about a party like this one.

You don’t bet on when it ends. You figure out what the party can’t run without.

Memory is a commodity. Somebody else can always make it — and China is about to prove that.

But some pieces of the AI build-out can’t be swapped out so easily.

Take Elon Musk. His entire AI operation runs on one enormous supercomputer.

And on January 2, 2027, the federal government can pull the plug on it.

Most of his own shareholders don’t know that date exists.

I’ve tracked down one small company that, as far as I can tell, is his only way out.

That’s not a bet on the timing of a crash. It’s a bet on a deadline that’s already on the calendar.

Here’s what I found.

Have a wonderful weekend.

I'll see you Monday.

“The Buck Stops Here,”