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In today’s post:
🚨 Last Seen: March 2020
💰 Burry Banks 25% Of His Bet
😬 Cisco Fell 89%. Nvidia Next?
The 5 Stocks Nvidia Can't Grow Without
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🚨 Last Seen: March 2020
Retail just sold stocks like it's March 2020.
On Thursday, retail investors dumped individual stocks at the fastest pace since the pandemic crash.
Yes, that March 2020.
📉 The Damage
By midafternoon Thursday:
Dow: down 1,728 points (3.2%)
S&P 500: down 4%
Nasdaq: down 5%
All of this came one day after markets threw a party over the midterm election results.
The hangover showed up early.
🛒 The Dip-Buyers Clocked Out
Retail usually has one move. Stocks fall, retail buys. It's practically a religion.
Thursday, the congregation stayed home. Retail net outflows from single stocks hit $338 million shortly before the close, per Vanda Research.
That makes it the third-biggest day of retail single-stock selling on record.
The only two bigger days? March 12 and March 17, 2020.
That's company you don't want to keep.
The buying that did happen went straight into leveraged ETFs like TQQQ $TQQQ ( ▼ 18.92% ) (3x Nasdaq) and SOXL $SOXL ( ▼ 38.71% ) (3x chip stocks).
So retail sold the stocks and bought the rocket fuel. Very on brand.
🏦 Nobody Left To Catch It
Retail wasn't alone at the exits.
Institutional call buying slumped to a one-year low earlier in the week. The big money had already stopped betting on upside.
Leveraged ETFs faced an estimated $42B to $48B in forced rebalancing into the close. That's more than 120x what retail sold.
Volatility-target funds were de-risking too. These are robots programmed to sell when markets get bumpy. They did their job.
Vanda's Viraj Patel says this kind of pile-up is rarely seen outside periods of acute market stress.
So it looks like every safety net took the same day off.
🧠 What It Means For You
Big drops usually find a floor because someone steps in to buy.
On Thursday, retail, institutions, and the algos were all selling at once. That's how a bad day starts to feel like a trapdoor.
Worth knowing: a chunk of this selling was mechanical.
Rebalancing and vol-target funds sell because their rules say so, whatever the underlying companies are doing.
The thing to watch now is whether the dip-buying crowd comes back, or whether Thursday broke the habit.
Retail ran for the exits Thursday. What did you do?
The Mineral Everyone Forgets Until Their Driveway Freezes Over
Most people couldn't tell you what scandium is for, but everyone knows what happens when roads go unsalted. North America keeps running short, and Atlas Salt (TSXV: SALT) is building a shovel-ready mine in Newfoundland, three days by ship from Boston, with C$188 million in projected yearly free cash flow.
The AI stock that keeps raising prices just got cut in half.
Broken company, or broken funding market? The answer decides what happens next.
Here's what's public:
Revenue grew 454% last quarter
GPU prices on its flagship chips are up 56%
Management is targeting $7B to $9B in run-rate revenue by year-end, up from $3.0B
The stock is down 53%
So why the selloff?
Building AI data centres is brutally expensive. Management guided to $20B to $25B of capex this year, and the CEO admits some financing has temporarily dried up.
The market is punishing whoever leans hardest on borrowed money. Meanwhile, demand for the chips keeps pushing prices higher.
Earnings land Thursday, November 12. That's when one of those two stories breaks.
Inside today's Premium+ deep dive:
The one number on Thursday's call that matters more than revenue
What Wall Street's Q3 estimate is quietly assuming
How the valuation stacks up if guidance holds, and if it doesn't
The risk we're watching closest, and what would change our mind
💰 Burry Banks 25% Of His Bet
Michael Burry just cashed in on the chip crash.
The Big Short guy sold 25% of his put options on $SMH ( ▼ 11.21% ), the $59 billion VanEck Semiconductor ETF, to lock in profits.
The timing was perfect. SMH just finished down 11.2%.
Tech just fell down the stairs:
SMH (chip stocks): -11.2%
QQQ (Nasdaq-100): -6.5%
Nasdaq Composite: -5.5%, deep in correction territory
If you've opened your brokerage app lately, you already know. Sorry.
🎯 The Big Short, AI Edition
Quick refresher: a put option pays off when a price falls. Think of it as fire insurance on a house you're pretty sure is about to go up in flames.
Burry's SMH puts are a bet against the whole AI chip squad: Nvidia, TSMC, AMD, Broadcom and Micron.
He's been setting this up for a while. In October 2026, he moved most of his bearish bets into SMH and QQQ puts that expire in 2027.
His call back then? A potential significant market top within nine months.
So far, the market is playing along.
Don't mistake the trim for a white flag, though. Burry says his remaining SMH puts have "become very large positions."
The bet worked so well it got uncomfortably big. Nice problem to have.
He's also keeping his puts on:
Caterpillar $CAT ( ▼ 6.37% )
Oracle $ORCL ( ▼ 6.93% )
Palantir $PLTR ( ▼ 9.73% )
QQQ, the Nasdaq-100 tracker
Then the plot twist: he went shopping. He added to his MercadoLibre stake after earnings, buying shares below $1,500.
Even the market's most famous pessimist can't resist a sale.
🧠 What It Means For Your Money
Taking profits doesn't mean Burry has changed his mind. He's betting the chip selloff moved fast, and that it isn't done yet.
If your portfolio leans heavily on the Nasdaq or chip stocks, it overlaps a lot with Burry's target list. It's worth knowing when one of the most-watched bears on Wall Street is betting against what you own.
He's also on a timer. His puts expire in 2027, and his market-top call has a nine-month window.
Famous bears can be early. Early and wrong look the same right up until they don't.
😬 Cisco Fell 89%. Nvidia Next?
Nvidia is now 8% of the entire S&P 500.
At the peak of the dot-com bubble, Cisco was half that.
Then Cisco fell 89%.
Veteran investor George Noble thinks Nvidia is making the same mistake.
Here's why…
🔁 The Cisco Playbook
Noble was an analyst for Peter Lynch, so he's watched a few bubbles pop.
Back in 2000, Cisco had a problem. Its telecom startup customers couldn't afford its gear.
So Cisco lent them the money to buy Cisco equipment. This is called vendor financing.
It's basically lending your mate a tenner so he can buy your old bike. Great sales numbers. Questionable mate.
Then the telecoms collapsed.
Cisco shares dropped 89%, and the S&P 500 fell by half. Ouch.
🤖 Nvidia's Remix
Noble says Nvidia is walking into the "exact same" trap, with a modern twist. It's:
Guaranteeing customer lease agreements on its hardware
Taking equity stakes in startups that then buy its chips
Nvidia is helping fund the customers who buy its chips. The money goes round in a circle, and Nvidia books the sales.
The catch?
The more chips Nvidia sells this way, the more exposed it gets if those customers can't keep up with their bills.
Noble didn't mince words: "This is the biggest misallocation of capital in history."
Subtle stuff.
📉 The Chart Isn't Helping
Noble backed it up with a chart from macro investor Sam Kovacs. It shows Nvidia's multi-year run squeezing into a rising wedge.
A rising wedge means the price keeps climbing, but each leg up gets narrower and weaker. Technical analysts treat it as a bearish reversal signal.
Think of a party where the music's still loud but people are quietly looking for their coats.
The zoomed-in view shows NVDA starting to slip below the wedge's lower support line.
It's also trading below its 200-day moving average, a line traders watch to tell an uptrend from a downtrend.
🧠 What It Means For Your Money
If you own an S&P 500 index fund, you own a big slice of Nvidia whether you chose it or not.
At 8%, that's roughly $8 of every $100 you've put in.
So this story matters even if you've never bought a single NVDA share.
Things worth keeping an eye on:
Concentration cuts both ways. Nvidia helped drag the index up, and it can drag it down too.
Vendor financing shows up on the balance sheet. Customer guarantees and stakes are worth watching in future filings.
This is one investor's bear case. Warnings like this can be right on direction and wrong on timing for a long time.
Nobody rings a bell at the top. Some people do post charts on social media, though.
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