Michael Burry shorts Nvidia and Palantir… Louis Navellier’s reaction… the “entry price” AI trade with long legs… how to invest in it… the trade Jonathan Rose says could 10X and even 20X your portfolio
A fund manager – who’s not an AI expert – placed a bet against two AI leaders…
According to legendary investor Louis Navellier, that’s the quick explanation for why the market is selling off as I write on Tuesday.
If you missed the headlines this morning, Michael Burry of Scion Asset Management disclosed that he bought put options on Nvidia (NVDA) and Palantir (PLTR). The news is reigniting fears of lofty AI valuations and questionable monetization, resulting in a widespread selloff.
You may recognize Burry as the hero of the movie “The Big Short.” He correctly predicted the 2008 housing market collapse, making a boatload of money from it.
Of course, I’m still waiting for the sequels that highlighted Burry’s short bet against Tesla in 2021 that doesn’t appear to have been a winner… or his single word post on X (formerly Twitter) in January of 2023 simply stating “SELL” – right before the market surged about 19% that year… or his puts against the S&P in August of 2023 that he had to close out because the market kept climbing…
We’d be wise to remember that one correct call does not make a perpetual market Nostradamus.
Here’s Louis from this morning’s Growth Investor Flash Alert Podcast:
So, is Michael Burry – this expert who apparently could foresee the housing market peak in 2008 – is this expert an AI technology expert?
The answer is, of course not. He’s just someone that looks at what’s running and tries to prick the bubble, that’s all.
And that was the reaction we’re getting today.
Palantir’s CEO Alex Karp had a fun take on the short:
The two companies he’s shorting are the ones making all the money, which is super weird…
I do think this behavior is egregious and I’m going to be dancing around when it’s proven wrong.
Louis goes on to call Palantir a “screaming buy,” and says that if you haven’t bought Nvidia, “today is your chance.”
Given that there isn’t much of a story here, let’s jump to Louis’ bottom line:
So, we can have these little flash corrections, but they’re all buying opportunities, okay?
Just like nine days ago, that was a great buy – today is a great buy.
So, do not let this distract you. There’s nothing to worry about.
For the latest AI leaders that Louis is buying, you can check out his free research package right here.
That said, if you remain nervous about the valuations of the most prominent AI names, we have an alternative for you…
It’s an opportunity based on a critical reality…
Regardless of which companies eventually win the AI race, every company that competes will have to pay the same “entry price,” so to speak.
So, while we can speculate about owning tomorrow’s AI winners, the surer bet is to hitch our wealth to the entry price itself.
And what’s that, exactly?
The metals that are crucial for building all things “AI.”
Let’s go to trading expert Jonathan Rose:
Retail traders tend to look at the right trends through the lens of the wrong stocks.
It’s why they buy shares in Nvidia to capitalize on chip proliferation – but they know nothing about the key suppliers providing the minerals Nvidia needs to build its products.
That’s the bait-and-switch of the stock market.
The noisiest stocks suck up all the oxygen. But the smaller players with room to run?
They’re hiding in plain sight.
The AI revolution is a metals boom in disguise
Take copper, a metal that we’ve urged investors to own for years now.
It’s critical for AI due to its excellent electrical and thermal conductivity (second to silver but more cost-effective). This makes it essential for managing the significant power and heat generated by AI systems.
Copper is integral to every part of the AI infrastructure boom – from the power grid, to cooling systems, to data transmission, to the AI chips themselves.
So, all these headlines you’ve been reading for months now about new data center buildouts and deals where the hyperscalers are buying power?
They might as well read “copper is going higher.”
From Goldman Sachs:
Grid upgrades are metals-intensive: we expect grid and power infrastructure to drive ~60% of global copper demand growth through the end of the decade, adding the equivalent of another US to global demand and underpinning our bullish copper price forecast of $10,750/t by 2027.
Did you catch that – the equivalent of another U.S. added to global demand?
But it’s not just copper. AI devours an array of critical metals.
Back to Jonathan:
Materials like copper, platinum, palladium, and more are the backbone of the modern mineral supply chain.
Each material goes into everything from the latest AI-equipped chips to EV batteries and drones – you name them, these materials are essential.
The face of these technologies? Companies like Meta, Microsoft, Tesla, Lucid, and on and on.
But on the back end? It’s a different story.
Our global macro investing expert Eric Fry agrees with Jonathan
In yesterday’s Digest, we highlighted our Preferred Member Quarterly Call interview with our Editor-in-Chief and fellow Digest writer, Luis Hernandez and Eric.
Let’s pick up with Luis steering the conversation toward metals:
Luis: There doesn’t seem to be an end coming to this boom in critical minerals. Do you think it’s going to last through the decade?
Eric: Yes. I mean, it’s not just critical. They’re essential. They’re essential for military applications. They’re essential for a lot of technological hardware…
I think we’re looking at a five-year span or end-of-the-decade span where all core metals are going to be in huge demand, and where demand generally will outpace supply, either by a lot or by a little.
So, I think it’s a great sector to be broadly involved in over the next few years.
How do we play it?
If you want the set-it-and-forget-it option, you could invest across a basket of metals-related ETFs.
Here are three quick ideas for your research:
- The Global X Copper Miners ETF (COPX) gives you exposure to a basket of leading copper miners
- The VanEck Rare Earth/Strategic Metals ETF (REMX) holds leading rare earth plays
- And the Sprott Critical Materials ETF (SETM) offers a range of critical material and mining stocks tied to AI
If you want to zero in on specific miners, there are plenty to choose from, though Eric offers a word of caution about chasing rare earths at this point:
I think I’m in the minority here, but I don’t believe that at this stage [rare earths are] creating some vast new wave of opportunity.
Quite a while ago, in my speculative service The Speculator, we recommended Lynas Corp. (LYSCF), which is the rarest producer in Australia. But that stock is up 700% since I recommended it.
And I think if you look across the rare earth spectrum, you’d see a lot of stocks like that. They’ve already had their play.
One stock that Eric suggests hasn’t “had its play” is Alcoa (AA). It’s the largest aluminum company in the U.S., holding about 84% of the market share.
I’ll circle back in a future Digest to flesh out this opportunity.
Returning to Jonathan, he has a different, unique take on how to play this metals boom
Rather than buy either an ETF or a leading miner, then play the waiting game, Jonathan times his entries. He puts down money only after a catalyst has emerged, suggesting a big move.
He monitors the big-money players, watching to see when one has made a potentially market-shifting bet. To this end, Jonathan has developed a market screener to signal when institutional traders make big bets in the market, telegraphing their convictions. He says that this “tells you where the smart money is going before the move happens.”
As one illustration, Jonathan used this tool months ago in the metals space.
It had tipped him off that something big was happening in the deep-sea mining sector. So, he recommended his subscribers open a position in that little-known rare earth company on June 30.
Here’s Jonthan with how it played out:
When the Pentagon funding hit on July 9, the news sent shockwaves through the market.
By the next morning, MP was already sprinting — ultimately more than doubling from our entry.
When the smoke eventually cleared, the broad MP trade was a monster winner, and one tranche of Jonathan’s trade returned his subscribers about 700%.
Back to Jonathan:
That 700% gain on MP Materials wasn’t luck.
It was grounded in fundamentals: insider activity, policy shifts, and data we tracked in real time.
And I want every reader to feel empowered to trade the same insights I use daily.
This coming Monday, November 10th at 1 PM ET, Jonathan will go deeper into how he trades the market, and how he uses his screening tool to find trades with triple-digit return potential
Most times, these trades parallel the themes driving recommendations from our other experts, Eric, Louis Navellier, and Luke Lango – it’s just that Jonathan approaches them as a shorter-term trader, using a system can amplify gains.
Back to Jonathan:
I want to show you exactly how my approach could help you 10X and even 20X your portfolio in mere months.
Back on the trading floor, this is how we made our living – spotting when institutional players were positioning and getting ahead of the retail crowd.
Now, my subscribers are doing the same thing.
They didn’t do anything crazy. They didn’t roll the dice. They followed a structured, repeatable approach based on real market relationships.
That’s the only way I know how to teach. I plan to go deeper into these insights next Monday at my Profit Surge Event at 1PM ET.
By the way, just for signing up for Jonathan’s event, you’ll get three free stock picks immediately.
To reserve your seat for Jonathan and next Monday, click here.
Circling back to the opportunity in metals
Whether you choose to trade it over shorter timeframes or invest in it over the next few years, this is another no-brainer set-up for one simple reason…
AI is the future – and the future runs on metals.
Every new datacenter, every next-generation chip, every electric vehicle and every energy grid upgrade feeds into the same industrial pipeline.
Goldman projects that copper deficits will widen through the decade. And the International Energy Agency warns that demand for critical minerals could quadruple by 2040 under current tech-growth trends.
So, even if Michael Burry ends up being right, there still will be a massive demand for the materials that make AI innovations possible.
Whether you choose to trade explosive short-term moves fueled by the Big Money like Jonathan or build a long-term metals portfolio like Eric, the setup is the same…
Soaring demand, limited supply, and trillion-dollar trends are converging. And best of all, this isn’t hype – it’s math!
We’ll keep you updated here in the Digest.
Have a good evening,
Jeff Remsburg
