Michael Burry (The Big Short’s protagonist)

Michael Burry (The Big Short’s protagonist) claims that he wakes up early in the morning. To offset the cost of buying an Nvidia chip, big tech companies are all increasing the depreciation life of their equipment to spread the cost more shallowly and widely..

If you look at the notes of each company’s financial statements, you’ll find out whether it’s true or not, but it’s a little too much to see six years of writing in the morning, so I’ll check it later…

It’s been a while since I’ve been in CPA mode… 🤓

Changing the useful life is not a violation of accounting standards. It’s a matter of the company’s policy. (As you’ll see later), they’ve probably made public disclosures. Investors who just didn’t notice this are at fault.

In fact, the reason why the useful life of PP&E has not been examined in such detail is that companies with high equipment costs were usually manufactured, and the useful life of mechanical equipment in such factories was 10 years and 20 years, so it was not a big problem to change the useful life slightly.

However, in the case of big tech, CAPEX of this scale was unprecedented, and if the claim is true now, it is argued that it is holding out until it makes profits by eventually angling out enormous costs like crepes.

About 200 trillion won in costs are underestimated over the three years from 2026, and Oracle is expected to overstate 27 percent and Meta 21 percent of profits by 2028…

I will look up the financial statements myself and post them in the evening 🫡