Cassandra Unchained @michaeljburry

Understating depreciation by extending useful life of assets artificially boosts earnings -one of the more common frauds of the modern era. Massively ramping capex through purchase of Nvidia chips/servers on a 2-3 yr product cycle should not result in the extension of useful lives of compute equipment. Yet this is exactly what all the hyperscalers have done. By my estimates they will understate depreciation by $176 billion 2026-2028. By 2028, ORCL will overstate earnings 26.9%, META by 20.8%, etc. But it gets worse. More detail coming November 25th. Stay tuned.

Doesn’t surprise me one bit that Alex Karp and his “ontology” @PalantirTech cannot crack a simple 13F. A fundamental principle of any rigorous ontological/epistemological model - whether philosophical or in data science – is recognizing when your information set is insufficient for valid conclusions.