Michael Burry Says One Year Is a ‘Useless’ Way to Judge Investment Skill — ‘We Should All Cut Ourselves Some Slack’

Wall Street has a short memory. A stock that was everyone’s favorite last year can become everyone’s biggest mistake this year. But Scion Asset Management founder Michael Burry says investors shouldn’t confuse a bad 12 months with a bad investment strategy.

Burry, who made millions betting against the U.S. housing market before the 2008 financial crisis, is pushing back against the idea that investment skill can be measured over a single year. In a Monday post on X, he marked the first anniversary of his Cassandra Unchained Substack newsletter with a reminder that even some of the most respected investors in history have endured years of poor performance.

"Cassandra Unchained is in its anniversary month. What this means is we have been around for just 1 year," Burry wrote. "1 year is a useless measure of investment skill. It’s not close to long enough."

Burry became widely known for recognizing that risky home loans had been bundled into mortgage-backed investments that could lose enormous value if borrowers defaulted.

His message isn’t about calling the next market crash. It’s about giving investment decisions more time to play out.

Warren Buffett’s Superinvestors Had Losing Streaks

Burry pointed to Berkshire Hathaway Inc. (NYSE:BRK)(NYSE:BRK) investment legend Warren Buffett’s 1984 essay, "The Superinvestors of Graham-and-Doddsville." The essay profiled investors who followed the value-investing principles of Benjamin Graham and David Dodd.

Rather than chasing popular stocks, these investors searched for companies trading below what they believed their businesses were worth. Yet Burry noted that the Superinvestors lost money for three consecutive years during the mid-1970s.

He also referenced another generation of respected value investors who appeared to have fallen out of favor by March 2000, just as the dot-com bubble was approaching its peak.

During the late 1990s, investors poured money into technology companies, sending growth-stock valuations soaring. Traditional value strategies struggled to keep pace. When the bubble eventually burst, the market’s preferences shifted.

Burry’s point is that an investment strategy can look broken during a period when market conditions favor something else. Judging it too quickly can mean abandoning an approach before its results have had time to emerge.

Burry Points To 2026’s Consumer Confidence Slump

Burry also brought the economic environment into the discussion, describing this year as the worst year for consumer sentiment on record, dating back to 1952.

The University of Michigan’s Consumer Sentiment Index tracks Americans’ views of their personal finances and the broader economy. The index fell to a record low of 44.8 in May, rising to 48.0 in October, according to the university’s final monthly report.

"We are dealing with extremes, and have been for some time," Burry wrote. "We should all cut ourselves some slack for what has gone right and wrong over the last year."

Weak consumer confidence reflects concerns about household finances, prices and the economic outlook. While sentiment readings don’t predict stock-market performance, they help illustrate the uncertainty surrounding the environment in which investors are making decisions.

A Winning Year Doesn’t Prove Investment Skill

Burry’s argument works in both directions. A portfolio that trails the market for 12 months doesn’t automatically signal a bad strategy. A portfolio that surges over the same period doesn’t prove exceptional investing skill, either.

The challenge is separating the quality of an investment decision from the market’s immediate reaction. A company can take years to deliver on its potential, while a popular stock can climb simply because investors are piling into the same trade.

That doesn’t mean every losing investment deserves more time. A sound strategy still requires risk management, regular reviews and a willingness to admit when the original investment thesis no longer holds.

Burry’s own housing-market bet illustrates how difficult it can be to maintain an unpopular position. He recognized the risks in mortgage-backed investments years before the financial crisis made his prediction famous.

His anniversary message offers a reminder that investment performance needs a longer measuring stick. Twelve months can reveal what happened in a portfolio, but they may reveal far less about whether the person making the decisions actually knows what they’re doing.

Photo via Shutterstock