Core Insights - The podcast discusses three companies that underperformed in 2025: Super Micro Computer, Lululemon, and Nike, and evaluates their potential for recovery in 2026 [3][12]. Super Micro Computer - Super Micro Computer has faced significant challenges, including a loss of confidence from auditors Ernst & Young, which stated they were "unwilling to be associated with the financial statements prepared by management" [3][4]. - The company has taken on $4.4 billion in debt and increased inventory by $3.3 billion, which could pose risks if they cannot sell the inventory at favorable prices [3][4]. - Despite a backlog of $36 billion in expected revenue for fiscal 2026, concerns remain about the company's ability to execute and the potential slowdown in AI demand [7][4]. Lululemon - Lululemon's stock has underperformed the market by approximately 60% year-to-date, attributed to inventory issues and a 5% decline in same-store sales in Q3 2025 [8][9]. - The brand faces competition from emerging brands like HOKA and On, which are gaining popularity among consumers [8][10]. - While Lululemon's price-to-earnings ratio appears attractive, concerns about its long-term brand momentum and potential value trap for investors are raised [10][11]. Nike - Nike has underperformed the market by about 25% year-to-date, facing revenue declines and increased competition from brands like HOKA and On [12][13]. - The company's strategy to withdraw from wholesale customers has not yielded the expected results, leading to difficulties in regaining shelf space with retailers [12][13]. - Analysts express skepticism about Nike's ability to recover in 2026, citing a challenging market environment and a shift in consumer behavior towards direct-to-consumer brands [13][14].

Core Insights - Michael Burry has shared his stock picks after closing his hedge fund to outside cash, expressing a desire to communicate freely without regulatory constraints [1] - Burry's selected stocks include Lululemon Athletica, Molina Healthcare, Shift4 Payments, and Fannie Mae, which he views as long-term holds [2][3] - The current market conditions are seen as favorable for finding undervalued companies due to seasonal selling pressures [1][4] Company Summaries - **Lululemon Athletica**: An athletic-apparel retailer known for premium yoga pants, has seen its shares decline by 52% year-to-date, trading at under 15 times projected earnings [4][5] - **Molina Healthcare**: Provides affordable health insurance and healthcare services, primarily to low-income and senior Americans, with shares down 49% this year, also trading at under 15 times projected earnings [4][5] - **Shift4 Payments**: A fintech company offering payment processing and commercial tools, has experienced a 32% drop in share price year-to-date [4] - **Fannie Mae**: A government-sponsored enterprise that guarantees over $4 trillion in mortgages, its shares have tripled this year amid speculation of privatization [3][5] Market Context - The selected stocks are characterized by their market capitalizations under $25 billion, indicating a focus on smaller, beaten-down stocks [4][5] - Burry's investment strategy emphasizes deep-value opportunities, particularly in the current environment where many managers are reluctant to hold losing positions at year-end [1][4]