RESOLVING THE LEDGER
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See the full story · 2 sourcesMichael Burry of "The Big Short" fame. Bloomberg/Getty Images
Michael Burry says it's the right time to read "The Smartest Guys in the Room."
The "Big Short" star recommended the classic book about Enron on X, saying, "history is repeating."
Enron used aggressive accounting, special vehicles, and circular financing to boost its stock price.
Looking for a beach read this summer? Michael Burry of "The Big Short" fame has a recommendation.
In a late Tuesday post on X, Burry shared a link to an Amazon listing for "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron."
" History is repeating ," he wrote. "Time to read this one again, or for the first time."
The business classic, written by investigative journalists Bethany McLean and Peter Elkind and first published in 2003, tells the story of Enron, the fraudulent energy titan that collapsed into what was then the biggest bankruptcy in US history in December 2001.
History is repeating. Time to read this one again, or for the first time. The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron https://t.co/JUMxf339lZ #Amazon via @Amazon pic.twitter.com/aeNb286AdK
— Cassandra Unchained (@michaeljburry) August 12, 2026
The energy supplier and trading powerhouse used a series of financial tricks to perpetrate its fraud. It used mark-to-market accounting to book the entire projected value of long-term contracts as immediate profit. It also used special-purpose entities and circular financing deals to keep huge debts off its balance sheet, manufacture earnings, and inflate its stock price.
Former Goldman Sachs CEO Lloyd Blankfein said in his recent memoir that Enron was at one point the "bane of my existence." Goldman couldn't figure out how Enron was ostensibly making so much more money in energy and commodity markets, and profitably trading bandwidth.
"As we learnt later, Enron was an enormous fraud," Blankfein wrote. "It was accumulating unhedged, long-dated risk that it marked at levels it could trade out at."
Burry didn't elaborate on what he meant by "history is repeating," but it was likely in reference to his frequent criticisms of big AI companies in recent months.
He's said they're overspending on microchips and data centers, dragging out depreciation to flatter their earnings, striking circular financing deals to fuel the buzz around AI, and using off-balance-sheet structures to disguise leverage and risk.
Burry didn't immediately respond to a request for comment from Business Insider.
Jim Chanos, another short-seller known for spotting the red flags at Enron and betting it would crumble, has also questioned whether the tech titans pumping hundreds of billions of dollars into AI infrastructure will see a return on their money.
Burry, whose contrarian wager against the mid-2000s housing bubble was chronicled in the book and movie "The Big Short," pivoted from running a hedge fund to writing about his personal portfolio on Substack late last year.
He's bet against a raft of major AI players in recent months, including Nvidia, Palantir, Oracle, Nebius, and Micron.
Burry has raised this specter before, suggesting after the collapse of Silicon Valley Bank in early 2023: "It is possible today we found our Enron ."
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