Michael Burry made a name for himself by betting against the mid‑2000s housing bubble. These days, he is betting on a different kind of long‑term value: the kind you can watch on a screen.
In a Substack post published last Friday, Burry laid out a simple comparison between two entertainment giants. Disney makes wine, he said. Netflix makes milk.
"One lasts and even gets better with time, one is just fine for now, but most certainly does not get better with age," Burry wrote.
The point is not about what you drink. It is about what a piece of content does for a company years down the road. Disney owns characters and stories like "Star Wars," "The Avengers," "Toy Story," and "Moana." Those properties get recycled into movies, TV shows, theme park rides, and toys.
Netflix, on the other hand, produces original shows and movies that come and go. Burry says they do not have that same staying power.
"Netflix's other content has not struck me as evergreen," he wrote.
Burry has often applied the "evergreen test" "to Netflix, he said, to probe whether it makes TV shows and movies that are" "long‑lasting, watchable on repeat, across generations."
"Disney, Pixar, these produce evergreen content," he wrote. "Even Warner Brothers with Harry Potter and a few others."
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According to Burry, the show Suits became a viral hit on Netflix, but the profits mainly went to the people who made it, not to the platform itself.
Burry's milk‑versus‑wine analogy lands at a rough time for Netflix. Last summer, shares traded for over $130.
The slide did not come out of nowhere. In April 2022, Netflix lost subscribers for the first time in over ten years. That same month, Burry tweeted a warning: "The competition came for Netflix."
He was right. Intense rivalry has made it more difficult for Netflix to keep its users happy and protect its profit margins. Revenue and subscriber growth have slowed. Wall Street started asking whether Netflix could keep charging higher prices when so many alternatives exist.
Burry thinks the answer is no, at least in part because of the content itself. Netflix produces hit after hit. But a hit does not guarantee a lasting asset.
Disney can put a classic movie on a shelf and dust it off decades later. Netflix's library does not have that kind of built‑in durability.
Burry did not call Netflix a doomed company. He simply said its stock did not look like an "obvious bargain" even after the big drop. That is a cautious take from someone who has a track record of spotting value where others see only trouble.
For investors, the milk‑versus‑wine idea is worth thinking about beyond just these two stocks. Plenty of companies rely on content that ages fast. Streaming, social media, and gaming all depend on what is hot right now.
Companies that own intellectual property with lasting appeal - like Disney's characters or a classic film library - have a different kind of moat. Those assets do not fade when the next trend comes along.
That does not mean Netflix is a bad investment. It means the math is different. When you buy a stock, you are betting on what the company will earn over many years.
If the content needs constant replacement, the costs stay high. If the competition keeps growing, pricing power shrinks.
Disney is not immune to those pressures either. But its wine collection - those characters and worlds that families revisit for generations - gives it something Netflix has to build from scratch every season. That is a difference worth watching, especially when the market gets nervous about slowing growth everywhere.
Burry's point was simple. Some things get better with age. Some things just go sour. Knowing which is which matters a lot more than a stock's recent price tag.
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