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Michael Burry is an American hedge fund manager considered to be one of the sharpest minds on Wall Street. Burry soared to prominence after his bold and correct prediction that the subprime mortgage market would collapse in 2007. Not only did Burry correctly predict the subprime mortgage crisis would unfold (which very few other investors predicted), but he also profited handsomely. Through the purchase of credit default swaps from Goldman Sachs (GS - Free Report) (an agreement that the seller of CDS will compensate the buyer in the event of a default) and other big banks on the mortgage bond market, Burry made a windfall profit of $100 million in the months following the housing crisis of 2008. Because of Burry’s rapid ascent and unique personality, Hollywood took notice. In the blockbuster film “The Big Short”, movie star Christian Bale played Michael Burry.
While Burry is best known for his bold short bets, he has also found success on the long side. For example, Burry owned around 5% of GameStop’s (GME - Free Report) shares before it went on its spectacular run.
Image Source: Zacks Investment Research
Though Burry sold before the Reddit-induced meme frenzy sent shares soaring by thousands of percent (Burry likely left nearly a billion dollars on the table), he still came away with around a $100 million profit on the trade.
13F Can Provide Investor Insight
Often, there is a big difference between what an investor says in public and what an investor is actually trading. For instance, in the heat of the pandemic bear market, hedge fund manager Bill Ackman famously warned investors on TV that “hell was coming. Contrary to his warning, Ackman covered his market shorts for a profit of more than $2 billion and bought millions of dollars’ worth of shares in hospitality stocks such as Hilton Worldwide (H - Free Report) . On the same token, Burry often tweets cryptic messages such as the word “sell” and “this time is different.”
Image Source: Zacks Investment Research
Fortunately, investors can cut through the noise and gain valuable insights into what the “smart money” is doing by looking at a 13F. A 13F is a mandatory form filed with the Securities and Exchange Commission by institutional investors who manage more than $100 million in assets. The goal of the 13F is to provide the public with transparency by disclosing the positions held by the institution. Though the 13F offers valuable insight into institutional investor mindset and strategy, 13Fs should be taken with a grain of salt. The form is only required to be filed quarterly so it is not necessarily real-time data.
What is Michael Burry’s Scion Asset Management Buying?
Chinese Equities
The biggest surprise to emerge from Michael Burry’s new purchases is his big bet on China. 18% of the portfolio is allocated to Chinese stocks such as JD.com (JD - Free Report) and Alibaba Group (BABA - Free Report) . After a huge run to close 2022 and start the new year, BABA shares are pulling back to the 50-day moving average for the first time (an attractive zone for those who missed the initial move. BABA is slated to report earnings later this month on February 23rd.
The largest new purchase for Burry was Black Knight Financial Services . Black Knight is a workflow automation, data, and analytics provider to the mortgage and real estate industries.
Meanwhile, Burry's filing showed that he unloaded shares of REIT GEO Group Inc (GEO). The news sens shares plummeting by more than 20% on Tuesday's session.
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3 of "The Big Short's" New Purchases
A Legend is Born
Michael Burry is an American hedge fund manager considered to be one of the sharpest minds on Wall Street. Burry soared to prominence after his bold and correct prediction that the subprime mortgage market would collapse in 2007. Not only did Burry correctly predict the subprime mortgage crisis would unfold (which very few other investors predicted), but he also profited handsomely. Through the purchase of credit default swaps from Goldman Sachs (GS - Free Report) (an agreement that the seller of CDS will compensate the buyer in the event of a default) and other big banks on the mortgage bond market, Burry made a windfall profit of $100 million in the months following the housing crisis of 2008. Because of Burry’s rapid ascent and unique personality, Hollywood took notice. In the blockbuster film “The Big Short”, movie star Christian Bale played Michael Burry.
While Burry is best known for his bold short bets, he has also found success on the long side. For example, Burry owned around 5% of GameStop’s (GME - Free Report) shares before it went on its spectacular run.
Image Source: Zacks Investment Research
Though Burry sold before the Reddit-induced meme frenzy sent shares soaring by thousands of percent (Burry likely left nearly a billion dollars on the table), he still came away with around a $100 million profit on the trade.
13F Can Provide Investor Insight
Often, there is a big difference between what an investor says in public and what an investor is actually trading. For instance, in the heat of the pandemic bear market, hedge fund manager Bill Ackman famously warned investors on TV that “hell was coming. Contrary to his warning, Ackman covered his market shorts for a profit of more than $2 billion and bought millions of dollars’ worth of shares in hospitality stocks such as Hilton Worldwide (H - Free Report) . On the same token, Burry often tweets cryptic messages such as the word “sell” and “this time is different.”
Image Source: Zacks Investment Research
Fortunately, investors can cut through the noise and gain valuable insights into what the “smart money” is doing by looking at a 13F. A 13F is a mandatory form filed with the Securities and Exchange Commission by institutional investors who manage more than $100 million in assets. The goal of the 13F is to provide the public with transparency by disclosing the positions held by the institution. Though the 13F offers valuable insight into institutional investor mindset and strategy, 13Fs should be taken with a grain of salt. The form is only required to be filed quarterly so it is not necessarily real-time data.
What is Michael Burry’s Scion Asset Management Buying?
Chinese Equities
The biggest surprise to emerge from Michael Burry’s new purchases is his big bet on China. 18% of the portfolio is allocated to Chinese stocks such as JD.com (JD - Free Report) and Alibaba Group (BABA - Free Report) . After a huge run to close 2022 and start the new year, BABA shares are pulling back to the 50-day moving average for the first time (an attractive zone for those who missed the initial move. BABA is slated to report earnings later this month on February 23rd.
Image Source: Zacks Investment Research
Travel & Leisure
Two of Burry’s newest purchases are bets on the travel and leisure space – hospitality and casino operator MGM Resorts (MGM - Free Report) and airline Skywest Inc (SKYW - Free Report) . (In case you missed our recent airline piece click here)
Software
The largest new purchase for Burry was Black Knight Financial Services . Black Knight is a workflow automation, data, and analytics provider to the mortgage and real estate industries.
Meanwhile, Burry's filing showed that he unloaded shares of REIT GEO Group Inc (GEO). The news sens shares plummeting by more than 20% on Tuesday's session.