After accurately foreseeing the 2008 housing market crash, Michael Burry has now reportedly wagered over $1.6 billion against Wall Street.
Burry, depicted by Christian Bale in the 2015 film “The Big Short,” has taken a bearish position on the S&P 500 and Nasdaq 100, as revealed in Monday’s Security Exchange Commission (SEC) filings, CNN noted.
Michael Burry places a huge leveraged short position on the stock market with put options.
The Big Short Version 2.0 😳 pic.twitter.com/8SHtZ0r4V9
— Wall Street Silver (@WallStreetSilv) August 14, 2023
Burry’s Scion Asset Management fund invested approximately $866 million in put options targeting the S&P 500 and $739 million against the Nasdaq 100, according to the SEC.
Despite the S&P 500 and Nasdaq 100 gaining around 16% and 38% this year, respectively, Burry remains skeptical. These moves account for more than 90% of Burry’s portfolio, underscoring his substantial market pessimism, according to the filings. (RELATED: Financial Expert Explains Why The Economy Is Collapsing In One Perfect Tweet)
Yet, the “Big Short” investor’s convictions have evidently fluctuated over the past year. After initially advising his 1.4 million Twitter followers to “sell” in January, he later retracted his message, admitting, “I was wrong to say sell” two months later.
— Michael Burry Archive (@BurryArchive) February 1, 2023
Although Burry’s historic triumph in 2008 cannot guarantee sustained success, his track record remains undeniably strong. The investor boasts an impressive annualized return of 56% over the last three years, surpassing the S&P 500 by 44%, per an analysis by Sure Dividend.
Scion’s recent actions also included significant divestment from several regional banks, according to CNN Business. Notably, Burry’s fund liquidated its 150,000 shares of First Republic Bank (FRC) along with holdings in Huntington Bank PacWest (PACW) and Western Alliance (WAL), the outlet reported.
Amidst these drastic shifts, Scion’s portfolio retains an approximate 6% stake in long positions, with a focus on certain vital companies, per CNN Business. The fund particularly amplified its involvement in the travel and healthcare sectors, obtaining shares in companies such as MGM Resorts (MGM) and CVS (CVS).