To The Moon

Michael Burry, known for predicting the subprime mortgage crisis, unveiled potential significant bets against the stock market.

Below are the top sells, top buys, top 5 Holdings, and historical performances of Burry's fund. And welcome to give comments on his top buys and sells

According to SEC Filling, Burry’s hedge fund, Scion Asset Management, held put options against 2,000,000 shares of $SPDR S&P 500 ETF Trust(SPY)$ , which tracks $S&P 500(.SPX)$ . The value of these contracts was $886.6 million at the end of June.

Scion also held put options against 2,000,000 shares of $Invesco QQQ Trust-ETF(QQQ)$ , which tracks the technology-heavy $NASDAQ 100(NDX)$ . These contracts were valued at $738.8 million at the end of the second quarter.

As of the reporting date, Scion Asset Management’s U.S. equity holdings were valued at $1.737 billion, with the value of $SPDR S&P 500 ETF Trust(SPY)$ and $Invesco QQQ Trust-ETF(QQQ)$ ’s PUT accounting for 93.59% of the total.

However, considering the trading nature of the put options, the actual premium Burry spent on purchasing these put options is probably only a few million to tens of millions of dollars.

Buying put options is actually ensuring the right to sell assets at a fixed price in the future. This operation is usually regarded as expressing a pessimistic and defensive view of the market.

Investors need to be reminded that the 13F form has very limited reference value for real investments. We do not know if Michael Burry changed his mind in July to now. These put options can also play a hedging role in a larger trading strategy. Thus, the operation of selling options does not need to be included in the 13F form disclosure.

1. Burry‘s top sells in Q223

Recall the performance of the U.S. stock market, which rose steadily from the beginning of the year through the end of July, and has declined in the last two weeks. Burry's fund divested from a number of heavily held stocks at the end of the first quarter, including $Zoom(ZM)$ , $Western Alliance(WAL)$ , $Wells Fargo(WFC)$, $PacWest(PACW)$, $JD.com(JD)$ $Alibaba(BABA)$, etc.

2. Burry's Top Buys in Q223

Burry also bought some U.S. stock targets in the second quarter. For example, he more than doubled his stake in U.S. online second-hand boutique trading platform $The RealReal(REAL)$ and added to diversified media and entertainment company $iHeartMedia, Inc.(IHRT)$, apparel manufacturing and distribution company $Hanesbrands(HBI)$, and well-known entertainment media giant $Warner Bros. Discovery(WBD)$.

This shows that Berry is reallocating his funds to focus on specific stocks. Although he is aggressively bearish on the index, he still has confidence in the fundamentals of some companies and is selectively adjusting his positions.

As of June 30, Scion Asset Management’s third-largest holding was the online travel company $Expedia(EXPE)$, with a total holding of nearly $11 million. The fourth and fifth largest positions are $Charter(CHTR)$ , the second largest cable TV operator in the United States, and $Generac(GNRC)$, an energy technology solutions company, respectively. These three stocks are new positions in the second quarter.

3. What is Burry's fund's historical performance?

Since Michael Burry founded Scion Capital in 2000, until June 2008, he realized a total return on investment of 489.34%.

After the subprime mortgage crisis in 2008, Burry dissolved Scion Capital and focused on personal investment, but he restarted Scion Asset Management in 2013.

Below is Scion Capital’s top 20' weighted holdings‘ return (red line) compare to $S&P 500(.SPX)$ （blue line）since 2020. Still looks pretty good.

Of course, when it comes to investing, past success cannot predict future profitability at all.

In recent years, Burry also shorted the leading electric car $Tesla Motors(TSLA)$ heavily but had to exit and leave the market after $Tesla Motors(TSLA)$'s stock price doubled.

At the end of January 2023, Burry issued a one-word manifesto on social media: Sell.

Then Burry shut down his social media following the market uproar, admitting in March that the claim was false. In recent months, he has also largely stayed out of the public eye.