Michael Burry, the famous investor who accurately predicted the housing market crash in 2008, has placed a massive bet of over $1.6 billion on a potential Wall Street crash. Burry’s bearish bets are against the S&P 500 and Nasdaq 100, according to recent filings with the Security Exchange Commission. This move comes after Burry initially wavered between bullish and bearish predictions earlier this year.
Michael Burry Places $1.6 Billion Bet on Wall Street Crash
Michael Burry, the investor made famous by the book and movie “The Big Short,” has recently placed a massive bet on a potential Wall Street crash. Burry’s fund, Scion Asset Management, has invested over $1.6 billion in put options against funds that track the S&P 500 and Nasdaq 100. This indicates that Burry believes these indices will decline in the near future. Burry gained fame for his accurate prediction of the housing market crash in 2008, and investors are closely watching his latest moves.
Burry’s Bearish Bets Are Against S&P 500 and Nasdaq 100
In his recent filings with the SEC, Michael Burry’s Scion Asset Management revealed its bearish bets against the S&P 500 and Nasdaq 100. Burry’s fund purchased $866 million in put options against a fund that tracks the S&P 500 and $739 million in put options against a fund that tracks the Nasdaq 100. These put options give Burry the right to sell these assets at a specific price, indicating his belief that these indices will experience a significant decline.
Burry’s Portfolio Allocation: over 90% Betting on Market Downturn
According to the recent filings, Michael Burry is allocating more than 90% of his portfolio to bet on a market downturn. This indicates his strong conviction in his bearish outlook. Burry is known for his contrarian investment strategies and his ability to spot investment opportunities that others overlook. While his previous success in predicting the housing market crash doesn’t guarantee future returns, his strong investment track record adds weight to his latest bet.
Scion Asset Management Exits Regional Banks and Chinese Stocks
Burry’s Scion Asset Management has been making some notable moves in its portfolio. The fund recently sold its shares in several regional banks, including First Republic Bank, Huntington Bank PacWest, and Western Alliance. It remains unknown whether these sales occurred before or after JPMorgan Chase took over First Republic Bank in May. Additionally, Burry reversed course on Chinese stocks, selling his shares of JD.com and Alibaba in the second quarter of the year. These moves suggest a shift in Burry’s investment strategy and a cautious approach to certain sectors.
Burry’s Bullish Picks: Expedia, MGM Resorts, CVS, and Cigna
Despite his bearish outlook on the overall market, Michael Burry has made some bullish picks within his portfolio. In the second quarter of the year, Scion Asset Management increased its exposure to the travel and healthcare industry by purchasing shares of Expedia Group, MGM Resorts, CVS, and Cigna. These picks indicate that Burry sees potential in these particular companies, even amid his broader pessimistic view on the market. It will be interesting to see how these investments perform in the coming months.
Michael Burry’s recent $1.6 billion bet on a potential Wall Street crash has attracted significant attention in the financial world. Burry’s accurate prediction of the housing market crash in 2008 has made him a respected figure among investors. While his bearish bets against the S&P 500 and Nasdaq 100 indicate his current outlook, it’s important to remember that past success does not guarantee future returns. Nonetheless, Burry’s strong investment track record adds weight to his latest bet, and investors will continue to closely monitor his moves.
Analyst comment
Positive, Negative, Neutral:
The news can be evaluated as negative as it suggests a potential market downturn.
As an analyst, it can be predicted that the market may experience a decline in the near future due to Burry’s significant bet and bearish outlook on the S&P 500 and Nasdaq 100. Investors will closely monitor his moves and the market performance.
