Renowned investor Michael Burry, known for his famous bet against the housing bubble in the mid-2000s, has recently revealed his new positions that suggest a cautious outlook on the markets. These moves may not come as a surprise to those who closely follow his investment strategies.
According to The Business Insider
In the latest portfolio update from his Scion Asset Management, it was disclosed that Burry had taken bearish put options on the SPDR S&P 500 ETF Trust, an ETF tracking the widely watched S&P 500 index. Additionally, he also revealed holdings of puts on the Invesco QQQ Trust, which tracks the Nasdaq-100 index, heavily weighted towards technology stocks. These holdings totaled a substantial $1.6 billion as of June 30, reflecting Burry’s conviction in his positions.
While these positions could potentially serve as hedges against a potential market downturn, they could also indicate Burry’s skepticism about the two index funds. These funds are known for their exposure to high-valuation stocks such as Tesla and Nvidia, which may carry inherent risks.
Burry has been vocal about his concerns regarding the markets for some time. He has compared the current situation to the dot-com bubble and predicted significant market declines in the past. He even suggested that the S&P 500 might experience a substantial drop of around 57% from its current levels, drawing parallels with previous market crashes.
The investor has also criticized the rise of passive investing and the influx of millennial money into index funds and ETFs. He has labeled this trend as a potential bubble and warned that it could lead to massive losses for investors.
Despite his cautionary stance, it’s important to note that Burry has also made adjustments to his investment strategy, showing that he’s not solely bearish on the market. However, with the S&P 500 and Nasdaq-100 showing significant gains this year, it’s reasonable to infer that Burry may still harbor reservations about the overall health of the market. In the end, Burry’s investment decisions reflect his assessment of the market’s current state. His track record of predicting market trends and crashes adds weight to his latest moves. Investors and observers will be watching closely to see how these positions play out in the coming months.
Sources:
https://finance.yahoo.com/news/big-short-investor-michael-burrys-164131345.html
Connect with us