Michael “Big Short” Burry liquidates almost his entire portfolio. Surrender or “Preparing for the Worst”?
Scion Investiment, Michael Burry's company, has liquidated almost all of its positions, especially the "Call" and "Put" options, ie forward buy and sell, and now his portfolio appears empty. Michael Burry is known for predicting the 2007 real estate bubble, for anticipating the Gamestop boom, and for being an unconventional but often brilliant investor in general.
Let's see what is the latest Scion 13F form just published for the third quarter ended September 30, in which the stock market positions are necessarily revealed. As shown in the table below, after building a very aggressive portfolio over the past few quarters, including billions of notionals between calls and puts, Burry appears to have destroyed his portfolio in the third quarter ended September: out of 22 total positions (including options) present at the end of the second quarter, ie June 30, Scion now holds only six stakes, all of which are “Long” stocks, ie investment stocks.
His best known "Short" (ie against), ie those against Tesla and the Ark fund, were closed, and the same happened for the long positions (buy) on Facebook and Alphabet / Google. In the end, he was left with investments in a handful of stocks: CVS Helth (Pharmacies) GEO Group, Corevic, Lockheed Martin, Now and Scynexis. Technology and pharmaceuticals.
The closing of the positions against Tesla, done with the stock at high prices almost two months ago, certainly cost him a lot of money, while the other closings did not bring him strong profits. So why did he make them? Here are my two hypotheses:
- he feels that the market is drugged by the Fed's expansive policy and that therefore the short, forward sell positions, do not make sense when the prices do not reflect the real values of the companies (See the Tesla and Rivian cases);
- he expects a major storm in the markets and wants to remain liquid.
It won't take long to know the truth.
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The Michael “Big Short” Burry article liquidates almost his entire portfolio. Surrender or "Preparing for the Worst"? comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/michael-big-short-burry-liquida-quasi-tutto-il-suo-portafoglio-resa-o-preparazione-al-peggio/ on Tue, 16 Nov 2021 11:00:07 +0000.