Renowned money manager Michael Burry, appearing in the book and movie “The Big Short,” has taken a bearish stance on the broader market as revealed by recently released securities filings. , quoted by Reuters news agency.
As of the end of the second quarter, Burry’s Scion Asset Management had positioned itself against the S&P 500 Index and Nasdaq 100, using put options to represent this outlook.
During the quarter, Scion Asset Management made strategic moves by buying put options with a nominal value of $739 million against the Invesco QQQ Trust ETF and an additional $886 million in put options on SPDR S&P 500 ETFs.
These put options provide the right to sell the stock at a predetermined price in the future, reflecting a bearish or defensive stance.
The exact cost of acquiring these put options has yet to be disclosed, as regulatory filings are not required to disclose the strike price, cost of purchase, or expiration date.
The filings detail only long positions, leaving uncertainty as to whether the put options are part of larger trades or are held outright.
Burry’s bold bet before the 2008 financial crisis
Burry was famous for his astute bets against the US housing market before the 2008 financial crisis. His story was captured in Michael Lewis’ book “The Big Short” and the film. later transformed.
Despite Burry’s pessimistic outlook, the S&P 500 is up about 17% year-to-date, while the Nasdaq 100 is up nearly 39% over the same period.
This rally was largely driven by the impressive performance of large-cap companies like Nvidia and Meta Platforms.
The filing also revealed that Scion Asset Management’s decision to liquidate stakes in Chinese e-commerce giant JD.com, Alibaba Group Holdings, as well as regional banks including PacWest and Western Alliance Bancorp has been booked. bets in the first quarter.
Furthermore, the company divested 150,000 shares of First Republic Bank, although it did not specify a date regarding the company’s demise on May 1.
Among portfolio adjustments, Scion Asset Management has significantly increased its position in the online luxury goods marketplace RealReal Inc, which has grown by nearly 100% year-to-date. The company also added new shares in iHeartMedia, HanesBrands and Warner Bros. Discover, among others.
Publish to:
August 15, 2023
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