michael burrywho inspired the film The Big Short (The Big Bet) for predicting and taking advantage of the financial crisis of 2008, now warns of a coming Wall Street crash. But, beyond the words, the famous investor is taking action, since his latest stock market movements coincide with his latest prediction: an upcoming ‘crash’ in the stock market.
Recently, this Wall Street star investor shared a prediction about the markets: he foresees a new “crash” in the North American stock market by the end of 2023.
Michael Burry bets on a new collapse in the markets
According to documents of the United States Securities and Exchange Commission (SEC)cited by CNN, Burry made a big bearish bet. Specific, is betting about $1.6 billion against the Nasdaq-100 and Standard & Poor’s 500 (S&P 500)anticipating a drop in both indices, key to the US economy.
The report notes that the investor bought $866 million in put options against a fund that tracks the S&P 500. At the same time, she acquired 739 million in options against a fund that follows the Nasdaq-100.
In simple words, it can be said that Michael Burry and his holding company, Scion Asset Management, bet $1.6 billion against the market. The medium calculates that the investor you are risking losing 93% total of your portfolio.
The well-known investor pointed out that it is misleading to say that he acquired $1.6 billion in put options against S&P and Nasdaq.
“The real value of the put options I bought is much less,” said Michael Burry.
Burry’s moves have investors on hold
The astute fund manager also made major changes to his investment portfolio. In the second quarter, Scion leaned toward mining, shipping and energy stocksand dumped its stakes in Chinese tech companies and banks.
Michael Burry sold his shares in two Chinese internet giants: Alibaba and JD.com. It also closed its holdings in Capital one and Wells Fargoas well as in regional banks First Republic, Western Alliance, Huntington Bank and PacWest Bancorpwhich are still a risk.
On the other hand, the former doctor added Crescent Energy, Comstock Resources, Precision Drilling, Star Bulk Carriers and stellantis to your wallet. Despite the drastic moves, Scion’s total portfolio value was almost unchanged in $111 millionnot counting the options.
Michael Burry is not the only big financial guru who is moving his assets in disturbing ways. Just a few weeks ago Warren Buffett He made his most defensive move in 10 years, selling shares through Berkshire Hathaway and starting to hoard cash.
Mairem Del Rio Addicted to watching series and movies, doing (a little) exercise and changing my hair color. I am also a journalist, with more than 16 years of experience and dedicated 100% to digital media since 2011. I have been from a reporter and community manager, to an editor in various media and agencies. My areas of expertise are as diverse as they are contrasting: entertainment, travel, lifestyle, health, business, and finance. Now I am focused on the entrepreneurial ecosystem, cryptocurrencies, NFTs, metaverses and the promising cannabis industry in Mexico.