The legendary investor has bought shares in hotel and casino giant MGM Resorts International and in Chinese retailers Alibaba and JD.com.
Since the beginning of the year, Michael Burry has never looked so good on his Twitter account.
She called herself “Cassandra BC”. The Cassandras in mythology are doomsayers. Burry seems to suggest that her role now is to be the bearer of bad news. And he’s been delivering it for the past few months to individual investors who follow him and listen for any advice to grow their portfolio or limit possible losses from him.
DO NOT MISS: Ford puts gasoline cars on life support in Europe
Burry appeared bucking the general trend in markets that rallied well last month in hopes that the economic downturn might be less severe than feared. Many economists and analysts believe that the Federal Reserve will be less aggressive in the coming months in its policy of raising interest rates to reduce inflation. According to them, this possible change is likely to cause a soft landing in the economy rather than a particularly devastating hard landing.
Burry advises ‘selling’
This moderate optimism contrasts with the pessimism of Burry, who is convinced that the economy will experience stronger shocks, which will have important consequences for the stock market. Therefore, he anticipates a stock market crash.
The investor who made financial history by betting on the fall in subprime mortgages advised investors to liquidate their shares in January.
“Sell”, wrote the financier on January 31 on his Twitter account. He didn’t say anything else.
The message came the day before a Federal Reserve monetary policy decision on interest rates.
The Fed decided to raise its federal funds rate by 25 basis points (0.25 percentage points) to a range of 4.5% to 4.75%, the highest since 2008. The central bank also said more increases will be needed. to bring inflation closer. and more consistently, toward its 2% target.
This increase, smaller than the previous ones, seemed to suggest that the central bank felt well positioned in its fight against inflation. Contrary to Burry’s advice, investors did not sell. Quite the contrary, since the S&P 500 index closed the day with a rise of more than 1%.
The question is whether he followed his own advice. The answer to this question won’t come before mid-May when Scion Asset Management, its hedge fund, lists its holdings as required by regulators.
Burry expands his portfolio
Meanwhile, Burry appears to have gambled on the recovery of the economy in China and the United States late last year when Scion Asset Management acquired 100,000 shares of hotel and casino giant MGM Resorts International. (MGM) – Get a free reportand financial instruments linked to the Chinese e-commerce giant Alibaba (slime) – Get a free reportand the largest Chinese retailer JD.com (JDCMF) according to rregulatory submissions.
As of December 31, Scion owned 100,000 MGM shares. At that time, the value of this stake was $3.35 million. This value has risen this year to $4.42 million, as MGM shares have gained nearly 32% this year. Therefore, the gain would be almost $1.1 million in less than three months if Burry had not sold these shares since then.
MGM Resorts International controls iconic properties including Bellagio, Mandalay Bay, Aria and MGM Grand in Las Vegas, as well as international properties such as MGM Cotai in Macau and MGM Grand Sanya in China.
He also has interests in gaming and entertainment companies, including online gaming and sports betting.
By acquiring MGM stock, Burry bet that consumers would continue to spend on travel and entertainment.
In addition, the financier also invested in Chinese firms Alibaba and JD.com during the fourth quarter of 2022, through sponsored ADRs (American Depositary Receipts), according to regulatory documents. These tradable certificates gave him ownership of 50,000 shares of Alibaba and 75,000 of JD.com.
China lifted its lockdown measures related to the covid-19 pandemic in the fourth quarter of last year, reopening its economy after nearly two years.
In total, Burry’s portfolio consisted of nine companies, up from six in the third quarter. Only GEO and Qurate Retail held up quarter-over-quarter. The financier got rid of the shares of the other four groups that he had at the end of September, Aerojet Rocketdyne, Charter Communications, Corecivic Inc and Liberty Latin America.
In addition to MGM, Alibaba, JD.com, Geo and Qurate Retail, Burry also owned shares in Coherent Corp., Skywest Inc, Black Knight Inc. and Wolverine World Wide as of December 31.
Stock market regulations require fund managers with more than $100 million in US stocks to file a document, a 13F, within 45 days of the end of the quarter, listing their holdings in publicly traded stocks. on US stock exchanges