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Michael Burry bet big on stocks in the second quarter, swapping out bearish put options for bullish call options and adding several fresh holdings to his portfolio.
The investor of “The Big Short” fame revealed in a quarterly filing on Thursday that he purchased calls on Alibaba, ASML, JD.com, Estee Lauder, Lululemon, Meta, Regeneron, UnitedHealth, and VF last quarter.
Burry’s Scion Asset Management also built direct stakes in Bruker, Lululemon, Regeneron, UnitedHealth, and MercadoLibre, while cutting his direct wager on Estee Lauder from 200,000 shares to 150,000.
The UnitedHealth wager is notable as Warren Buffett, one of Burry’s key influences, also invested in the health insurer last quarter via his Berkshire Hathaway conglomerate.
Call options give investors the right to buy a certain number of a company’s shares at a fixed price within a set period, allowing them to lock in a purchase price that may be lower than the market price. Similarly, investors can use put options to lock in a selling price, allowing them to profit from if the stock price declines.
Scion is known for making big changes to its portfolio between quarters, but this was a particularly striking overhaul. At the end of March, it owned puts on Alibaba, Baidu, JD.com, Nvidia, PDD, and Trip.com worth a notional $186 million, plus a roughly $13 million stake in Estee Lauder. Three months later, it held calls on nine stocks worth a notional $522 million, and a further six direct stakes valued at $56 million.
It’s worth underscoring that Burry may have rejigged his stock bets in recent weeks, and his disclosures may not paint a full picture of his investment strategy.
Quarterly portfolio updates known as 13Fs only provide a snapshot of a firm’s holdings with a six-week lag and exclude shares sold short as well as investments in private companies, foreign-listed assets, and non-stock assets such as bonds and real estate.
Burry shot to fame after predicting and profiting from the collapse of the mid-2000s US housing bubble — a wager that was immortalized in “The Big Short” book and movie adaptation. He’s also known for making grave predictions of market crashes and recessions, investing in GameStop before it became a meme stock, and betting against popular assets such as Tesla, Apple, Nvidia, and the entire S&P 500 index.
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