Monday, May 20, 2024

Michael Burry Places $1.6 Billion Bet Against Market: ‘Big Short’ Protagonist Takes Negative View on S&P 500 and Nasdaq

In recent filings submitted to regulatory authorities and made public on Monday, well-known hedge fund manager Michael Burry, whose famous exploits were portrayed in the movie “The Big Short,” has taken a pessimistic stance on the financial market. Through his investment firm Scion Asset Management, Burry has initiated short positions on both the S&P 500 and Nasdaq 100 indices as the second quarter came to a close. This move signifies his wager of approximately $1.6 billion on an anticipated forthcoming collapse in the stock market.

New ‘Big Short’? Michael Burry Bets $1.6 Billion Against QQQ and SPY

Michael Burry is evidently revisiting his bearish outlook on Wall Street, as indicated by the most recent 13F filing with the Securities and Exchange Commission (SEC) by Scion Asset Management. The filing unveils a significant acquisition of put options targeting Invesco QQQ ETF (NASDAQ: QQQ) and SPDR S&P 500 ETF Trust (NYSEARCA: SPY). The total value of these options is estimated at $1.62 billion, making up a remarkable 93% of Scion’s disclosed holdings.

Within this substantial bet, around $738.8 million has been directed at QQQ, while approximately $886.6 million is focused on SPY. Despite the resilient performance of the S&P 500 and Nasdaq 100 indices thus far in 2023, the precise details of Burry’s transactions, including purchase prices and expiration dates, remain undisclosed. Given Burry’s previous successful predictions during the 2008 financial crisis, his strategic moves in the market continue to be closely observed. However, in an unexpected twist, Burry shifted his stance from a selling perspective in January 2023 to admitting his misjudgment by April.

He openly acknowledged his mistake in advocating for sales, even extending congratulations to the “BTFD generation.” Alongside these audacious actions, Scion’s recent filing uncovers long positions in various companies such as Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna. It was around the same period last year, in August 2022, that Burry started predicting a prolonged economic downturn in the United States, adopting a more pessimistic viewpoint.

In March, Burry likened the collapse of three major banks to the financial Panic of 1907. The most recent SEC filings indicate that Scion has divested from exposure to Western Alliance Bancorp and Pacwest. As August 2023 unfolds, both the S&P 500 and Nasdaq 100 have shown retreats against the U.S. dollar, experiencing declines of approximately 2% to 3% respectively during this month. The 13F filing also discloses that Scion has sold off its investments in Alibaba Group and JD.com.

Feel free to share your opinions and thoughts on Michael Burry’s bearish bets in the comments section below.

Frequently Asked Questions (FAQs) about Bearish Investment

Who is Michael Burry and what is his recent investment move?

Michael Burry is a renowned hedge fund manager, famously depicted in “The Big Short.” He has taken a bearish stance on the market, shorting the S&P 500 and Nasdaq 100 indices, wagering about $1.6 billion on an impending stock market collapse.

What are the details of Michael Burry’s recent investment strategy?

Burry’s Scion Asset Management has acquired put options against Invesco QQQ ETF (QQQ) and SPDR S&P 500 ETF Trust (SPY), with a total notional value of $1.62 billion. The QQQ bet is approximately $738.8 million, while the SPY bet is about $886.6 million.

How has Michael Burry’s market outlook changed recently?

Burry’s stance shifted from selling positions in January 2023 to admitting his mistake by April. He openly acknowledged his error and congratulated the “BTFD generation” for their investment choices.

What other investments has Scion Asset Management made?

Scion’s recent filing reveals long positions in companies like Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna.

What previous successful predictions is Michael Burry known for?

Michael Burry gained fame for predicting and profiting from the 2008 financial crisis, a move that was depicted in the movie “The Big Short.” His accurate forecasts garnered attention and scrutiny from market observers.

How has the market responded to Burry’s recent bets?

Despite the strong performance of the S&P 500 and Nasdaq 100 in 2023, Burry’s bearish bets have drawn attention due to his past successes and influence in the financial industry. His investment moves can impact market sentiment and behavior.

Are there any indications of Burry’s past market predictions?

Burry predicted a multi-year recession in the United States around August 2022, and in March, he likened three major bank collapses to the Panic of 1907.

What recent changes in Scion’s holdings have been revealed?

The most recent SEC filings show that Scion has eliminated exposure to Western Alliance Bancorp and Pacwest. Additionally, Scion has divested its holdings in Alibaba Group and JD.com.

How have the S&P 500 and Nasdaq 100 performed in the recent period?

As of August 2023, both the S&P 500 and Nasdaq 100 have experienced declines against the U.S. dollar, showing retreats of approximately 2% to 3% respectively during the month.

What can you share about the general sentiment towards Burry’s short bets?

Burry’s market moves are closely watched due to his past success. However, opinions about his recent short bets vary, with some skeptical of his outlook while others consider his track record when assessing their impact.

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