Investor Michael Burry rose to fame after he predicted the 2008 housing market collapse and actor Christian Bale portrayed him in 2015’s “The Big Short.” The film, which won acclaim as one of the best movies about Wall Street, highlighted Burry’s call to “short” the U.S. housing market, betting against the industry by buying collateralized debt obligations, a form of insurance that would pay out big if certain baskets of mortgages imploded.
Burry’s not doing anything like that in early 2024. He’s taking a more traditional route with his Saratoga, California-based hedge fund, Scion Asset Management, buying up shares of established stocks and exiting non-productive put options.
[Sign up for stock news with our Invested newsletter.]
Famed for his technical analysis of market trends and his penchant for zigging when other investors are zagging, Burry’s latest moves signal something of a departure from his more celebrated portfolio plays.
Here’s what Burry was up to with his updated fourth-quarter portfolio:
— Closing unfavorable positions.
— Repositioning Booking Holdings.
— Padding two China plays.
— Adding some big names to the portfolio.
— Selling shares in bulk.
Closing Unfavorable Positions
According to Scion’s Q4 2023 13F filed with the Securities and Exchange Commission, Burry closed out the year by shuttering one of his highest-profile positions: a big bet against the semiconductor sector.
Specifically, Burry cut his losses on a put position on BlackRock Inc.’s (ticker: BLK) benchmark semiconductor fund, iShares Semiconductor ETF (SOXX), that previously represented nearly 48% of the portfolio. Scion had purchased put options worth $47.4 million in notional value (the total theoretical value of a financial security’s position). The Q4 13F showed that Scion has closed out of those options.
Burry doesn’t say much about specific portfolio plays, but Wall Street analysts saw his purchase of the put options as a bet that semiconductor stocks were overvalued and sector share prices would decline. That scenario failed to unfold as the SOXX ETF returned a robust 57.2% in 2023 and is already up 12.9% in 2024 as of March 19, buoyed by sector heavyweights Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD). Those two stocks went on a tear in 2023, returning 239% and 128%, respectively.
It’s also worth mentioning that Burry has a history of betting against high-flying technology stocks and funds. He’s also wagered against Cathie Wood’s flagship Ark Innovation ETF (ARKK) and Elon Musk’s Tesla Inc. (TSLA).
But with BlackRock’s ETF soaring over the past year and in positive territory since Scion’s last 13F was released, Burry’s stake against SOXX looks like a blunder.
Repositioning Booking Holdings
Scion also abandoned its put position in Booking Holdings Inc. (BKNG), a digital travel services platform better known as Priceline (the company changed its formal name to Booking Holdings in 2018). The fund liquidated its $7.8 million worth of BKNG put options in the fourth quarter of 2023. Scion also sold 250 shares of BKNG (not puts), in an apparent balancing act that kept the percentage of the total portfolio allocated to BKNG roughly the same, at 4.7%.
While this liquidation may not be as clear-cut as Burry’s SOXX play, Booking Holdings continues to be a double-digit revenue growth company. The stock is up 44% over the past year as of March 19, as BKNG continues to benefit from the rise in remote work, which enables more career professionals to travel and work simultaneously.
Burry may have been looking for downbeat economy-related or travel-sector news in early 2024 that would have impacted reservations. That sentiment looks doubtful now, as air travel, hotel stays and summer leisure travel numbers are all on the upswing so far this year, according to the U.S. Travel Association.
[SEE: 10 Stocks Warren Buffett Just Bought and Sold]
Padding Two China Plays
Scion also added 50% to its position in China-based e-commerce company Alibaba Group Holding Ltd. (BABA) in the fourth quarter, going from 50,000 shares to 75,000 shares valued at $5.8 million as of mid-March. This seems like a good bet, as Alibaba outperformed in its most recent quarter and management has greenlit a $35 billion share buyback program. The latter move signals confidence in the company and in the stock, which is trading down 5.3% on a year-to-date basis.
Burry also added 60% to his fund’s position in Chinese retailer JD.com Inc. (JD), moving from 125,000 shares owned to 200,000 shares in the fourth quarter of 2023 for a total market value of $5.8 million. JD is one of China’s largest retailers and has outperformed in each of the past four quarters. That performance shows resiliency and growth for a reawakening Chinese consumer economy coming out of stringent COVID-19 lockdowns, after the Chinese government imposed severe regulatory restrictions on national technology companies.
Alibaba and JD.com account for the most prominent positions in the Burry portfolio, at 6.15% and 6.11% of holdings, respectively.
Adding Some Big Names to the Portfolio
Burry also added 18 new stocks to the Scion portfolio in Q4, for a total of 25 stocks. The biggest moves included the following new portfolio stocks:
HCA Healthcare Inc. (HCA)
Scion purchased 20,000 shares of this health care stock, which makes up 5.7% of the portfolio. Closing at $330.48 per share on March 19 and up 22.3% so far this year, HCA is a long-established hospital and medical center provider with deep connections to the state and federal health care agencies that approve new medical buildings and regulate current ones.
That gives HCA a big advantage over new competitors, who must finance the purchase of new medical facilities and clear the regulatory hurdles needed to make those facilities happen.
Oracle Corp. (ORCL)
Burry also snapped up 50,000 shares of information technology giant Oracle, which has a market capitalization of $354 billion and closed at $129.19 per share on March 19. Scion got a nice price boost out of the gate after its purchase in Q4 at about $110. Oracle has a 5.6% portfolio weighting.
Somewhat overlooked as technology industry titans like Microsoft and Nvidia grab the headlines, Oracle is moving swiftly into the cloud computing and artificial intelligence spaces. Providing enterprise and database software is still Oracle’s calling card, but its expansion into the cloud is already paying dividends. The company’s cloud revenues are up 52% in the most recent quarter, and Oracle inked 40 new cloud software development contracts of over $1 billion apiece.
Citigroup Inc. (C)
Scion bought 100,000 shares of Citigroup with a total market value of $5.1 million, adding a new position that accounts for 5.4% of the portfolio.
Early on, it looks as if Burry has another winner with Citigroup. The stock is up 15.5% in 2024 as of March 19. It also offers shareholders a good income story, with C’s forward dividend yield at 3.6%.
CEO Jane Fraser’s three-year overhaul, which weeded out underperforming revenue centers and implemented companywide layoffs, has paid off. Wells Fargo analyst Mike Mayo calls for Citigroup stock to crest $100 per share by 2027, giving Burry more of a sure thing than his latest attempts to bet against markets, 2008 notwithstanding.
Other New Additions
A few other significant additions to Scion’s portfolio in the fourth quarter included 65,000 shares of CVS Health Corp. (CVS) with a market value of $5.1 million, 35,000 shares of Alphabet Inc. (GOOGL) worth $4.9 million and 30,000 shares of Amazon.com Inc. (AMZN) worth $4.6 million.
Selling Shares in Bulk
Burry likes to make big moves, and his offloading of shares in the fourth quarter was no exception. He sold 100% of his stakes in the following:
— Hudson Pacific Properties Inc. (HPP): real estate sector, 2.7% previous weighting in portfolio, sold all 400,000 shares.
— Stellantis NV (STLA): consumer discretionary, 7.7% previous weighting, sold all 400,000 shares.
— Euronav NV (EURN): marine shipping, 4.2% weighting, sold all 250,000 shares.
— Crescent Energy Co. (CRGY): energy, 2.6% weighting, sold all 200,000 shares.
More from U.S. News
Magnificent 7 Stocks: What Are They and How They Dominate the Market
5 Best Free Stock Analysis and Research Tools Online
Michael Burry’s 2024 Portfolio Changes originally appeared on usnews.com
Update 03/20/24: This story was previously published at an earlier date and has been updated with new information.
