After Michael Burry, the investor made famous in the book and film ‘The Big Short,’ appeared to bet on a major downturn in the US stock market, his track record of market predictions is in the spotlight.

A securities filing earlier this week showed that Burry held bearish put options against shares tracking the S&P 500 and Nasdaq 100 Index worth a combined $1.6 billion at the end of the second quarter. 

That figure refers to the value of the underlying securities, not the price of the options, and it is unclear how much money Burry actually put on the line or whether his position is part of a more complex trade or hedging strategy.

The filing also revealed Burry has taken sizeable new long positions in companies involved in luxury retail, travel and tourism, and media, suggesting he is optimistic about sectors that normally suffer badly in a recession.   

Burry, 52, shot to fame by correctly predicting the 2008 subprime mortgage crisis that triggered the Great Recession, and made some $100 million personally and $700 million for his investors by betting against the housing bubble.

Some of Michael Burry's notable predictions are seen alongside prices for the S&P 500

Some of Michael Burry’s notable predictions are seen alongside prices for the S&P 500 

Michael Burry is seen in 2010.  Burry held bearish put options against shares tracking the S&P 500 and Nasdaq 100 Index worth a combined $1.6 billion at the end of the second quarter

Michael Burry is seen in 2010.  Burry held bearish put options against shares tracking the S&P 500 and Nasdaq 100 Index worth a combined $1.6 billion at the end of the second quarter

On Twitter, he goes by the moniker ‘Cassandra B.C.’ in an apparent reference to the priestess from Greek mythology who was fated by the gods to utter true prophesies, but never be believed.

Burry, a medical doctor by training, is a long-short value investor, meaning he seeks out fundamentally undervalued assets to invest in, and looks for overvalued assets to bet against.

He is married with children, and lives in California, but maintains a low public profile, interacting with journalists primarily through email. 

Burry’s fame and success mean that he has legions of fans who monitor his financial disclosures and attempt to emulate his trades — but he also attracts critics and detractors, who are eager to pick apart his predictions and track record. 

He first gained notice and outsized returns for investors in his fund in the early 2000s, by shorting high-flying tech stocks during the peak of the Dot Com bubble. 

Burry then surged to fame with his bets against the US housing market before the 2008 financial crisis. 

Michael Lewis’ nonfiction book ‘The Big Short’ was released in 2010 and the movie version came out in 2015, with Christian Bale portraying Burry.

Christian Bale portrayed Burry in the 2015 film The Big Short. Burry rose to fame with his bets against the US housing market before the 2008 financial crisis.

Christian Bale portrayed Burry in the 2015 film The Big Short. Burry rose to fame with his bets against the US housing market before the 2008 financial crisis.

Burry issued a warning to 'sell' in January, but later backtracked and admitted he was wrong

Burry issued a warning to ‘sell’ in January, but later backtracked and admitted he was wrong

However, some of Burry’s other dire predictions of bubbles and market crashes have appeared to misfire — or, as he might argue, perhaps they just came early. 

Most recently, he issued the dire one-word warning ‘Sell’ on Twitter in January of this year, only for Wall Street’s main stock indexes to march upward.

In March, he admitted his error, tweeting ‘I was wrong to say sell’ before deleting his Twitter account once again.

In September 2019, Burry also made headlines for a Bloomberg interview in which he warned of a bubble in market index funds due to a craze for passive investing. 

He even compared the situation to the pre-2008 bubble in collateralized debt obligations, the complex mortgage-backed securities that imploded and spurred the financial crisis.

No similar meltdown of index funds ever occurred — but months later, when the onset of the pandemic sent global markets crashing in March 2020, Burry revealed that his bearish positions were paying off. 

In late 2020, he initiated short positions against Tesla and called the stock overvalued, but later said it was just ‘a trade’ and that he’d exited the position after Tesla’s stock continued to soar, according to CNBC

In February 2021, he warned his Twitter followers that the stock market was ‘dancing on a knife’s edge’ and in danger of collapse, according to Insider. Markets continued to surge through 2021 before a prolonged sell-off through much of 2022.

However, Burry has also made prescient predictions related to inflation, first warning of inflation risk as early as April 2020, before prices began to rise, and then correctly calling a peak to inflation last June, when annual inflation topped out at more than 9 percent.  

Burry has also argued that while his predictions may appear wrong, sometimes they are just too early. 

Indeed, his 2005 call of a housing bubble initially cost his fund dearly as the housing market continued to rise for two years, before ultimately paying off when the market began to collapse in late 2007.

‘Just getting one thing right is hard,’ Burry said in a tweet last summer, responding to his critics. 

The Nasdaq composite is up nearly 32 percent for the year, fueled by outsized gains in a handful of tech megacap companies such as Nvidia and Meta

The Nasdaq composite is up nearly 32 percent for the year, fueled by outsized gains in a handful of tech megacap companies such as Nvidia and Meta

So far this year, the S&P 500 is up roughly 17 percent and in a new bull market

So far this year, the S&P 500 is up roughly 17 percent and in a new bull market

Burry made headlines again this week with a disclosure showing what appears to be a large new bearish bet against the market. 

Burry did not respond to a request for comment about his market outlook on Wednesday. 

Regulatory filings show his Scion Asset Management bought put options against $739 million worth of shares in the popular Invesco QQQ Trust ETF during the last quarter, and separate put options against $886 million worth of the SPDR S&P 500 ETF.

Put options convey the right to sell shares at a fixed price in the future. They typically increase in value if the price of the underlying stock declines, making them a defensive bet.

The dollar amounts of the positions refer to the value of the underlying securities, but the new filings do not reveal how much money Burry paid for the options.

Options contracts grant the holder the right to buy (in the case of calls) or sell (in the case of puts) a block of 100 shares of the security in question, at a specific price and by a specific date.

Their value can swing rapidly, depending on the strike price and expiration date, based on more modest changes to the price of the underlying security. 

It was not clear how Burry’s recent options bets against the Nasdaq and S&P 500 had fared, given that regulatory filings do not show the terms of the contracts, including their expiry and strike price. 

And since the filings disclose only long positions, it was also not clear whether the puts were held outright or against other contracts that were held short.

That means Burry’s bets against the market may be part of a more complex trade or long-term strategy that can’t be deduced from the filing alone.

So far this year, the S&P 500 is up roughly 17 percent, while the Nasdaq composite is up nearly 32 percent over the same period. 

Outsized gains in a handful of tech megacap companies such as Nvidia and Meta have fueled much of the year’s rally.

Big tech stocks have been fueled by investor excitement in the potential applications of artificial intelligence, as well as the prospect that the Federal Reserve will soon end its inflation-fighting rate hikes. 

Meanwhile, Burry’s fund has also liquidated its stakes in Chinese e-commerce companies JD.com and Alibaba Group Holdings, as well as regional banks PacWest and Western Alliance Bancorp, the new filing shows.

The fund also increased its holdings in stocks related to oil and gas, media, and travel and tourism. 

Among its long positions, the fund more than doubled its stake in online luxury goods market RealReal Inc, which is up nearly 100 percent for the year to date.

It also added new stakes in iHeartMedia, Carter Communications, and Warner Bros. Discovery, among others, the filing showed.

The fund also added a huge new position in Expedia Group worth $10.9 million, and a block of shares in MGM Resorts International worth $6.6 million. 

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