If you follow investment trends, then you may already be familiar with the name Michael Burry. He is the main character in the book and movie titled The Big Short where he accurately predicted the burst of the housing bubble back in 2008. Since then, investors have been paying attention to what Michael Burry has been doing with his investment firm Scion Asset Management. Do you know how to follow Michael Burry and his investments?
You can invest with Michael Burry's Scion Value G7 Fund with a minimum investment of $500,000. If you don't have this kind of money, you can follow his investments on sites like Fintel. Currently, he is betting against ARK, Tesla, and long-term bonds.
For more information on this man and his investments, here is everything you need to know.
Who is Michael Burry?
Many investors are already familiar with the incredible insight into the market that Michael Burry has. However, few people know the history behind the man. Understanding where he has been and how he operates can be key to understanding whether you want to follow his personal and professional investment strategy.
Burry actually did not start out as an investor. Instead, he is a trained physician who maintains his license despite not actually practicing medicine. He began a residency in neurology at Stanford Hospital but never actually finished. Michael Burry decided that his true passion was in investing.
Most people are familiar with his story because of the movie The Big Short. Paramount Pictures cast the movie with such strong names as Christian Bale (playing Michael Burry), Steve Carell, Ryan Gosling, and Brad Pitt.
This movie was based on his 2005 belief that the market would collapse as a result of the housing bubble. The film depicts the journey Burry took of betting against market-based mortgage-backed securities.
He had invested more than $1 billion, and clients were angry when he refused to reverse his position and sell. Eventually, his theory was proved correct and he earned over $2.69 billion for his own investments and those of his clients.
Today, Michael Burry continues to make educated bets against the market. Many people are eager to hear of his investments given his long track record of massive financial success. While he may work only with an exclusive group of investors, others are trying to copy his financial successes and will heed his warnings about future market crashes.
How to Follow Michael Burry – Investing with Scion
Whether you are just starting out as an investor or are a seasoned professional, you might be wondering whether you can jump on the bandwagon with Michael Burry. What does it take to be able to invest directly into his funds and to copy his investment strategy?
Unfortunately, he takes an exclusive number of clients with a minimum investment amount. At the moment, he caters to just five individuals for discretionary investment advice. However, you could be added to the list if you have a sizeable financial contribution to make to his investment pools.
If you want to invest in Scion Asia, Scion G7, or Scion G7 Offshore, there is typically a $1 million minimum investment.
For those who don’t have a spare $1 million in their bank account, you might have one more option. Burry also offers a Scion Value G7 Fund which requires a much lower minimum account size. This fund only requires a $500,000 minimum account size. They also require that all investors are accredited.
Of course, Scion does reserve the right to make exceptions to the minimum investment requirements. If you think you are close and would like to try investing under Burry’s funds, then you may want to reach out.
How to Follow Michael Burry on Social Media
Social media is a thriving entity that allows you to follow all of your favorite celebrities. A lot of Michael Burry’s fans loved following him on Twitter for his short soundbites on the market and what stocks were trending.
Unfortunately, the ability to follow him on Twitter has been short-lived as his account was deleted back in the early part of 2021.
What led the investment superstar to shy away from social media? He made a few statements about GameStop Corp. and other market trends that he was seeing. While his fans were more than appreciative for his insight, the Securities and Exchange Commission felt differently about his helpful tips to others.
The tweets prompted a visit from SEC, and his Twitter account was promptly deleted.
If you want to follow what Burry is doing, you will now have to be a bit more creative by following his filings and paying attention to updates in the news. Maybe one day he will return to his @michaeljburry account on Twitter to feed his predictions to the masses once again.
Michael Burry Current Investments
For those who are eager to know where Michael Burry sees the future going, they might be interested in looking more at his current investments. You don’t have to be a client to take advantage of his investment strategy. It is easily available on Fintel for all to see.
Based on his last filing at the end of June 2021, he was holding stocks for the following companies:
- Scorpio Tankers Inc. (STNG)
- Marinus Pharmaceuticals Inc (MRNS)
- Golden Ocean Group Ltd (GOGL)
- CVS Health Corop (CVS)
- SunCoke Energy Inc (SXC)
- Corecivic (CXW)
In addition to these, he also has call and put options on some fairly well-known companies. One of his most recent bets is against ARK Innovation ETF (ARKK). He has 235,500 shares against the outcome of this particular fund. He also has quite a few put options against Tesla Motors Inc. (TSLA), but we will look at this one more closely in the next section.
He has call options on popular companies such as:
- Walmart Inc (WMT)
- CVS Health Corp (CVS)
- Facebook Inc (FB)
- Alphabet Inc. Class C (GOOG)
- Kraft Heinz Co (KHC)
Michael Burry Tesla Stock
One of the main investment strategies that Michael Burry promotes is his belief that Tesla stock is going to tank in the near future. He believes that the company and their CEO Elon Musk consistently overpromise and underdeliver.
As a result, he has put options against the Tesla stock that are valued at more than $500 million. This brings him up to 1.1 million shares, up from just three months ago. He is fairly confident in his prediction about the future of Tesla’s value.
What does this really mean?
A put option gives Burry the opportunity to hold a short-selling position and earn a profit. When the value of the Tesla stock dips below the strike price before the expiration period, he has the right to exercise the option at the strike price.
In other words, he is betting that the price of Tesla stock will take a tumble in the near future.
Michael Burry Bitcoin and Meme Stock
Many people trust Dr. Burry’s insights into the stock market. Perhaps this is why so many became alarmed when he claimed that the “mother of all crashes” was coming soon as a result of crypto and meme stocks. He believes that the hype and speculation is drawing in retail before the major crash occurs.
Burry claims that when the cryptocurrency and meme stock values tumble, Main Street losses will be close to the size of countries.
He was an early adopter of popular meme stock, most notably GameStop. Avid followers will note that it is no longer in his portfolio though. On this particular sale, his 1.7 million shares ended up being worth a total of $17 million.
Despite his prediction that GameStop was a meme stock with a unique setup for making money, the company continues to do well. Prices continue to be up almost 1000 percent over where they were in the previous years. It seems that there has been no crash of this meme stock just yet.
The same could be true for bitcoin. Experts state that cryptocurrency reaches an all-time high once every four years. Historically, it has taken a slight fall after each of these high points. They believe that it will still bounce back despite the claims of Michael Burry.
Scion Asset Management Portfolio 2021
If you are thinking about making some major investment moves, you might want to try your hand at copying the financial savvy of well-known investors like Michael Burry. You may not have the same capital at your disposal, but you can still replicate some of his investments. All you need to know is where he has the most money invested.
Fortunately, it isn’t hard to find out where all of his investment funds go.
For those who want to mimic Dr. Burry, here are his greatest holdings by percentage of the portfolio:
- DISCK (18.02% of his portfolio)
- OVV (13.73% of his portfolio)
- GEO (12.94% of his portfolio)
- CVS (12.13% of his portfolio)
- CXW (9.9% of his portfolio)
- STNG (9.62% of his portfolio)
- MRNS (8.15% of his portfolio)
- SXC (8.12% of his portfolio)
- GOGL (5.62% of his portfolio)
- VYGG (1.05% of his portfolio)
You can purchase a few individual stocks for your own portfolio from this selection, and you may even yield similar results to what Burry gets from his major investments. If you plan to copy his trading moves, you might even want to try to get the percentages of your portfolio to equal Burry’s holdings.
Learn more about how to finance an iPhone with bad credit in our other complete guide here.
Scion Asset Management Return
Before you decide to follow Michael Burry’s investments, you might be wondering just how much of a return his Scion Asset Management really gets. The returns are the indicator of a successful investor. How much money he makes for his investors each quarter is relatively easy to find, and you might be impressed by his results.
If we look at the third quarter of 2020, he had minimal gains. His portfolio value was worth $315,294 at the start and ended at just $330,268. However, it grew dramatically over the course of 2021.
During the second quarter of this year, his starting portfolio value was just $224,698, but he finished the quarter with an impressive $1,353,930. The most recent quarter saw even bigger gains for his portfolio with an ending value of $2,081,933.
Current Predictions About the Market
In addition to betting against Tesla and the ARK Innovation ETF, Burry has made some big claims about where he sees the market heading. Not only is bitcoin and meme stock destined to crash soon, but he also believes that long-term bonds are going to decline.
This is one claim that may have some merit to it. As inflation rises, Burry is betting on interest rates rising as well. He is holding several positions that bet against the value of long-term bonds.
Scion Asset Management held $280 million of put options on the iShares 20+ Year Treasury Bond ETF (TLT) at the end of June. His bet is that treasury yields are likely to increase, which will lead to a fall in the TLT. If this happens, his bet will pay off handsomely.
How to Follow Michael Burry
If you want to successfully invest in the stock market, then you might want to know how to follow Michael Burry and his investments. Pay close attention to his analysis of the market, and you just might find yourself in a winning position!