Latest news with #ScionAssetManagement
News.com.au
3 days ago
- Business
- News.com.au
Famous investor's huge move sparks fears for the economy
A prominent investor and multi-millionaire has made a huge move amid growing concerns about the global economy. Michael Burry – one of the first investors to predict and profit from the subprime mortgage crisis that occurred between 2007 and 2010 – has turned sceptical on stocks, dramatically slashing the portfolio of his Scion Asset Management company. As revealed by recent SEC filings, Burry's Scion Asset Management has liquidated most of its equity holdings in a sign that the investor is bracing for a hard market crash. The company cut the size of its portfolio to just seven stocks in the first quarter, according to a regulatory filing in May. This is down from 13 stocks in the previous quarter. Shares sold by Scion include Alibaba (BABA), Baidu (BIDU), (JD), and PDD Holdings (PDD). Meanwhile, the company's position in beauty giant Estée Lauder doubled, to 200,000 shares. Burry, who was portrayed by Christian Bale in the 2015 movie The Big Shor t is well known for spotting market bubbles, and has issued a string of warnings over recent years – some of which haven't come true. Burry has also slashed shares before – raising eyebrows in 2023 when he cut most of his holdings. Later, he discovered that it wasn't the greatest move. The investor's move comes amid uncertainty on Wall Street over US President Donald Trump's trade war and the Big Beautiful Bill, which could saddle America with a staggering $4 trillion in debt over the next decade. Currently, America's national debt stands at $USD36 ($AUD56) trillion, a figure that dwarfs defence spending as a proportion of the country's GDP. What's more, US Treasuries are on track for their first monthly loss this year due to Trump's abrupt policy shifts, which have shaken the confidence of investors. Those investors include Burry and JPMorgan chief Jamie Dimon, with Dimon declaring at an economic forum on Friday that a 'crack' was about to appear in the bond market, which happens when investors no longer have confidence in the government and its ability to service its debt. He also stated that government 'mismanagement' could potentially 'kill us'. 'I just don't know if it's going to be a crisis in six months or six years, and I'm hoping that we change both the trajectory of the debt and the ability of market makers to make markets,' the JPMorgan Chase & Co. chief executive officer said Friday at the Reagan National Economic Forum. 'Unfortunately, it may be that we need that to wake us up.' Dimon had a bleak prediction for most investors. 'I'm telling you it's going to happen, and you're going to panic. I'm not going to panic. We'll be fine. We'll probably make more money,' he said. When it comes to Australia's economic future, Treasurer Jim Chalmers said in May that managing the risk from the global economic uncertainty is a priority. He said the 'spectrum of scenarios' posed by the global outlook was 'much broader' following the impact of Donald Trump's trade war. The spotlight is well and truly on the increasingly volatile US and China relationship. The Treasurer has also stated that boosting productivity will be the focus of the Albanese government's second term, while still reining in inflation.
Daily Mail
4 days ago
- Business
- Daily Mail
Big Short investor Michael Burry liquidates entire portfolio - except for one stock
Michael Burry, the investor who famously bet against the US housing market before the 2008 crash, has once again sounded the alarm and dumped all of his stock - except one. In a dramatic move revealed by recent SEC filings, Burry's Scion Asset Management has slashed its portfolio to just seven positions. Six of them are aggressive short bets: bearish put options against some of the biggest names in tech and Chinese equities, including Nvidia, Alibaba, and Baidu. Only one company appears to have managed to retain Burry's faith: Estee Lauder, where Burry has doubled down, boosting his holdings to 200,000 shares valued at $13.2 million. While cosmetics may be an unusual choice ahead of a potential financial meltdown, it's not without logic. In times of economic distress, consumers often indulge in small luxuries even as they forego big-ticket items - a phenomenon known as the 'lipstick index.' When wallets tighten, lipsticks replace dresses; with small indulgences offer a balm for economic wounds. Under new CEO Stephane de La Faverie, Estee Lauder is trying to reassert itself in a struggling global beauty market, particularly in North America and China. Bearish has taken out aggressive short bets: bearish put options against some of the biggest names in tech and Chinese equities, including Alibaba and Baidu Only one company appears to have managed to retain Burry's faith: Estee Lauder, where Burry has doubled down, boosting his holdings to 200,000 shares valued at $13.2 million. Product launches have accelerated. Luxury price tiers have been introduced. Still, Estee's stock is down 15% year-to-date, although it did gain 2% on Friday amid broader market turmoil. 'Burry's bet suggests belief in Estee Lauder's ability to reclaim its status as a beauty powerhouse in an increasingly competitive global market,' said Angeli Gianchandani, a global brand marketing expert at New York University. Burry appears to be bracing for a hard crash when it comes to the market and there are warning signs that have not been seen since the depths of the 2008 crisis. Burry rose 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. He also profited in the early 2000s by shorting high-flying tech stocks during the peak of the Dot Com bubble. However, his bets have sometime appeared to misfire. In late 2020, he initiated short positions against Tesla stock, but later said it was just 'a trade' and he'd exited the position after Tesla's stock continued to soar. This also isn't the first time Burry has gutted his portfolio. In 2023, he famously dumped most of his holdings only to later admit he was wrong. Markets are also seeing a flight to alternative assets. Gold has surged 24% year-to-date, outperforming Bitcoin's 12% gain, as investors hedge against a weakening U.S. dollar down 8% this year. Bitcoin has caught a second wind as well, bolstered by adoption from both corporations and state governments. Arizona and New Hampshire have passed legislation establishing strategic Bitcoin reserves and wwo dozen more states are considering similar measures. Not everyone is convinced, however, and JPMorgan's analysts recently noted that while Bitcoin may offer high returns, gold remains the safer bet for risk-averse investors seeking protection against geopolitical risks and currency debasement. 'We are skeptical that Bitcoin and other crypto assets offer the potential to improve portfolio resilience. Despite their low correlations to traditional assets, crypto assets have historically made portfolios more fragile,' JPMorgan analysts wrote. In the bond market, yields on the 10-year Treasury note have surged to 4.54%, while 30-year bonds are touching pre-2008 crisis levels above 5%. The moves can be seen unsettling because of their cause - the fear that Washington is about to unleash a new wave of new debt. With Moody's recently downgrading America's credit rating, concerns about fiscal instability have only deepened, reinforcing investor skepticism about the sustainability of Washington's approach. House Republicans, steered by Speaker Mike Johnson and under the watchful eye of Donald Trump, muscled through the so-called 'One Big Beautiful Bill' - a sprawling package of tax cuts and spending increases that could, according to the nonpartisan Congressional Budget Office, add $3.8 trillion to the deficit over the next decade. 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 but has not always been right With yields rising, equities look increasingly vulnerable as a place to park cash. The S&P 500 has clawed back most of the losses incurred when Donald Trump introduced his tariffs back in April. Mortgage rates are at highs not seen since the Great Recession with the average contract interest rate for a 30-year fixed-rate mortgage close to 6.92%. Credit card and auto loan rates are surging. Households and businesses are feeling the squeeze. And while politicians in Washington plays games with tax breaks and entitlement cuts, real Americans are bracing for impact. Cuts to Medicaid and food stamps loom on the horizon. Healthcare for millions could be stripped away. SNAP benefits could shrink hitting low-income Americans the hardest. 'This bill is a debt bomb ticking,' warned Rep. Thomas Massie (R-Ky.). 'I'd love to stand here and tell the American people, "We can cut your taxes and increase spending and everything's going to be just fine." But I can't do that because I'm here to deliver a dose of reality. This bill dramatically increases deficits in the near term but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises? This bill is a debt bomb ticking.'
Yahoo
6 days ago
- Business
- Yahoo
New ETFs Offer Exposure to Top Picks of Elite Investors
On Wednesday, Tidal Trust filed with the Securities and Exchange Commission to offer seven exchange-traded funds that may look familiar if you invest in funds from successful investors. The preliminary prospectus shows that VistaShares plans to launch the following new ETFs: VistaShares Pershing Square Select ETF VistaShares Target 15 Pershing Square Select Income ETF VistaShares Scion Asset Management Select ETF VistaShares Target 15 Scion Asset Management Select Income ETF VistaShares Duquesne Select ETF VistaShares Target 15 Duquesne Select Income ETF VistaShares Berkshire Select ETF The funds are based on other firms' 13F filings. Tidal Investments LLC is listed as the investment adviser of the funds while VistaShares Advisors LLC is listed as the subadviser. The management fees and tickers were not included in the filing, and the effective date would be August 11, 2025. The various funds would offer investors access to investment picks of some of the most famous and successful investors, such as Michael Burry of Scion Asset Management—best known for his part in predicting the 2008 stock market crash that went on to be portrayed in the film "The Big Short"—and hedge fund manager Bill Ackman, who runs Pershing Square Holdings. The VistaShares Pershing Square Select ETF, for example, invests in a portfolio of stocks based on the BITA VistaShares Pershing Square Capital Management Portfolio Top Picks Index, which includes up to 20 equities selected by Pershing Square. The other firms whose picks VistaShares includes in the new offerings are the Duquesne Family Office, run by Stanley Druckenmiller, and Warren Buffett's Berkshire Hathaway. This isn't a new move for VistaShares. In March, the firm launched the VistaShares Target 15 Berkshire Select Income ETF (OMAH), which provides investors with exposure to some of Berkshire Hathaway's most representative equity holdings. Smaller ETF issuers are looking for ways to offer innovative solutions for the "alternatives" sleeve of investor portfolios because there are already many low-cost, core ETFs available from large ETF issuers like Blackrock and Vanguard, who have the scale to sustain very low fees, Aniket Ullal, senior vice president and head of ETF research and analytics with CFRA, told 'Targeting more niche strategies allows issuers to stay profitable by charging higher fees for more specialized solutions,' Ullal | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
25-05-2025
- Business
- Globe and Mail
Michael Burry Is Betting Against Nvidia Stock. Should You Follow the ‘Big Short' Star and Sell NVDA Now?
The most recent 13F from legendary investor Michael Burry's Scion Asset Management shows that he has put options on NVDA. This filing was current as of March 31, and comes at a time when Nvidia is still running hot with solid fundamentals. When the company reports its fiscal first-quarter earnings due on May 28, analysts across the board expect Nvidia to overshoot expectations once more. Burry, apparently, is not so confident. Michael Burry rose to notoriety as he made millions from predicting the subprime mortgage crisis and shorting the housing market. Individual investors now follow his portfolio closely and tend to take his bearish warnings to heart. Should ordinary shareholders dump NVDA just because the Big Short hero has seemingly turned skeptical on Nvidia? Let's take a look. Michael Burry Shorts Nvidia Scion's first‑quarter form 13F lists just seven positions and highlights put options on Nvidia alongside bearish wagers against Alibaba (BABA), Baidu (BIDU), JD (JD), PDD Holdings (PDD), and (TRIP). The notional value of those puts is included in Scion's $199 million of reportable assets, yet the document does not reveal strike price, expiration, or whether the contracts hedge undisclosed long positions . In other words, we know Burry is negative on Nvidia, but we do not know if he expects a swift collapse or just wants insurance on an unseen long position. There is a chance that he may hold long positions that are not eligible to be disclosed on the filing. Burry has leaned bearish before and not always for long. He bought $1.6 billion of S&P 500 Index ($SPX) and Nasdaq‑100 Index ($IUXX) puts in mid‑2023, then closed them at a profit within one quarter. He shorted Tesla (TSLA) in 2021 and bailed months later. History shows that he trades around catalysts rather than sitting on ideological shorts. Investors should also note that while Burry is largely influential, it is never wise to follow an individual without doing your own research and evaluating your own investment thesis. Following Burry alone is not a guarantee of gains. How This Could Play Out Nvidia has been beating forecasts for the past two years, and Blackwell chips are still sold out. There's no indication that the company has taken a big hit, minus the tariff-related charges of $5.5 billion announced earlier. Management guided for $43 billion in Q1 revenue, which was above the $41 billion Wall Street estimated back then. On top of that, most hyperscalers have only increased their capital expenditure forecasts in recent earnings reports. Their data centers run almost exclusively on Nvidia's silicon. So, Nvidia could simply continue what it has been doing. Or, Burry could be the odd one out again. There are two ways I see Nvidia failing. The first one is a bigger-than-expected hit from the Q1 U.S.-China trade war, and the second is a production bottleneck. The Blackwell bottleneck from design flaws has been lingering around since Q3 2024, and Nvidia still performed well, so it's unlikely to be a big problem now. The first scenario is likely what Burry is betting on. Should You Follow Burry on NVDA stock? Michael Burry is betting big on a broader market decline, and this could be just another short-term move. Nvidia releases its earnings soon, and considering the stock is sitting on a fresh rally, it could move down due to technical reasons ahead of earnings before fundamentals take over. I'd recommend sticking to your own thesis (whether bullish or bearish) on Nvidia instead of letting one person dictate your moves.
Globe and Mail
19-05-2025
- Business
- Globe and Mail
After Nearly Dumping His Entire Portfolio and Buying Puts on Nvidia, Did Famed Investor Michael Burry Just Pull Off Another "Big Short?" It Certainly Looks That Way.
If you've seen the movie The Big Short, which is based on the novel by Michael Lewis and features acclaimed actors Steve Carrell, Christian Bale, Ryan Gosling, and Jeremy Strong, then you probably know who Michael Burry is. The former Stanford neurology resident rose to prominence while posting stock ideas online during the early days of the internet. His ideas were so good that he eventually left the medical field to launch his own fund. Prior to the Great Recession, Burry correctly bet against the housing market, making hundreds of millions in profits for his fund, Scion Capital. Now, Burry runs another fund called Scion Asset Management, which happened to sell nearly all of its stocks in the first quarter, while also buying put options. Did Burry just pull off another "big short" trade? It certainly looks that way. Burry timed the tariff-induced sell-off perfectly Burry never runs too large of a portfolio, typically holding about a dozen stocks, plus or minus a few. In the first quarter, he sold nearly all of his holdings. He had been quite bullish on China, owning large Chinese stocks like Alibaba, Baidu, and PDD Holdings. But after selling these stocks, he also purchased put options on these names. Put options are similar to call options but in the opposite direction, essentially betting that a stock price will decline. Burry also purchased put options on Nvidia. Now, keep in mind that the 13F filing with the Securities and Exchange Commission only shows us Scion's positions at the close of trading on March 31. We have no idea at what point during the first quarter Burry sold or at what price. However, it's quite possible that Burry saw rising trade tensions between the U.S. and China and decided to get ahead of a potential marketwide sell-off caused by tariffs. If this was the case, then Burry pulled off another "big short" trade and timed it perfectly because the market absolutely collapsed in early April after President Donald Trump's "Liberation Day," falling nearly 20% from highs made in February. Nvidia, at one point this year, traded 30% lower and was down much more from highs made during the year. Nvidia not only got hit by the trade war but also after the Trump administration placed export restrictions on certain semiconductor chips to China. Nvidia does a substantial amount of business in China, but the stock has recovered a lot since the U.S. and China announced a 90-day pause on higher tariff rates against one another. NVDA data by YCharts. Interestingly, Burry's lone remaining long position is the multinational cosmetics company Estée Lauder, which is down over 50% in the last year (as of May 16). Scion actually doubled its position in the company in the first quarter. It's not uncommon for Burry to take long positions in deep-value stocks like he did with GameStop right before the meme stock blasted into orbit in what turned into an epic retail trading frenzy. Is Burry going long-term bear? We really won't know the answer to this question until we see Scion's 13F for the current quarter sometime in July. However, it's quite possible that Burry was only short-term bearish and saw the trade war coming. Burry has done this before. In the second quarter of 2022, right after the Federal Reserve began its intense interest rate hiking campaign, Scion also sold all of its stocks except one. By the third quarter, Scion had begun accumulating stocks again. It would, of course, be quite impressive if Burry sold all of his stocks in the first quarter and then bought the dip after the market sold off intensely right before Trump announced a pause on elevated tariff rates. I wouldn't put it past the legendary investor. Burry could also be more long-term bearish, as he studies economic data closely, which indicates a potential slowdown in consumer spending and the overall economy. I think the big takeaway is that we don't quite know how Burry is positioned for the rest of the year just yet in terms of being bearish or bullish. However, it definitely looks like Burry pulled off another "big short" trade. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. 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