Michael Burry, the investor renowned for his prescient bet against the housing market before the 2008 financial crisis, has seen his recent wager on Chinese stocks yield significant returns.
What Happened: Burry’s top three Chinese holdings have surged an average of 59.39% within two months, according to regulatory filings and market data.
Burry’s hedge fund, Scion Asset Management, made substantial changes to its portfolio in the second quarter of 2024. The fund’s latest 13F report, filed with the U.S. Securities and Exchange Commission on Aug. 14, revealed a notable shift toward Chinese tech giants.
Alibaba Group Holding Ltd. BABA, Burry’s largest Chinese position with 155,000 shares, saw its stock price climb from $73.40 on the filing date to a peak of $117.52 on Monday — a 60.11% increase. The stock has since retreated to $91.94 amid a broader sell-off in Chinese equities.
Baidu Inc. BIDU, in which Scion holds 75,000 shares, experienced a 36.29% surge from $83.99 to a Monday high of $114.47. It now trades at $106.01.
JD.com Inc. JD, representing Burry’s third-largest Chinese bet with 250,000 shares, skyrocketed 81.78% from $25.90 to $47.08 before settling at $43.54.
The impressive gains in these Chinese stocks stand in stark contrast to the performance of Burry’s American holdings. Molina Healthcare Inc. MOH has dropped 4.11% over the same period, while Shift4 Payments Inc. FOUR has risen a more modest 13.26%.
Why It Matters: Burry’s pivot to Chinese equities came just before a significant rally in the sector, fueled by expectations of government stimulus. However, the rally faltered on Monday when Beijing’s announced measures fell short of market expectations.
The investor’s other notable holdings include The RealReal Inc. REAL, Olaplex Holdings Inc. OLPX, and American Coastal Insurance Corp ACIC. BioAtla Inc. BCAB, a clinical-stage biopharmaceutical company, also represents a smaller position in the portfolio.
Earlier this year, Burry made headlines for substantial investments in gold and renewable energy while exiting positions in major U.S. tech companies like Amazon.com Inc. AMZN and Alphabet Inc. GOOGL GOOG.
Investors should note that 13F reports, typically filed 45 days after each quarter’s end, only disclose holdings in U.S. equity securities and do not provide information on the timing of purchases or sales, according to the SEC. While these reports offer valuable insights into market trends and institutional strategies, they represent a snapshot of holdings at a specific point in time.
Read Next:
Michael Burry’s illustration was created using artificial intelligence.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
