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‘The Big Short’ Investor Michael Burry Reveals New Stock Buys

Famous investor Michael Burry just reported his first quarter 2023 stock holdings and he bought many stocks during the quarter, and sold out of a few. In this The Art of Value episode we take a look at the three main sectors he’s being buying.

Video summary

In the first quarter of 2023, renowned investor and founder of Scion Asset Management, Michael Burry, has been quite active in reshaping his portfolio. Notably, he has shown a strong interest in three key sectors: Chinese tech, distressed banks, and traditional energy.

Firstly, Burry seems to be bullish on the Chinese tech sector, as indicated by his increased holdings in JD.com and Alibaba. He has previously expressed his optimism about China on Twitter, and these investments seem to reflect that sentiment. Notably, these two companies alone represent roughly 20% of his U.S. portfolio, indicating a strong conviction in their potential. Both JD.com and Alibaba are major players in the online retail market, and Charlie Munger has also expressed a similar belief in the undervaluation of Chinese stocks compared to their U.S. counterparts.

Secondly, Burry has been investing in distressed banks. This strategy suggests Burry is trying to capitalize on fear and panic in the banking sector, possibly seeing the potential for a considerable upside if these banks recover. Given his successful shorting of the housing market during the Global Financial Crisis, this sector falls within his circle of competence.

Lastly, Burry has been investing in the traditional energy sector. This interest aligns with his deep-value investment approach, focusing on sectors or companies perceived to be currently undervalued.

However, despite these notable investments, it’s worth considering that Burry’s U.S. stock holdings, reportedly just over $100 million, may not reflect his entire portfolio. Furthermore, Burry has been known to sell stocks relatively quickly if they reach what he perceives as their intrinsic or fair value, in line with his deep-value investment philosophy.

In the past quarter, Burry has also divested from several companies. Overall, Burry’s Q1 activity reflects his status as a deep-value investor, with a willingness to pivot based on changing economic conditions. It is always essential, however, to undertake your own research and not solely rely on the actions of prominent investors such a Burry.

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