Legendary Investor Michael Burry is most famous for the “Big Short” where he bet against the bubble like housing market in 2008. This paid off massively for his investors ,when the fundamentals of the housing market corrected & the Financial Crisis of 2008 occurred.
Which Stocks is Michael Burry Shorting? Full Video Below
What is Short Selling?
In short selling, a trader/investor will borrow shares of a stock that the investor believes will decrease in price.
The investor then sells these borrowed shares to buyers willing to pay the market price. Before the borrowed shares are returned, the trader is betting that the price will continue to decline and they can purchase them at a lower cost.
Warning: The risk of loss on a short sale position is theoretically unlimited since the price of any asset can climb to infinity, although usually the broker will do what is called a Margin Call, before this happens.
A True Contrarian Investor?
Burry is a contrarian investor meaning he is not afraid to bet against what is popular despite external pressure.
Burry’s Tesla Short?
Michael Burry has revealed a Major $530 Million bet against Tesla Stock!
Burry has purchased Long Puts against 800,100 shares of Tesla which are worth approximately $534 million!
This was reported in a recent filing with the US Securities & Exchanges Commission via his private wealth fund, Scion Asset Management.
Cathie Wood Vs Michael Burry?
Ark Invest is an investment firm which specialises in disruptive innovation.
Ark’s founder & CEO is Cathie Wood, the Charismatic leader who is not afraid to make BOLD BETS.
She gave Tesla stock a brave price target of over $5000 in early 2020 & made it the Largest position (10%) of all of Ark Invests ETF’s (exchange traded funds)
This paid off Massively for Ark Invest after Tesla’s Meteoric rise in 2020 by over 700%!
We can also see from the below image that Ark Invest & Cathie Wood still hold around $4 billion in Tesla Stock despite trimming of the positions in February 2021.
This Resulted in the Flagship ARKK (Ark Innovation ETF) returning over 152%!
However, Michael Burry now believes Ark Invests funds are overvalued & his has made a big bet against them,
According to a 13F regulatory filing at the end of Q2 2021,
Michael Burry’s Scion Asset Management owned put contracts against 235,000 shares of the Ark Innovation ETF (ARKK) at the end of Q2,
Cathie Wood responds to Burry?
On Twitter Cathie Wood stated:
“To his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market.
“I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”
Talking about the general strategy of investing in innovation:
“In our view, the seeds for the innovation that ARK Invest is dedicated to researching were planted during the 20 years ending with the tech and telecom bust.
“Having gestated for more than 20 years, these technologies should transform the world during the next 10 years.”
Burry vs Meme Stocks?
After previously making a killing on Gamestop as an early investor.
- Gamestop Increase share price. Source: Cheaper than Guru (Michael Burry Portfolio.) Gamestop
Has Michael Burry Shorted AMC?
Burry then sold his position & now many speculate he may be short stocks such as AMC but I cannot confirm this yet, Join our Email list to stay updated.
He recently warned retail investors about unsustainable valuations and the potential for “the mother of all crashes” in cryptocurrency and the popular meme stocks.
How Much did Michael Burry Make on Gamestop Stock?
Full Video & Post Below
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