Michael Burry Makes Major Portfolio Shift, Holding Only One Asset He Deems 'Recession-Proof'

Renowned hedge fund manager Michael Burry has made a substantial alteration to his portfolio, maintaining only one bullish position.

What Happened: The recent SEC filings indicate that Burry’s Scion Asset Management has adopted a predominantly bearish outlook. The firm has established a significant position in put options against Nvidia (NASDAQ:NVDA), suggesting a pessimistic view on the chipmaker’s stock.

The filings also reveal that Scion has switched its previously bullish stance on Chinese equities, purchasing bearish put options on major Chinese firms, including Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU).

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Notably, Scion’s sole remaining long position is in Estee Lauder (NYSE:EL), a cosmetics giant based in New York. This single bullish position underscores Burry’s prudent market strategy, as the cosmetics sector is frequently deemed recession-proof.

This is the second time in recent years that Burry has made significant changes to Scion’s portfolio. In 2023, he significantly cut the firm’s holdings, only to later admit his error and make new, focused investments.

Why It Matters: Michael Burry’s portfolio adjustments are closely watched by investors due to his reputation for predicting the 2007 housing market crash. His latest move to a largely bearish stance, particularly against Nvidia and major Chinese companies, could signal his anticipation of a downturn in these sectors.

Furthermore, his sole bullish position in Estee Lauder suggests that he views the cosmetics industry as a safe haven amidst potential market volatility.

This shift in strategy may influence other investors to reassess their own portfolios and market outlooks.

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