Investing is not everyone’s cup of tea, and there have been far less successful stories. Naturally, when it comes to investing, you can’t help but draw inspiration from Michael Burry. Just a young boy, trying out his hand in investing while in medical school, Michael Burry caught the spotlight, where his name even reached highly regarded companies like Vanguard.
Michael Burry then went on to short the housing market, where he made roughly a $100 million. He was also one of the main characters in an Oscar-winning movie – The Big Short. Now, if you have seen the movie, you must have wondered what it would take to invest like ‘the’ Michael Burry. While it may not be as easy as it seems, let us take a look at his portfolio and his unique approach to investing.
Where is Michael Burry Investing?
Here are 5 stocks you need to look out for –
5. Alibaba Group Holding Limited (NYSE:BABA)
Scion Capital’s Q3 2023 Investment: $4.3 million
Alibaba Group Holding Limited (NYSE:BABA) is a big online seller and tech company worldwide. It’s rated Strong Buy and analysts think its share price could go up by $57, aiming for an average share price target of $140.
In June 2023, out of 910 hedge funds, 112 owned shares of Alibaba Group Holding Limited (NYSE:BABA). The largest of these was David Tepper’s Appaloosa Management LP, with a significant investment worth $372 million.
4. Booking Holdings Inc. (NASDAQ:BKNG)
Scion Capital’s Q3 2023 Investment: $4.6 million
Booking Holdings Inc. (NASDAQ:BKNG) is a company that provides travel services. It’s interesting to note that Michael Burry had a $4.6 million investment in the company as of September 2023, but he also had put options worth $7.7 million. This suggests that Burry might be anticipating a drop in the stock price and has taken steps to protect his investments. Alongside Alibaba and JD, Booking Holdings Inc. was a new addition to Scion’s investment portfolio in Q3.
In Q2 2023, 78 out of 910 hedge funds had invested in Booking Holdings Inc. (NASDAQ:BKNG). The largest shareholder at that time was Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell. They owned 511,104 shares valued at $1.3 billion.
3. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Scion Capital’s Q3 2023 Investment: $4.8 million
Star Bulk Carriers Corp. (NASDAQ:SBLK) is a Greek company that ships dry bulk cargo. Its success is tied to a strong global economy, and analysts think its shares are a Strong Buy on average, with an average price target of $23.97.
In the June quarter of 2023, portfolios of 910 hedge funds were analyzed, revealing that 15 had purchased shares of Star Bulk Carriers Corp. (NASDAQ:SBLK). Howard Marks’ Oaktree Capital Management emerged as the largest investor among them, with shares valued at $461 million.
2. Nexstar Media Group, Inc. (NASDAQ:NXST)
Scion Capital’s Q3 2023 Investment: $6.9 million
Nexstar Media Group, Inc. (NASDAQ:NXST) is an American company that focuses on television and broadcasting. Dr. Burry had a significant increase in his investment in the company during the third quarter, boosting his holdings by 225%, which was one of the largest jumps seen. Additionally, analysts rate the company’s shares as a Strong Buy, with an expected average price increase of around $55.
As of the end of the June quarter in 2023, 30 out of 910 hedge funds were investors in Nexstar Media Group, Inc. The largest hedge fund shareholder at that time was Amy Minella’s Cardinal Capital, with holdings valued at $129 million.
1. Stellantis N.V. (NYSE:STLA)
Scion Capital’s Q3 2023 Investment: $7.6 million
Stellantis N.V. (NYSE:STLA) is among the largest car makers globally. Currently, the company is addressing the aftermath of significant union strikes in the United States. To manage this, it’s offering buyout options to workers, aiming to create financial room for producing electric vehicles while also honoring union agreements.
In the second quarter of 2023, 27 out of 910 hedge funds had investments in Stellantis N.V. (NYSE:STLA). The largest stake among these was held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell, valued at $420 million.
The Investment Approach of Michael Burry
Michael Burry, a value investor, follows the principles outlined in the book Security Analysis by Benjamin Graham and David Dodd. He focuses on a key idea called the “margin of safety.” This means he looks for companies whose stock price is lower than what they’re actually worth. Burry believes that investing in such companies is safe because their stock prices are likely to increase over time to match their true value.
Many investors use a value investing strategy, but Burry has some unique methods that set him apart and contribute to his success. Here’s what makes his approach different:
- He searches for value everywhere, saying, “If I see value in it, it’s a potential portfolio candidate.”
- His most famous investment wasn’t a stock, but credit default swaps that he used to bet against the housing market.
- He makes decisions based on his own analysis, not influenced by others or market emotions.
- Burry is willing to take a different stance from the crowd and relies on his own research.
- He often invests in unpopular sectors, believing it’s a chance to buy strong companies during times of irrational selling.
Burry is known for being selective in his investments. At the close of 2022, Scion Asset Management held only nine stocks, reflecting Burry’s preference for quality over quantity. He opts for stocks that offer good value and a margin of safety, rather than spreading his investments across numerous companies. This approach contrasts with the strategy of investing in many companies with the hope that a few will yield significant returns, as Burry aims to make each investment count.
Michael Burry’s Top 50 Investments
