Michael Burry Stock Picks – His Top 7 Companies
Dr. Michael Burry is best known as the man who predicted the 2008 financial crisis. He is one of the main characters in Michael Lewis’s The Big Short, and was one of the loudest voices arguing that the market was overvalued in 2021. As the manager of Scion Asset Management, Burry sold off most of his stock positions at the end of last year.
In this article, we’ll take a closer look at Michael Burry’s best and current stock picks so you can learn how he invests for success.
Who is Michael Burry?
Dr. Michael Burry is the manager of Scion Asset Management. However, he’s better known as the fund manager who predicted the 2008 financial crisis before it happened. His fund, called Scion Capital at the time, generated returns of 489% from 2000 to 2008. Burry’s bet against the market was chronicled in Michael Lewis’s book The Big Short, which was subsequently turned into a movie.
In 2008, Burry closed Scion Capital but remained active in the market as a personal investor. He reopened the fund, renamed Scion Asset Management, in 2013. Burry has an estimated net worth of $300 million.
Michael Burry Investment Style
At the helm of Scion Asset Management, Burry’s style has been to invest big in companies that he believes are undervalued, while also shorting companies that he thinks are overvalued. He called himself a value investor, but one who isn’t afraid to take a contrarian stance. Throughout 2021, Burry argued that the stock market was overvalued and that a crash was looming, even as the market overall enjoyed a bull year.
Notably, Burry is a critic of passive index investing. He believes index investing inflates the value of large companies while devaluing smaller companies, creating a bubble in large-cap stocks.
Michael Burry Stock Picks
Michael Burry’s fund, Scion Asset Management, has released 13F statements revealing its holdings since February 2019 after the value of the fund surpassed $100 million. So, we can explore some of Burry’s biggest stock picks over the past three years.
Date of initial pick: 2018
Michael Burry set the stage for the GameStop short squeeze. He wrote to the GameStop board multiple times between 2018 and 2020, arguing that the stock was deeply undervalued and that the board should buy back shares using cash the company had on hand. Burry bought $14 million worth of GameStop stock in April 2020 and sold it near the peak of the short squeeze.
Date of initial pick: December 2020
Burry bought more than 800,000 put options on Tesla, saying on Twitter that he believed the company’s stock could fall by more than 90%. Burry traded barbs with Elon Musk repeatedly on Twitter before ultimately exiting his short position in September 2021. How much Burry lost on the trade is not known, but the share price of Tesla gained approximately 17% during the time period of the short position.
Date of initial pick: April 2021
Burry held a short position against Alphabet, the parent company of Google, through most of 2021. However, Alphabet gained an impressive 67% in 2021, and Burry closed out his position in September. In the first quarter of 2022, Burry opened a long position in Alphabet. As of May 2022, Scion Asset Management holds 6,500 Alphabet shares worth $18 million.
Date of initial pick: May 2022
In its May 2022 13F filing, Scion Asset Management revealed a $35 million bearish bet on Apple. While Burry hasn’t revealed any details about why he is shorting Apple, he has argued in the past that index investing overvalues mega-cap companies. Apple shares are down 24% so far in 2022.
Performance: New pick
Date of initial pick: March 2020
Burry invested in Facebook (now Meta Platforms) in the spring of 2020, although it’s unclear whether this investment was made before or after COVID-19 lockdowns began in the US. From an initial position of 93,000 shares, he ultimately amassed more than 940,000 shares of Facebook worth $327 million. Burry sold off his stake in Facebook in the summer of 2021.
Date of initial pick: March 2020
Scion Assets Management bought 350,000 shares of Discovery in the spring of 2020 at a cost of $6.8 million. This is one of only a few stocks that Burry held onto through the end of 2021. As of May 2022, he holds 750,000 shares worth $8.7 million. (Discovery is now part of Warner Brothers Discovery.)
Performance: 23% (to date)
Date of initial pick: March 2021
Michael Burry initially invested in CVS Health in the spring of 2021, just as COVID-19 vaccines were rolling out across the US with the help of this pharmacy. He bought 400,000 shares worth $30 million and sold them off by the end of 2021.
Michael Burry Lifetime Performance
Michael Burry’s lifetime performance is difficult to gauge because his fund has only intermittently filed 13F statements and does not publicly disclose its returns. When Burry was managing Scion Capital from 2000 to 2008, his fund generated a 489% return.
More recently, it appears that Burry took advantage of the COVID-19 market crash in the spring of 2020 to buy stocks like GameStop, Facebook, and Discovery at value prices. He also sold off most of his fund’s holdings in late 2021, prior to the steep market decline in the first months of 2022. His short bet against Tesla was closed for a loss, although it’s unclear how large a loss Burry took on that position.
Conclusion: Michael Burry Stock Picks
Michael Burry is a value investor with a talent for identifying upcoming market crashes. He was one of only a few people to see the 2008 financial crisis coming, and appears to have correctly predicted that the stock market was overvalued in late 2021. While gauging Burry’s overall performance is difficult, he has made a number of large, profitable trades in the past several years.