| | | Here's a summary of Burry's mixed track record:
"Michael Burry, the hedge fund manager famed for his role in The Big Short, has a mixed track record when it comes to shorting markets. His most notable success and other attempts are outlined below, based on available information:
Major Successes
- 2008 Subprime Mortgage Crisis:
- Burry’s most famous and successful short was against the U.S. housing market in the mid-2000s. Starting in 2005, he predicted the collapse of the subprime mortgage market, identifying vulnerabilities in mortgage-backed securities with "teaser" rates that would reset to higher rates. He used credit default swaps to bet against these securities, convincing firms like Goldman Sachs to sell them to him.
- Outcome: His bet paid off significantly during the 2008 financial crisis, earning Scion Capital approximately $700 million for investors and $100 million personally for Burry. This success was chronicled in Michael Lewis’s book and the subsequent film The Big Short.
- GameStop (Pre-Meme Stock Era):
- Burry invested in GameStop before it became a meme stock in 2021, recognizing its undervaluation. While not a traditional short, his early investment laid groundwork for the short squeeze that later unfolded, showcasing his ability to spot mispriced assets.
Notable Short Bets with Mixed or Negative Outcomes
- 2023 S&P 500 and Nasdaq 100 Short:
- In Q2 2023, Burry’s Scion Asset Management purchased put options with a notional value of $1.6 billion against the S&P 500 ($866 million via SPDR S&P 500 ETF) and Nasdaq 100 ($739 million via Invesco QQQ Trust). This was a significant bearish bet, representing over 90% of his portfolio.
- Outcome: The S&P 500 and Nasdaq 100 fell 3.6% and 3%, respectively, in Q3 2023, suggesting a potential profit for Burry as put options gain value when underlying assets decline. However, he closed these positions by the end of Q3 2023, reportedly at a 40% loss, as the broader market did not crash as anticipated.
- Context: Burry’s bearish stance was preceded by a January 2023 tweet urging investors to “Sell,” followed by a partial retraction in March, where he mocked the “buy the dip” mentality. The market’s resilience, with the S&P 500 up 17% year-to-date in 2023, contradicted his prediction.
- 2023 Semiconductor ETF Short:
- In Q3 2023, after closing his S&P 500 and Nasdaq 100 shorts, Burry shifted to a bearish bet against the semiconductor sector, purchasing put options with a notional value of $47.4 million against the iShares Semiconductor ETF (SOXX), which includes companies like Nvidia, AMD, and Intel.
- Outcome: The SOXX ETF was up 45.37% year-to-date in 2023, suggesting this bet may not have been profitable. Burry closed this position by the end of 2023, with no clear indication of profit or loss due to limited disclosure on options specifics (e.g., strike prices, expiration dates).
- Context: This move followed weaker guidance from chipmakers like Arm Holdings and AMD, but the AI-driven tech boom supported semiconductor stocks, potentially undermining Burry’s thesis.
- 2025 Nvidia and Chinese Tech Shorts:
- In Q1 2025, Burry placed significant put options against Nvidia, Alibaba, JD.com, Baidu, and PDD Holdings, with Nvidia being his largest bearish position (valued at $97.5 million, 49% of his portfolio). This reflected a bearish outlook on AI-driven tech and Chinese stocks.
- Outcome: The performance of these bets is unclear due to limited data on strike prices and expiration dates. A sell-off in early April 2025 following U.S. tariff announcements may have provided some gains, but no definitive profit or loss has been reported.
- Other Short Bets with Mixed Results:
- 2019 Index ETF Bubble Warning: Burry warned of a bubble in index ETFs, predicting a crash. The market gained 15% over the next year, proving him wrong.
- 2020 Massive Bearish Bet: In March 2020, Burry took a significant short position, but the S&P 500 surged 72% over the next 12 months, indicating a miscalculation.
- 2021 Tesla Short: Burry shorted Tesla, predicting a speculative bubble. The market rallied 16% in the following year, and Tesla’s stock did not collapse as anticipated.
- 2022 Market Bottom Prediction: In September 2022, Burry predicted the stock market had not yet hit bottom. The market rose 21% over the next 11 months, contradicting his forecast.
- 2021 Ark Innovation ETF Short: Burry bet against Cathie Wood’s Ark Innovation ETF, which did not result in significant reported gains, as the ETF’s performance varied but did not collapse outright.
Additional Context
- Investment Style: Burry is a value investor, following principles from Benjamin Graham and David Dodd’s Security Analysis. His short bets are often based on identifying overvalued assets or sectors, using derivatives like put options for flexibility and risk management.
- Criticism: Some analysts, like Marc Chaikin, have called Burry a “one-trick pony,” arguing his 2008 success overshadows less successful predictions. Others note his bearish bets compete against a market driven by collective investor sentiment, making timing difficult.
- Portfolio Strategy: Burry’s portfolio is often concentrated, with 13–33 holdings, and he frequently adjusts positions, sometimes selling entire stakes or shifting to new sectors. His 2023 and 2025 moves show a pattern of exiting broad market shorts to focus on specific sectors (e.g., semiconductors, Chinese tech).
- Accuracy and Timing: While Burry’s 2008 call was prescient, his subsequent bearish predictions have often been premature or incorrect, as markets have shown resilience. However, his ability to identify undervalued assets (e.g., GameStop, regional banks in 2023) demonstrates versatility beyond shorting.
Summary
Michael Burry’s track record for shorting markets is anchored by his extraordinary success during the 2008 housing crisis, which remains a benchmark for contrarian investing. However, his subsequent short bets—particularly against broad market indices (S&P 500, Nasdaq 100), semiconductors, and specific stocks like Tesla—have yielded mixed results, with notable losses in 2023 (40% on S&P 500/Nasdaq shorts) and unclear outcomes in 2025. His predictions often attract attention due to his reputation, but critics highlight that his bearish calls since 2008 have frequently been mistimed or overly pessimistic. While Burry’s analytical prowess is undeniable, shorting markets remains a high-risk strategy, and his record reflects both significant wins and losses." |
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