Renowned hedge fund strategist Michael Burry, the central figure depicted in the acclaimed movie "The Big Short," has unveiled a bearish outlook on the market, as per recently disclosed filings with securities authorities. Burry's Scion Asset Management has strategically taken short positions on both the S&P 500 and the Nasdaq 100, culminating in a substantial $1.6 billion wager that the stock market is teetering on the edge of a forthcoming collapse.
A New Era of 'Big Short'? Michael Burry Gambles $1.6 Billion Against QQQ and SPY
Michael Burry, renowned for his role in the film "The Big Short," is once again projecting a bearish sentiment on Wall Street. A recent filing with the Securities and Exchange Commission (SEC) from Scion Asset Management has divulged a substantial acquisition of put options targeting the Invesco QQQ ETF (NASDAQ: QQQ) and the SPDR S&P 500 ETF Trust (NYSEARCA: SPY). The total notional value of these options amounts to an astonishing $1.62 billion, encompassing a remarkable 93% of Scion's disclosed assets.
Within this significant maneuver, $738.8 million has been allocated against QQQ, while $886.6 million is aimed at SPY. Even though the S&P 500 and the Nasdaq 100 have exhibited robust performance throughout 2023, specific details concerning Burry's acquisitions, including purchase prices and expiration dates, remain veiled. Burry's market actions are vigilantly monitored, owing to his triumphs during the 2008 financial crisis. Nonetheless, there was an unforeseen twist when Burry transitioned from a selling stance in January 2023 to admitting his miscalculations by April.
He candidly acknowledged his misjudgment in advocating sales, and even extended felicitations to the "BTFD generation." Amidst these audacious maneuvers, Scion Asset Management's recent filing exposes long positions in prominent companies, including Stellantis, Discovery, Expedia, CVS, MGM Resorts, Iheartmedia, and Cigna. It was approximately a year ago, in August 2022, that Burry began foreseeing a prolonged economic downturn in the United States, embracing a more pessimistic perspective.
In March, Burry drew parallels between three substantial bank collapses and the historic Panic of 1907. The most recent SEC filings indicate that Scion has liquidated its holdings in Western Alliance Bancorp and Pacwest. As we progress through August 2023, both the S&P 500 and the Nasdaq 100 have experienced setbacks against the U.S. dollar, relinquishing 2% to 3% respectively over the course of this month. Furthermore, the 13F filing unveils Scion's decision to divest from Alibaba Group and JD.com.
