Michael Burry's 13F Filing Analysis

Jun 5, 2024

Lecture on Michael Burry's 13F Filing

Overview

  • Michael Burry, renowned investor, has released his latest 13F filing.
  • Key themes identified in his portfolio strategies for this quarter.

Key Changes in the Portfolio

  • Sold out of 14 stocks: Google, Amazon, Oracle, etc.
  • Added to 11 positions.
  • Purchased 5 new stocks:
    • One of the prominent buys: Sprott Physical Gold Trust.

Investment in Sprott Physical Gold Trust

  • Bought 440,000+ shares, representing 7.37% of his U.S. portfolio.
  • Sprott is a closed-end fund that holds assets in physical gold bullion.
  • Value Investment Perspective:
    • Odd timing since gold and Sprott’s gold fund were at all-time highs during Q1 2023.

Rationale Behind Gold Investment

  • Economic Uncertainty: Gold is seen as a safe haven asset.
  • Historical Context:
    • Price spikes during the Great Depression, 1970s, post-2008 crisis, and COVID-19.
    • Gold provides a hedge against market downturns.
  • Inflation Hedge:
    • Anticipation of inflation and currency debasement.
    • Despite cooling inflation and decreased money supply, Barry’s move suggests he expects future inflation.

Continued Investment in Chinese Tech Giants

  • Increased investments in Alibaba and JD.com:
    • Added 80% to JD.com and 66% to Alibaba in Q1 2023.
    • Maintaining top positions for three straight quarters.
  • New investment in Baidu (smaller position).

Rationale Behind Chinese Tech Investment

  • Importance to China’s Economy:
    • Market leaders with competitive positions and massive user bases.
    • Suffering from China's sluggish economy, property sector issues, and conservative consumer spending.
  • Economic Proactivity:
    • Long-term repositioning in companies with crunched share prices.
    • Expecting economic recovery and increased consumer spending.
    • Early signs of retail sales recovery and increasing consumer activity in China.

Possible Third Theme: Cash Pile

  • Portfolio value fluctuations: $103M at present, often drastically changes.
  • Total Assets Managed: $238M (as of January 17).
    • Potential cash position of ~56%.
  • Indicative of caution and waiting for significant opportunities.
  • Importance of understanding the limitations of 13F filings:
    • Only shows U.S. investment.
    • Doesn't account for potential International investments.

Conclusion

  • Key takeaways: Investments in gold and Chinese tech giants.
  • Importance of viewing the bigger picture beyond 13F filings.
  • Strategic caution evident from high cash positions.
  • Note: Always useful to scrutinize broader contexts when interpreting filings.