Michael Burry is a savvy investor.
He is one of the legends of Wall Street, which makes him one of the financiers who are followed by millions of investors for every word.
Investors follow his strategies and the trading options he makes. When he buys shares of a company, the share price usually goes up. This is the case again with Geo Group stock (GEOGRAPHY) – Get a free report.
He has purchased, through his company Scion Asset Management, 501,360 shares worth $3.31 million, of the company’s investments in private prisons and mental health sites, since June 30, according to legal filings.
Since he disclosed his stake in Geo on August 15, the corporation’s shares have risen 34.2%. Since January, shares of Geo Group have risen 19%.
On November 14, he revealed the number of new shares owning a home shopping channel (QRTEA) – Get a free report. The next day, shares closed up 17%, the highest since November 2020.
Big Bet
This investor became famous as a stock investor thanks to his successful bet on the collapse of the US housing market in 2007. He later became a household name after the movie “The Big” Short” in 2015, describing his bet on subprime mortgages. The crisis sparked the 2008 financial crisis.
What most people tend to forget is that, on the other hand, the mortgage-backed debt obligation (CDO) bet made by Burry was reputable. investment bank Goldman Sachs. CDOs are loans, mortgages, and other assets that investment banks package and offer to institutional investors.
In Michael Lewis’ book “The Big Short: Inside the Doomsday Machine”, it is said that Burry decided to bet on the subprime boom after he noticed that a lot of people really weren’t. can afford to pay their mortgages. But lenders are looking for new financial tools to justify handing over more money to them.
“It’s a clear sign that lenders have lost it, constantly lowering their own standards to increase lending volume,” says Burry.
Lenders sold these loans to Goldman Sachs, Morgan Stanley, Wells Fargo and other “too big to fail” banks, who packaged them up into bonds and sold them. These practices have almost brought the financial system to its knees. They caused the worst financial crisis since 1929.
A few months ago, Burry sounded the alarm again about the state of the economy. He believes it will definitely fall in Depression. He said he foresees a household debt crisis that would seriously jeopardize the economy.
“Remember the problem of excess savings? Not anymore. The COVID helicopter money has taught people to spend again and it’s addictive. Winter is coming,” Burry warned last August.
“Winter is coming” seems to refer to HBO’s “Game of Thrones” series. The characters used this phrase as a warning.
A mysterious bet
“13.48% stocks close over 200 days moving average yesterday,” Burry, operator hedge fund Scion Asset Management, said on Twitter on Oct. 1. “The 2009 low was 1.2%. The 2020 low is 2.8%. Currently at 2007 level.”
He then confirmed this dire prediction by liquidating nearly his entire US stock portfolio in the second quarter.
But you resume bought shares in the third quarter, according to regulatory filings. As of September 30, Scion’s U.S.-listed companies portfolio consisted of six companies.
I bet on Aerojet RocketDyne (AJRD) – Get a free reportCommunications Regulations (CHAPTER) – Get a free reportCorecivic (CXW) – Get a free reportGeo Group, Liberty Latin America (LILAB) – Get a free report and Qurate Retail. In total, his equity portfolio totaled $41.3 million, up $38 million from three months earlier.
Days after revealing these new bets, Burry just sent a cryptic message suggesting that he too had bet big on the collapse of a company’s stock or the collapse of an industry, or even an asset class.
“You don’t know how short I am,” Burry posted on Twitter on Nov. 15. The tweet was later deleted as usual with all of his posts.
Burry did not disclose his location. He let social media users speculate. They embarked on a guessing game that mainly involved the names of tech groups. Burry liquidated shares of Alphabet and Meta Platforms he held in the second quarter.
What is certain is that Burry is causing a stir again as many are wondering if he is really talking about a bet or if he is talking about his height. The financier is said to be 5′ 6 inches tall.
Short selling a stock is a bet that the stock price will fall.
