In one of his more shocking moves, Michael Burry of ‘The Big Short’ has decided to sell all of his gold and direct his investments elsewhere – including consumerism, office space for technology companies, the strength of the United States dollar, Chinese stocks, and the U.S. job market.
As it happens, Burry has exited his Sprott Physical Gold Trust (PHYS) position, despite PHYS having “had a healthy 23% gain” over the past six months and gold’s traditional role as a hedge against inflation, according to the observations by Michael Burry Stock Tracker in an X thread on August 16.
Michael Burry’s gold sales. Source: Michael Burry Stock Tracker
Michael Burry is bullish on U.S. economy
On the other hand, entirely ditching his gold possibly indicates Burry’s new confidence in the dollar and the U.S. economy, as inflation recorded a 2.9% increase in July – its lowest growth since March 2021- and potentially a green light for the Federal Reserve to cut interest rates in September.
Consumer Price Index (CPI) results for July. Source: Michael Burry Stock Tracker
Furthermore, the hedge fund manager’s has added massive positions in Shift4 Payments (NYSE: FOUR) stock, which now comprises nearly 14% of his portfolio, “is likely a play to capture [the] upside in” consumer spending that has accelerated 1% on the month, above the predicted 0.3%.
Burry’s optimism on job data
On top of that, Burry has also bought a stake in Hudson Pacific Properties (NYSE: HPP), a stock that has declined 49% this year but makes sense from his standpoint of buying shares of “unpopular companies when they look like road kill and” selling them “when they’ve been polished up a bit.”
Besides, as the platform stressed, Hudson is a real estate investment trust (REIT) that “focuses on West Coast tech offices,” including Netflix (NASDAQ: NFLX), Alphabet (NASDAQ: GOOGL), Square/Block (NYSE: SQ), Uber Technologies (NYSE: UBER), and other major companies.
According to Michael Burry Stock Tracker, this “likely has a lot to do with the US job numbers that just came out,” which suggest that “initial claims for state unemployment benefits fell 17k to a seasonally adj. 233k for the week ended Aug.3,” and represent “the largest drop in about 11 months.”
US unemployment claims data. Source: Michael Burry Stock Tracker
Burry’s bullish on China stocks
Likewise, Burry’s bullishness on China is clear from his purchases of 30,000 shares of the e-commerce and tech giant Alibaba (NYSE: BABA) and 35,000 shares of the artificial intelligence (AI) focused firm Baidu (NASDAQ: BIDU), with Chinese stocks making up 45% of his portfolio, as Finbold reported on August 15.
Indeed, the Chinese government announced back in May this year that it was planning to issue $1 trillion yuan in T-bonds and relieve mortgage regulations to boost the housing market in the country, which might “spark consumerism in a big way,” explaining Burry’s optimistic outlook on the above stocks.
Currently, the price of Alibaba shares stands at $79.54, suggesting a 0.14% gain on the day, having declined 0.48% on its weekly chart, as well as accumulating an advance of 1.48% in the past month, according to the latest data retrieved by Finbold on August 16.
Alibaba stock price 1-month chart. Source: Google Finance
Michael Burry and low-income healthcare
Finally, Burry’s second-largest position belongs to Molina Healthcare (NYSE: MOH), the company that offers managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs in the U.S.
According to the platform tracking the popular investor’s trades, this “could potentially be an election play as candidates have very opposing views on these services,” referring to the Democrat candidate Kamala Harris and Republican presidential hopeful Donald Trump.
In terms of price, MOH stock was at press time trading at $345.94, reflecting a 1.98% increase in the last 24 hours, adding up to the 3.09% gain across the past week and a 12.56% advance over the last 30 days, according to the most recent charts.
Molina Healthcare stock price chart. Source: Google Finance
Overall, Burry has made some surprising shifts in his portfolio lately, both in terms of offloading and onboarding specific assets. That said, he is a seasoned trader well aware of all the risks involved in investing, so doing one’s own research and understanding these risks is critical.
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