Burry Is Preparing For A Market Crash. Here's His Most Recent Investments

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Let’s go over the stocks that Michael Burry (from the big-short) is buying and selling. I wan’t to show you how he’s organised his portfolio in a very unique way for today’s market conditions…

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Anyone who has watched the movie the big short will know that Michael Burry is the king at making money in a stock market crash. The 2008 financial crisis, well, let’s just say he made a lot of money. Now, I don’t know if you guys have been paying close attention to what Burry’s been doing or saying, but it has got us investors slightly concerned. Let me update you…

Burry said index fund inflows are now distorting prices for stocks and bonds in much the same way that CDO purchases did for subprime mortgages more than a decade ago. The flows will reverse at some point, he said, and “it will be ugly” when they do. “Like most bubbles, the longer it goes on, the worse the crash will be,”…

So as you would expect, after reading Burry’s comments on the market, that got me interested. What is burry himself actually doing when it comes to his own investments. What I found was fascinating. I want to show you this…

So this recent quarter in 2020, Burry made 34 different stock moves. Now some of these moves were minor, we’re going to look at his 8 biggest stock buys and his 8 biggest stock sells. Basically all the important ones…
His largest stock sale was Jack in the box, ticker symbol Jack. That’s obviously the American fast food restaurant and Burry got completely rid of that position. he sold all, 300,000 shares, worth 12.24% of his portfolio.

His next largest stock sale, let’s just say Mark Zuckerberg would not be too happy with. He got rid of all of his Facebook shares, which used to make up 11.65% of the portfolio.

The 3 positions that Burry reduced and did not completely sell out of were… 1 Gamestop where he sold 8.44% of his portfolio worth, 2 Qorvo 9.11%, and Maxar technologies, 9.48%…

The last companies that he sold completely out of were, Boeing, no real surprise there, Tailored brands a company which Jeremy from Financial Education used to love, and Michaels company the provider of art and décor items…

So there you have it, he sold almost 75% of his portfolio and he’s completely allocated it, into other investments. It’s a move that a lot of stockholders would be afraid to make, but Burrys never gonna back down on what he thinks is right…

A lot of those companies sold were American retail or food companies, the likes of Michaels, Tailored Brands, Gamestop and Jack in the box. But also he wasn’t afraid to get rid of technology type companies like Qorvo and Facebook…

But that does lead us on to a very obvious question that you should ask me… If he sold so much of his portfolio, what did he replace it with?… and what I’m about to show you I think you’re going to find very interesting…!

Out of his top 10 biggest stock buys, 7 of those, were call options. Now I don’t know if you guys understand what a call option is, I’d say probably 50% of you do, but for those who don’t know let me explain…

A call option gives the buyer the opportunity, but not the obligation, to buy a certain stock at a fixed price. And of course you have to pay a certain one off fee, to be a holder of a stocks call option.
If a call option goes up you profit, and if it goes down, well, you just lose the small fee you pay.

So Michael burry his biggest buy so far, was a call option in the stock Alphabet, or google as it’s more well known. This means Burry paid a one off fee to be an owner in the call option, and now he can buy google at the original price, he agreed upon. If Google goes up like it has done a lot over the past couple of months, Burry makes a tonne of money. If Google falls and there’s a massive market crash, well Burry just loses the small fee that he paid and doesn’t have to buy the stock.

Basically what these call option buys do, is it allows you to profit if the stock market continues it’s run up, and it minimizes the downside to a massive extent…

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DISCLAIMER: It’s important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.

Comments

Greg Wessels says:

Actually it is not index funds that are the problem, its the rapid increase of options contracts. Just like back in 2008!

Mark Parkins says:

Good video. Is it really possible to make consistent profits from trading and how do you do it?

Business Mindset says:

yes i also hear about it, and i know this Because i recently Upload a VIDEO about this. 👍💎💎💎

Ava Gia says:

If he was preparing for a market crash he’d be buying puts and not calls lol

DM Herman says:

And remember the BIGGEST GAINS are made if you can get into a private
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Bell Huels says:

I don't owe anyone anything now because of, p a i d t o b e h o m e .c o m

Howard White says:

The Rich invest their money first into assets instead of purchasing liabilities. Take a wise decision today to buy and invest in cryptocurrency as the market might crash.

Gabriel Rusu says:

Hello Tristan! I would like to ask you some information about your online courses and some questions about the stock market, can i find you on social media? Or can i have your email so i can write you, please?
Thank you in advance, GR.

DobMH says:

Can you show us your portfolio?

shyam sunder badakala says:

He is talking about the call option but he is not showing the expiry date and call strike price that he brought.

Andrew Sharp says:

He has 30+% of his entire portfolio in Google calls, that is the exact opposite of preparing for a market crash. What is this clickbait?

Stephen Wright says:

Come on man, call options are (by definition) not investments. Basics please.

Mellisa Nabi says:

I just got into bitcoin trading and I made my first profiy,which I knew about this earlier

Cody Stephenson says:

No kidding I look at when he makes his plays and they're brilliant dude is playing exact moving average bounces…. He is the investor everyone wishes they were… Wish he was one of my close friends

Sakhawat khan says:

I quit my 9-5 with the help of, p a i d t o b e h o m e .c o m

Dude Smith says:

Why not ETF that run counter to the markets?

Moise Levi says:

His calls are hedging his shorts

john r says:

Great vid.. But i wonder is he shorting the once he has on call?

Michael Paul says:

The Rich stay by spending like the poor and investing Non stop,while the poor stay by spending like the rich and yet not making any investment.

Haitao Yu says:

Burry has his reasons behind for the call, however, probably not to prepare for crush…. this video makes burry looks like stupid …

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