Michael Burry, the investor known for predicting the subprime mortgage crisis, made a significant investment in physical gold during the first quarter of the year, according to a regulatory filing. Burry, who manages hedge fund Scion Asset Management, purchased over 440,000 units of the Sprott Physical Gold Trust (PHYS), totaling more than $10 million. This closed-end fund holds its assets in physical gold bullion and is currently trading at a discount to its net asset value. Gold prices have been on the rise due to increasing inflation and geopolitical risks, with U.S. gold futures reaching over $2,400 at their peak last month.
In addition to his investment in gold, Burry also increased his positions in Chinese e-commerce giants JD.com and Alibaba during the last quarter. Some of his other top holdings at the end of March included HCA Healthcare, Citigroup, and Block. Burry gained fame for his bets against mortgage-backed securities before the 2008 global financial crisis, which was depicted in Michael Lewis’ book “The Big Short” and the subsequent Academy Award-winning movie of the same name. Money managers with over $100 million in assets are required to disclose their long positions to the Securities and Exchange Commission 45 days after the end of each quarter, although active traders like Burry may have already altered their positions by the time filings are released.
The Sprott Physical Gold Trust (PHYS), in which Burry made his largest investment in the first quarter, is currently trading at a discount to its net asset value. The trust sells at a 1.67% discount compared to its 52-week average discount of 1.57%. The widest discount over the past year was 2.52%, and the trust has not traded at a premium to NAV in the past year. With gold prices hitting new highs due to inflation concerns and geopolitical tensions, Burry’s move to invest in physical gold reflects his outlook on the market and his strategy to hedge against potential risks.
Burry’s decision to increase his bets on Chinese e-commerce companies like JD.com and Alibaba shows his confidence in the growth potential of these firms. Along with his holdings in healthcare, financial services, and technology, Burry’s portfolio reflects a diversified approach to investing across different sectors. His past success in predicting market trends and making profitable bets has solidified his reputation as an astute investor with a unique perspective. While regulatory filings provide a snapshot of his holdings at a specific point in time, it’s important to note that active traders like Burry may have already adjusted their positions based on changing market conditions.
As an influential figure in the investment community, Burry’s moves in the market can attract attention and influence other investors’ decisions. His track record of predicting major market events, such as the subprime mortgage crisis, has earned him a following of investors who closely monitor his actions. By making significant investments in physical gold and increasing his positions in certain companies, Burry is signaling his outlook on the market and positioning his portfolio to capture potential opportunities. While regulatory filings offer transparency into his holdings, it’s essential for investors to conduct their own research and analysis before making investment decisions based on another investor’s moves.
