Michael Burry's Controversial Bet for 2024.

well Michael Barry is back he has just released his latest 13f filing and in it it shows that he has been on quite the buying spree in Q4 of 2023 he opened 18 new positions added to two reduced in five and sold four so in this video we're going to go through exactly what Michael bar has bought and sold and whether we can take anything away from his latest 13f also very quickly if you don't know what a 13f filing is it is an SEC filing that all fund managers with over 100 million in assets under management have to file every quarter and what it does is it shows everything in their stock portfolios so by looking from quarter to quarter you can then get a sense of what they've added to reduce any new buys they've made and also what they've sold out of the only catch we do have to wait 45 days after the end of the quarter for the 13A filings to be released this one always always always comes up in the comments no I promise I'm not late we all just have to wait for this information unfortunately but the wait is now over and Bar's 13f shows that he has been very active indeed so starting with what he bought and sold and we'll talk about what he bought first as I said 18 new stocks this quarter but what I'm most interested in are his two biggest Holdings at the moment in the number two spot we have jd.com at 6.11% of the portfolio and then just trumping that at 6.15% of the portfolio we have Alibaba he added 60% to his JD positioning Q4 and 50% to his Alibaba Stak so he is certainly not afraid to hold the Chinese Tech Giants for those that don't know JD and Alibaba are both massive e-commerce sites over in China kind of like what Amazon is in the US but they've both been suffering quite a bit over the past few years as you can see Alibaba stock peaked at around $310 per share back in 2020 and has been on the decline ever since and JD is much the same story with their Peak at around $110 in February of 2021 in fact from their peaks both Alibaba and JD shares have lost lost approximately 34 of their value so it's not a little decline they have both suffered heavily and this is predominately due to the macroeconomic factors over in China so unlike most of the rest of the world China has not implemented huge stimulus postco and what this has led to is a very sluggish economy that's currently struggling with a consumer spending crisis which in turn is causing deflation Chinese citizens are struggling the property sector is suffering so house prices are down and the value of people's Investments has fallen and what the data is showing is that the people are still spending on services but they are not buying goods if they can help it and that's particularly problematic for companies like jd.com and Alibaba because selling Goods is their entire business so it's a very interesting situation where despite JD and Alibaba being good companies themselves just because the macroeconomic factors are really crummy right now they're suffering a lot and this has actually led a few long-term minded superin investors to buy into these beaten down Chinese tech stocks remember it started with Charlie Munga when he bought Alibaba then it was Guy spear monish P bought alib barara and then he switched to 10cent Howard Marx owns JD and now of course Michael bur has stepped in and bought both and this is a really interesting play for Michael Barry because of course we all know he loves to bounce in and out of stocks and look for short-term opportunities but I think if you're going to own Chinese companies you really have to look longterm because a lot of these stocks potential recoveries are going to revolve around the macroeconomic environment of China improving and call me crazy but I do actually think these two Investments reveal Michael Bar's Long View on China yes we could very well see these stocks disappear from his portfolio next quarter he might have already sold these stocks for all that I know but have a look at the history of his stock portfolio yes it's random yes it changes all the time but when you start following these investors for long enough you start to see that there's repeat offenders in here for example if we highlight geog group sure it's choppy but there is a history and despite all this chopping and changing over the last year Michael Barry has more often than not held both JD and Alibaba in his portfolio so my best conclusion for these two Investments is that yes bar is unpredictable and he bounces in and out of companies like a short-term Trader but I wouldn't be surprised if there is some longer term thesis in his mind when it comes to the Chinese e-commerce stocks so that's my take it with a grain of salt but that's what makes most sense in my brain also just before we move on I did just want to let you know that I am actually firing up my Instagram page again uh I've really ignored it over the past few years but if you did want to come over and see more news more short form content and also keep up to speed with everything going on in the market please come over and add me I'm new. money. official come over and say hi send me a message and I'll try and get back to you guys but with that said going back to Bar's stock portfolio so he added to the Chinese tech stocks and then from there his next biggest Holdings are actually new buyers HCA Healthcare comes in at 5.72% of his portfolio Oracle holds 5.57% then we see City Group at 5.44% CVS Health at 5.43% a 33% reduction in nextstar Media Group down to 5.39% but then a few of the stocks that I wanted to alert you guys to at the number eight and number 10 positions are Google at 5.17% and Amazon at 4.8 2% I believe in the case of Amazon this is the first time it's showed up in Bar's 13 F filings Google is a bit more of a common site although he still hasn't really owned it regularly since before the pandemic so it's interesting to see some of these American tech stocks are creeping back into his portfolio and the reason I find this so interesting is because of the performance of The Magnificent 7 over the past year we've seen the buzz around AI really power these seven stocks so much so that at the start of 2024 these seven stocks were on average 111% more expensive than how they started 2023 and with the general consensus of The Magnificent 7 which includes both Amazon and Google now being one of speculative Mania it's interesting to see bar actually put his money behind two of them because I can guarantee you bar is not the guy that would ever join a speculative stock rally in fact a few years ago he was extremely critical of Tesla and in fact he bet heavily against their stock when they went through their speculative rally so I can guarantee that him buying both Amazon and Google definitely means he sees something in these stocks even at the elevated prices although before you go out and buy any of these stocks which you shouldn't be doing based on one person's opinion anyway please remember that the only information we technically do have is that bar bought both of these companies during Q4 of 2023 which means for Google he could have bought anywhere from 123 to 142 and for Amazon anywhere from 119 to 154 and in both these cases at the time of recording both both of these stocks trade above those ranges so remember you have to be careful what you do with 13f information but beyond the purchases of both Google and Amazon bar did actually make one other move in the realm of the tech stocks but this one won't be spotted on data Roma and that's because it relates to his options positions so Michael bar in Q4 closed out of his put option position that he started in Q3 against the ishares semiconductor ETF sxx of which the largest holding is NVIDIA this ETF as you might have guessed holds American listed equities in the semiconductor sector and strangely enough there is a decent possibility that bar actually made money on this position that is if he closed out the position before roughly the end of October personally I don't know why Michael bar loves to make these bets against whatever the speculative rally is at the time like I get it it's generally a smart concept to bet against a bubble but if there's one thing that I've learned over the past 10 years it's that speculative Mania can last a very long time there's a classic line in investing the market can stay irrational longer than you can stay so dophins so personally I myself wouldn't be shorting Tesla in 2020 I wouldn't be fighting against Nvidia last year I wouldn't be shorting the market Against The Surge of The Magnificent 7 but I guess that's why I'm a dude living in a small apartment and Michael bar is out making 800 million bucks betting against the housing market in 2008 but anyway they are the three main stories coming out of Michael Bar's 13f he's still backing Chinese Tech he's also put his money behind the reasonably pricey Google and Amazon and he did close out his bet against the semiconductor ETF there were a lot more more stocks that he messed with in his portfolio so I will show the full list up on screen right now and actually while this list is up I do want to take the time to use this this as an example of how much we can really read into Bar's portfolio so as you can see a lot of the stocks in his portfolio now have decent significance in fact out of the top 10 almost all of them are 5% positions or more in the portfolio but I want to draw your attention now to this column where it details the estimated dollar value of the position as you can see throughout this whole video we're talking about positions that are maybe four five maybe $6 million each and while that is a lot of money and absolute terms it isn't really in relative terms if you have a look at Michael Bar's total portfolio size for Q4 it was just 94 million but even going back just a few years we can see that at some points his portfolio value is up around $150 $160 million and while of course investment returns will account for some of the change of his portfolio size for bar most of the variation is actually from him changing how much money he's invested in the Market at these moments in time and if we dive into his form ADV we can find that bar actually manages $238 million as of the 17th of January this year so truth be told he's actually only got about 40% of his assets under management invested in the stock market right now so you really have to be careful when you read these 13f filings and try to step back and put together the bigger picture for example we mustn't forget that 13f filings are just an SEC filing meaning that it only shows us what's in their us portfolio tells us nothing about their International Investments so when you zoom out there are limitations to looking at these filings don't get me wrong I love looking into them and they are extremely helpful but you have to be careful to understand the full picture while we spoke at length about alib Babar and JD after looking at the complete picture both of these Investments combined only represents 4.9% of Bar's total assets under management so while the headlines will undoubtedly say bar is buying China realistically it's only a small play in his overall strategy but with that said guys thanks very much for watching and I hope you still found this video useful if you did please leave a like And subscribe we're actually about to launch a free three-part investing course over on new money education if you'd like to learn how people like Michael Barry Warren Buffett and so on analyze and value stocks so if you'd like to be the first to know when that goes live please check out the links down below it's 100% free so definitely check it out and with that said I'll see you guys in the next video

Channel: New Money

Views: 457,071

Keywords: stock market, michael burry, michael burry interview, michael burry stock market crash, michael burry short, michael burry 13f filing, michael burry shorts stock market, michael burry baba

Id: dRFDM2Hr_-U

Length: 11min 4sec (664 seconds)

Published: Fri Feb 16 2024