Michael Burry Bets Big Against Nvidia, Chinese Equities

Michael Burry, the hedge fund manager renowned for his prescient prediction of the 2007 housing market collapse, has recently undertaken a significant overhaul of his portfolio. According to new SEC filings from Burry’s Scion Asset Management, the firm has adopted a notably bearish position against Nvidia, acquiring a substantial amount of put options on the chipmaker’s stock.

In addition to this move, Scion has reversed its previously optimistic outlook on Chinese equities. The fund has purchased bearish put options on several major Chinese companies, including Alibaba and Baidu. This shift in strategy indicates a cautious approach to the market, particularly in the face of potential economic downturns.

Interestingly, the only remaining long position in Scion’s portfolio is in Estee Lauder, a New York-based cosmetics company. This solitary bullish stance highlights Burry’s belief in the makeup industry’s resilience during economic recessions. The cosmetics sector is often seen as a stable investment, as consumer demand for personal care products tends to remain steady even during economic downturns.

This is not the first time Burry has made such drastic changes to his portfolio. In 2023, he significantly reduced Scion’s holdings, only to later admit that he had made a mistake. Following this admission, he placed new, targeted bets, demonstrating his willingness to adapt his investment strategy based on market conditions.

Burry’s recent moves underscore his cautious and strategic approach to investing. By taking a bearish stance on high-growth sectors like technology and Chinese equities, while maintaining a bullish position in a recession-proof industry like cosmetics, Burry is positioning his portfolio to weather potential economic storms. This strategy reflects his long-standing reputation as a contrarian investor who is not afraid to go against the grain in pursuit of profitable opportunities.