Michael Bury accustomed business circles and the general public to unusual solutions.
The legendary investor is used to brilliant strikes.
The financier, known for betting on the collapse of subprime mortgages before the 2008 crisis, likes to go against the general trend on Wall Street.
In recent months, the man whose business acumen was made famous by the 2015 film The Big Short has kept predicting that the economy will fall into recession. He expects a decline in the stock market.
The worst, he says, is yet to come. He adds that he foresees a household debt crisis that would pose a serious threat to the economy.
“Remember the savings glut problem? Enough more. The anti-covid helicopter money has taught people to spend again and it’s addictive. Winter is coming,” Bury warned last August.
“Winter is Coming” appears to be a reference to the HBO series Game of Thrones. The characters use the phrase as a warning.
Bury suggested that households continue to spend money without looking, which also affects their savings. This puts Americans in a precarious financial situation inflation remains a drag on the economy.
He then confirmed the dire forecast by liquidating nearly his entire US stock portfolio in the second quarter. Scion Asset Management, his firm, only owned stock in one company, Geo Group (GEO) – Get a free reporteffective June 30, according to regulatory filings.
At that time, Scion owns 501,360 shares of Geo, worth $3.31 million. The company invests in private prisons and mental health sites.
As of March 31, Scion Asset Management had invested in 11 companies, including Alphabet (GOOG) – Get a free reportmeta platforms (META) – Get a free reportStellantis (STLA) – Get a free reportBristol-Myers Squibb (BMY) – Get a free report and Signa (CI) – Get a free report. Geo Group was not listed in March. So this is a new addition.
Burry’s investment strategy evolved further. As of September 30, the financier appears to have bought the decline in market shares. He added shares of new companies to his portfolio, which now includes six companies, compared with just one as of June 30.
The sectors in which he chose these companies are also interesting: Bury is betting on the media, aerospace and keeping his faith in prisons. According to a new regulationsshow that he acquired shares of Aerojet RocketDyne (AJRD) – Get a free reportCharter Communications (CHTR) – Get a free reportCorecivic (CXW) – Get a free reportGeo Group, Liberty Latin America (LILAB) – Get a free report and Qurate Retail (QRTEA) – Get a free report.
In total, its equity portfolio totaled $41.3 million, up $38 million from three months earlier.
Bury’s choice to invest in media is surprising as the sector has been one of the hardest hit by the recent stock market sell-off.
Stock market regulations require fund managers with more than $100 million in U.S. stocks to file a document known as a 13F within 45 days of the end of the quarter to list their holdings in U.S.-traded stocks.