Update on Michael Burry's Portfolio

Michael Burry's Scion Asset Management Q2 2024 Portfolio

Scion Asset Management, a hedge fund managed by Michael Burry, disclosed 10 security holdings in their SEC 13F filing for the second quarter of 2024, with a total portfolio value of $52,488,000

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1. Overview of Portfolio Composition

As of the end of Q2 2024, Michael Burry’s Scion Asset Management reported a portfolio consisting of only 10 holdings, significantly reduced from previous quarters. The total portfolio value was approximately $52.5 million, down from $103 million in Q1 2024 (13F Info – SEC 13F Filings). This marked a strategic consolidation, with Burry focusing on fewer, high-conviction investments.

Top Holdings:

• Alibaba Group Holding (BABA): 21.26% of the portfolio.

• Shift4 Payments (FOUR): 13.97%.

• Molina Healthcare (MOH): 13.89%.

• Baidu (BIDU): 12.36%.

• JD.com (JD): 12.31%.

These five holdings represented over 70% of the portfolio, indicating a highly concentrated investment strategy, typical of Burry’s approach(

2. Market Context and Portfolio Performance

The second quarter of 2024 saw mixed market conditions, with several macroeconomic factors influencing equity performance:

• Chinese Stocks: Burry’s significant exposure to Chinese tech stocks like Alibaba and Baidu was a bet on a recovery in the Chinese economy. However, geopolitical tensions and regulatory challenges continued to weigh on these stocks. Alibaba, for instance, saw a modest recovery but remained volatile.

• U.S. Healthcare: Molina Healthcare, a U.S.-based company, benefited from stability in the healthcare sector, driven by continued demand and regulatory support. This holding likely provided a defensive anchor in Burry’s portfolio.

• Technology and Payments: Shift4 Payments, a U.S.-based payment processing company, reflected Burry’s interest in the technology sector, particularly fintech. The stock performed well, aided by increasing consumer spending and the adoption of digital payments

3. Portfolio Adjustments and Turnover

Burry made several significant changes during the quarter:

• Complete Sales: He exited positions in Citigroup, Block, Cigna, and BP, reflecting a strategic shift away from financials and energy. These sales likely realized losses, contributing to the overall reduction in portfolio size.

• New Positions: Additions included more speculative plays like BioAtla and Olaplex, which represented smaller percentages of the portfolio. These stocks, while high-risk, indicate Burry’s continued willingness to bet on undervalued or turnaround opportunities

4. Risk and Return Analysis

Given the concentrated nature of Burry’s portfolio, the risk profile is inherently high. With significant exposure to volatile sectors like technology (especially Chinese tech) and healthcare, the portfolio is sensitive to sector-specific risks and broader market volatility.

• Beta and Volatility: The portfolio’s beta is likely above 1, given its concentration in high-beta stocks like Alibaba and Shift4 Payments. This suggests that the portfolio would outperform in a bullish market but underperform in a downturn.

• Downside Risk: The significant drawdown in portfolio value indicates that Burry’s strategy in Q2 2024 faced substantial downside risk, particularly from his high exposure to Chinese equities, which remained under pressure due to external factors.

5. Strategic Considerations

Burry’s Q2 2024 strategy reflects a high-conviction, high-risk approach. His concentrated bets on specific sectors, particularly Chinese technology and U.S. healthcare, suggest a belief in the long-term value of these industries despite short-term challenges.

However, the significant reduction in portfolio size and the complete divestment from certain sectors could also indicate a defensive posture, potentially anticipating further market turbulence. Burry’s historical contrarian stance and tendency to take big, concentrated positions are evident in this quarter’s portfolio structure

6. Conclusion

Michael Burry’s Q2 2024 portfolio exemplifies a high-risk, high-reward strategy with concentrated bets on select industries. The performance of this portfolio will be highly dependent on macroeconomic conditions, particularly the recovery of Chinese technology stocks and the stability of the U.S. healthcare sector. Given the significant portfolio turnover and reduction in size, Burry appears to be navigating a cautious yet opportunistic path, balancing defensive positions with speculative investments.