Investor Michael Burry's latest SEC report revealed bearish bets against the economy.
Michael Burry, a well-known investor and hedge-fund manager raised red flags with his latest investments.by Michael Lewis, revealed his latest investments in a new filing with the Securities and Exchange Commission on Monday. The 13F filing showed that his fund, Scion Asset Management, bet big on stocks that would benefit from a Wall Street crash.
The investments come as many Americans remain uncertain about the country's economic prospects. High inflation and home prices, as well as recession concerns, have plagued the economy in the years since the COVID-19 pandemic, which caused a massive, yet temporary, global economic downturn in 2020. According to the 13F filing, Burry has bought put options valued at $738.8 million in NASDAQ 100 , and $886.5 million in S&P 500 . A put option gives the buyer an option to sell"a specified amount of an underlying security" at a specific price in a specific time frame, according to Investopedia.
Traders work on the floor of the New York Stock Exchange on August 02, 2023 in New York City. Investor Michael Burry's latest SEC filing raised red flags about the possibility of economic downturn.Put options become more valuable as the value of the stock decreases, and they lose value when the value of the stock increases, according to Investopedia.
By investing $1.6 billion into these two put options, Burry is essentially betting $1.6 billion on these funds, which track two of the largest U.S. stock indexes, decreasing in value over the coming months, which could be an indicator of an economic downturn.reached out to Scion Asset Management for comment via email.
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