The "big shorts" who made money during the subprime mortgage crisis made a move, and they bought Chinese companies!
Michael Burry, a name that once spooked Wall Street.
He became famous in the subprime mortgage crisis in 2007, and he made a name for himself in the international capital circle through shorting, and his story was adapted into the movie "The Big Short".
Recently, Bury's hedge fund has made a new move.
He went long sharply and "bought" Chinese companies while selling some U.S. stocks.
This is somewhat "surprising", what signal did this hedge fund god smell again?
Long JD Ali
According to the disclosure information of the SEC in the United States, as of the end of the first quarter of 2024, Bury's hedge funds have significantly increased their positions in Chinese concept stocks.
Among them, JD.com and Alibaba became its largest and second largest heavy stocks, with a month-on-month increase of 80% and 66.67%.
In fact, since the fourth quarter of 2022, the above two internet companies have entered the Bury position portfolio, but the decisive buying occurred in the first quarter of 2024.
Liquidation of popular stocks in U.S. stocks
It is reported that Burry recently opened a position in Baidu, which is listed on the U.S. stock market in the first quarter, which has become another "evidence" of his optimism about Chinese concept stocks.
While going long on Chinese stocks, Bury liquidated two US internet giants, Google and Amazon, in the last quarter.
The operation of going long and short on the other really attracts the attention of the market.
Childhood experiences are different
Born in 1971, Bury is 53 years old, and he has had a different experience than many of his peers.
In fact, from an early age, it was difficult for him to maintain proper eye contact with others.
Bury suffered from a rare form of cancer as a child, and he had to have his left eye removed before he was two years old, and he has been wearing a glass eye ever since.
Bury often experiences all sorts of social awkwardness. He later recalled that his early experiences had enabled others to see the world in a different way. He has "difficulties" in relationships and considers himself a loner. To compensate for his social dilemmas, he learned to analyze data with a rigorous eye and see details that others can't.
In the second grade of elementary school, I began to study stocks
For example, he began to have his "first experience" of the capital market in the second grade of primary school, when he liked toy jeeps very much, so he went to find various materials of jeep companies and taught himself a fundamental study of automobile companies. By the time he reached high school, he had already started to invest real money.
In 1993, he graduated from the prestigious University of California, Los Angeles (UCLA) with a degree in economics. He has since completed a medical program at another university and served as a neurology residency at Stanford University Hospital.
During his medical career, he started writing investment blogs.
Since the end of the 1990s coincided with the Internet gold rush, blogs became the prototype of self-media. Bury is active in a stock trading community called Silicon Investor, where he has contributed more than 3,000 investment ideas in just four years in sub-sectors such as value investing and Warren Buffett.
Abandon medicine to invest
In 2000, Bury took the initiative to create a turning point in his life - he gave up medicine to invest and enter the capital market.
他创立了一家名为传人资产（Scion Asset Management）的对冲基金。
The name has quite a source.
For one, Bury's start-up capital comes from the family legacy, which is $1 million.
Second, the term "Scion" is a reference to the 1990 fantasy novel "The Scions of Shannara," which focuses on adventure and magic.
At that time, Bury's start-up pilot was very crucial, and it was at the end of the bursting period of the Internet bubble in the US stock market, and in 2001, the net value of his fund rose by more than 50%, making a good start.
As it turned out, he was a gifted hedge fund manager, with a back-to-back earnings in the first three years of his business, and by 2004 the hedge fund had grown to $600 million.
It's worth mentioning that the official website of the Heir Asset is "empty" and doesn't contain anything other than a contact email address and a map in the background.
Bears war
After Bury started his business in the early 2000s, there was a "stupid bundling" phenomenon in the American market, which laid the groundwork for Bury's future fame.
At the time, many of the big banks foolishly tied their fate to the subprime mortgage-backed securities market. However, this market has fatal structural flaws. Some sensible investors see the short-sightedness of banks and the dangerous nature of these types of mortgage bonds. Then, if the fund manager chooses to bet, then he will receive a huge profit from a short trade.
Bury is one of the smart investors.
In 2005, Bury officially sold and began accumulating positions in the subprime mortgage market, using $1 billion of fund assets in credit default swaps on subprime mortgage bonds.
His bet on the U.S. housing crash paid off, and the short-selling deal earned Bury's clients $725 million and added about $100 million to Bury's personal assets.
Bury, who was full of money, decided in June 2008 to close the hedge fund and liquidate all outside clients' assets.
After that, he turned to operate his own funds and family wealth, and hid in the fund. It wasn't until 2013 that he made a comeback, soliciting funds from external clients and deciding to invest in resources and agricultural products.
Bury's comeback that year was not unrelated to the Federal Reserve's big release, and he naturally sensed the opportunity for the market to "go up".
Bearish on the US market
In fact, Bury's bearish sentiment towards the U.S. market has been "intensifying" since 2019, constantly prompting the high risk of U.S. stocks through social platforms.
He even posted in 2022: "That familiar stupidity hasn't gone away. ”
This has become the "background board" for all of its clearances of Google and Amazon in the first quarter of this year.
An article familiar with his investment style said that Bury's job was to go back and forth between buying stocks and analyzing financial statements. But his approach to analyzing reports is different, and no one else wants to do the hard and tedious work of actually researching the target company. He even takes the initiative to review obscure court rulings and government regulatory documents to gain valuable information that could change the value of the company and the market.
Is this why he is bullish on Chinese concept stocks? How long will he hold the shares?
Time will tell.
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