Macro

Burry's $10M Bet on Gold Fund as Top Investment

Michael Burry invests over $10 million in gold, marking his largest Q1 bet amidst rising gold prices and global tensions.

By Alex P. Chase

5/15, 13:34 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
AMC Entertainment Holdings, Inc.
Alibaba Group Holding Limited
Citigroup, Inc.
HCA Healthcare, Inc.
JD.com, Inc.
Sprott Physical Gold Trust ETV
Block, Inc.
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Key Takeaway

  • Michael Burry's Scion Asset Management invested over $10 million in Sprott Physical Gold Trust (PHYS), marking it as his largest position.
  • PHYS trades at a 1.67% discount to its net asset value, amidst gold prices reaching new highs due to inflation and geopolitical risks.
  • Besides gold, Burry increased stakes in JD.com, Alibaba, HCA Healthcare, Citigroup, and Block by the end of March.

Burry's Golden Bet

Michael Burry, the investor famed for his prescient call on the subprime mortgage crisis, has made a significant move into gold, purchasing over 440,000 units of the Sprott Physical Gold Trust (PHYS), valued at more than $10 million. This investment in PHYS, a closed-end fund that holds physical gold bullion, marks Burry's largest bet in the first quarter. The trust is currently trading at a 1.67% discount to its net asset value, slightly above its 52-week average discount. This move comes as gold prices have surged, reaching new highs amid reaccelerating inflation and growing geopolitical tensions, with U.S. gold futures topping $2,400 at their peak last month.

Diversified Holdings

In addition to his investment in gold, Burry has increased his stakes in Chinese e-commerce giants JD.com and Alibaba. His portfolio also includes significant positions in HCA Healthcare, Citigroup, and Block, showcasing a diversified approach to investment. Burry's strategy reflects his ability to identify value across a broad spectrum of assets, from precious metals to technology and healthcare sectors. His fame, largely attributed to his successful bet against mortgage-backed securities before the 2008 crisis, continues to make his investment moves highly watched in the financial world.

Gross's Meme Stock Maneuver

Bill Gross, known for his legendary status in the bond market, has shifted his focus towards options trading on meme stocks, specifically GameStop Corp. and AMC Entertainment Holdings Inc. Gross sold calls and puts on these stocks, capitalizing on their high volatility driven by speculative trading. His strategy involves selling straddles, betting that the stock prices will not fluctuate beyond a certain range, allowing him to profit from the premium collected. This move highlights Gross's adaptability and willingness to engage with the speculative dynamics of the current market, despite critiquing the meme stock phenomenon as treating the stock market like a casino.

Management Quotes

  • Michael Burry, Scion Asset Management:

    "Piled into a physical gold trust in the first quarter, making it his biggest bet."