3. Prepare for Inflation, Bitcoin and Gold at Risk
Source: Twitter, February 2021
Just as the vaccine rollout allowed for the partial reopening of the economy and buoyed investors, Burry was there to spoil the party again. He tweeted in February that investors should prepare for inflation where hedges like Bitcoin and gold would be at risk. He also said that governments would move to squash competitors in the currency arena during an inflationary scenario, hinting that Bitcoin could be at risk. This prediction only turned out to be partially true.
Although Beijing has cracked down on crypto in China, resulting in a dramatic drop in the prices of cryptocurrencies, there has been positive news on the crypto front as well, with El Salvador adopting Bitcoin as legal tender. In terms of inflation, even though market fears in this regard continue to persist, Federal Reserve Chair Jerome Powell on June 23 told lawmakers that problems like rise in demand for goods and supply chain problems would resolve in the near-term and ease inflation-related pressures.
Burry holds a large stake in The Kraft Heinz Company (NASDAQ: KHC), the food company that operates from Chicago. At the end of the first quarter of 2021, Burry had call options on more than 1.1 million The Kraft Heinz Company (NASDAQ: KHC) shares worth close to $47 million.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in The Kraft Heinz Company (NASDAQ: KHC) with 325 million shares worth more than $13 billion.
In its Q4 2020 investor letter, Berkshire Hathaway, an asset management firm, highlighted a few stocks and The Kraft Heinz Company (NASDAQ: KHC) was one of them. Here is what the fund said:
“We exclude our Kraft Heinz holding — 325,442,152 shares — (In the list of 15 common stock investments that at yearend were our largest in market value) because Berkshire is part of a control group and therefore must account for that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of $13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020.
Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method. Currently, the most significant of these is our investment in the common stock of The Kraft Heinz Company (“Kraft Heinz”). Kraft Heinz is one of the world’s largest manufacturers and marketers of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Berkshire currently owns 325,442,152 shares of Kraft Heinz common stock representing 26.6% of the outstanding shares…(Click here to see the full text).
