In this article, we discuss Michael Burry’s stock portfolio: top 8 stock picks.
Legendary investor Michael Burry is best known for his contrarian strategies that often outperform the overall market. Burry is famous for having foreseen the subprime mortgage crisis that occurred from 2007 to 2010. He shorted the mortgage bond market, making $800 million for himself and his investors.
While he made a name for himself at the height of the financial crisis in 2007, the legendary investor has built a reputation on Wall Street on his ability to identify and invest in market-beating opportunities. His recent actions demonstrate a trend toward high-conviction investments in cheap, market-leading businesses.
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“Dr. Burry’s one of those investors who doesn’t just follow the crowd,” says Edward Corona, a market trader and publisher of The Options Oracle Newsletter. “He’s a true contrarian, digging deep into the numbers and spotting opportunities others might miss.”
China is one market in which the legendary investor is taking a keen interest, going by holdings in Scion Asset Management, a hedge fund he established in 2013. While the investment fund focuses on long-term capital appreciation, it also targets undervalued or misunderstood investment opportunities. That’s evident given that Burry’s biggest holdings are Chinese internet giants that have been battered in recent years amid a slowdown in the Chinese economy due to heightened regulatory pressure.
The changes in Scion Asset management came as Beijing stepped up its attempts to boost economic growth while putting breaks to regulatory pressure. Although the unexpected stimulus plan caused a wild surge in Chinese stocks, some market watchers are still wary of the industry’s long-term prospects. The CSI 300 Index, the nation’s equity benchmark, rose 32% in just two weeks following Beijing’s stimulus measures.
Despite identifying as a value investor, Burry tends to jump in and out of positions frequently rather than hold his stocks for an extended period. That was evident as he exited his position in a real estate company in the third quarter on concerns that the sector would capitulate amid high interest rates. His most significant action during the third quarter was selling all of his shares in a real estate investment trust (REIT) in Los Angeles. He used the money he received to hedge against potential losses on some of the company’s biggest investments.
Michael Burry of Scion Asset Management
Our Methodology
To make the list of Michael Burry Stock Portfolio: Top 8 Stock Picks we scanned Scion Asset Management portfolio. We then settled on the legendary investor top holdings and analyzed why they stand out as long term plays. Finally, we ranked the stocks in ascending order based on Scion Asset Management’s stake value in the companies.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Michael Burry Stock Portfolio: Top 8 Stock Picks
8. American Coastal Insurance Corporation (NASDAQ:ACIC)
Scion Asset Management’s Stake Value: $1.13 Million
Number of Hedge Fund Holders: 15
American Coastal Insurance Corporation (NASDAQ:ACIC) specializes in commercial, personal property, and casualty insurance. ACIC has consistently shown profitability by focusing on risk management and underwriting discipline, while aiming to seize opportunities in favorable market conditions. In order to position for future growth, the company is undergoing a strategic transformation that involves reallocating resources from personal to commercial lines and strengthening its partnership with AmRisc.
American Coastal Insurance Corporation (NASDAQ:ACIC) reported significant improvements in its third-quarter financial performance, with revenues increasing 56% to $82.1 million. Net income nearly tripled to $28.1 million compared to $10.6 million the previous year same quarter. The underlying combined ratio increased from 59.2% to 52.9%, indicating outstanding underwriting performance.
Growing confidence in American Coastal Insurance Corporation’s (NASDAQ:ACIC) ability to manage risk while preserving profitability is demonstrated by the strategic reduction in quota share reinsurance. A disciplined approach to the market is demonstrated by the consistent gross written premiums of $93 million with improved margins.
7. The RealReal, Inc. (NASDAQ:REAL)
Scion Asset Management’s Stake Value: $1.57 Million
Number of Hedge Fund Holders: 20
The RealReal, Inc. (NASDAQ:REAL) is a specialty retailer that operates an online marketplace for the resale of luxury goods. It offers various product categories, including women’s, men’s, Jewellery, and watches. It primarily sells products through online marketplace and retail stores. It was one of the best-performing stocks in Michael Burry’s portfolio after rallying 400% in 2024.
The company’s blockbuster gains last year were due to a renewed profit focus under new leadership, boosting market sentiment. Higher profit margins due to a revamped consignment fee structure and less dependence on low-margin direct sales also bolstered sentiments on Wall Street.
Additionally, The RealReal, Inc.’s (NASDAQ:REAL) average order value increased 1.8% year over year to $522, affirming strong demand for its products. The net merchandise value (NMV) increased 10.7% year over year, surpassing the 6.2% growth in gross merchandise value (GMV), thanks to an exceptionally low return/cancellation rate of 22.6%, the lowest in four years. Customers respond favorably to the company’s value-focused approach, highlighting the items’ original primary list price. As 2024 ended, demand grew stronger due to lower interest rates and improved consumer purchasing power.
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