Michael Burry Puts His Money Where His Mouth Is For Market Crash Prediction: But Did He Sell Too Soon?

Famed “Big Short” investor Michael Burry has taken an extremely bearish stance during the third quarter of 2022 — but was it too much? 

What Happened: Recent 13-F filings have revealed that last quarter, Burry had holdings in 12 companies: Alphabet Inc Class A GOOGL, Apple Inc AAPL, Booking Holdings Inc BKNG, Bristol-Myers Squibb Co BMY, Cigna Corp CI, Warner Bros Discovery Inc WBD, Global Payments Inc GPN, Meta Platforms Inc META, Nexstar Media Group Inc NXST, Ovintiv Inc OVV, Sportsman’s Warehouse Holdings Inc SPWH and, Stellantis NV STLA. 

Burry has now sold all 12 of these companies' stocks and only has holdings in one company: Geo Group Inc GEO. 

In a tweet on Aug. 12, Burry shared his negative beliefs about the state of the market: “Nasdaq now up 23% off its low. Congratulations, we now have the average bear market rally. Across 26 bear market rallies from 1929-1932 and 2000-2002, the average is 23%. After 2000, there were two 40%+ bear market rallies and one 50%+ rally before the market bottomed.”

This tweet allowed investors and the general public to put his sour view of the market in perspective. 

Burry’s trading theories and ideals for this quarter seemed to be rather extreme and have many asking if the “Big Short” investor went too bearish, too quickly. 

Also Read: Famed Tesla Bear Michael Burry Takes Aim At Target: Here's Why He Thinks The Retail Giant Is In Trouble

The third fiscal quarter began on July 1 and since then the markets have been rallying. On July 1, the SPDR S&P 500 ETF Trust SPY was priced at $381.24 and since then has been up 11.8% to $426.35. In addition, the SPDR Dow Jones Industrial Average ETF Trust DIA began the quarter at $310.85 and is up 9.4% to $339.99. Last month proved to investors that the stock market is still able to recover even during harsh macro-environments, despite Burry's opinion.

Geo Group’s Performance: The private investor in prisons and mental facilities has performed very well since Burry invested in the company. Shares are up 20.8% this week and at current prices Burry’s position is worth ~$3.9 million. 

Benzinga’s Take: While Burry has continued a negative outlook about the markets, he is definitely putting his money where his mouth is. Burry's portfolio echoed his sentiments in his tweets and illustrated his lack of faith in the overall markets. 

Photo: Screenshot of Michael Burry at UCLA Economics Summit via YouTube