'Big Short' Legend Michael Burry Bets Big On Lipstick Index - Estee Lauder Cos (NYSE:EL)

Legendary investor and hedge fund manager Michael Burry recently doubled down on his investment in cosmetics giant Estée Lauder Companies, Inc. (NYSE:EL). Burry's move could reflect a strategic bet on the so-called “Lipstick Index,” which suggests consumers turn to more affordable luxuries like cosmetics during economic downturns.

What To Know: According to its most recent SEC filing, Burry's hedge fund Scion Asset Management doubled its stake in Estée Lauder in the first quarter of 2025. The investment firm purchased an additional 100,000 shares in the world’s second-largest cosmetics company, bringing its total holdings to 200,000 shares.

Burry shot to fame after correctly predicting and reaping a massive profit from the US property market meltdown of 2008, which sparked a worldwide financial crisis. His extraordinary move at the time to take on Wall Street titans and wager against an overheated housing market has been captured in Michael Lewis’s book “The Big Short” and a Hollywood movie by the same name.

Burry’s Latest Positions

Burry closed out all of Scion's long positions in Chinese tech companies and opened short positions in several of the same stocks including Alibaba Group Holdings, Ltd. (NYSE:BABA) and JD.com, Inc. (NASDAQ:JD). Scion also opened a short position in Trip.com Group Ltd. (NASDAQ:TCOM), the largest online travel agent in China.

In fact, Estée Lauder is the hedge fund's only remaining long position.

Burry's investment in the cosmetics company could be viewed as a play on the Lipstick Index, which holds that even during a recession, consumers will continue to purchase cosmetics as affordable indulgences.

"The Lipstick Index doesn't just apply to lipstick. The theory behind the Lipstick Index is that when money is tight, consumers substitute costly purchases with cheap luxuries like lipstick," Kevin Shahnazari, founder of FinlyWealth, told LevelFields.

"In the 2008 recession, cosmetics sales increased, showing that even in tough times, individuals crave tiny comfort purchases that give psychological boosts without a hefty financial outlay," Shahnazari added.

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