Hedge fund manager Michael Burry makes strategic portfolio moves in Q4 2023

Hedge fund manager Michael Burry, renowned for his astute predictions preceding the 2008 US housing market collapse, has made significant moves in his portfolio according to recently released securities filings.

Burry's Scion Asset Management disclosed its actions for the fourth quarter of 2023, showing notable acquisitions and exits in various sectors. Among these transactions, Burry's fund added 375,000 shares of Warner Brothers Discovery, illustrating a strategic shift in investment focus. The disclosures, filed as 13-Fs, offer a retrospective glimpse into the portfolio strategies of often-guarded hedge funds.

During the quarter, Scion Asset Management initiated positions in several companies, indicating a diversified approach. Burry's fund acquired 200,000 shares of restaurant software company Toast Inc, alongside 225,000 shares of discount retail chain Big Lots, and 154,142 shares of Gen Restaurant Group.

These additions signify Burry's confidence in specific sectors despite broader market fluctuations. The filings underscore the importance of transparency in understanding the dynamics of institutional investor portfolios.

In a notable departure, the fund closed out a put option position on semiconductor stocks, previously valued at $47.4 million. The decision to exit this position coincides with a significant rise in the iShares Semiconductor ETF over the fourth quarter, suggesting a strategic reassessment by Burry and his team.

While put options typically benefit from declines in underlying shares, the fund's actions reflect a shifting market outlook. The disclosures shed light on the intricacies of hedging strategies employed by prominent investors.

Additionally, Burry's fund liquidated positions in Bookings Holdings and automaker Stellantis during the quarter. These divestments highlight a dynamic approach to portfolio management, with Burry reallocating resources based on evolving market conditions.

The filings serve as a valuable resource for analysts and investors seeking insights into the decision-making processes of hedge funds. Despite their retrospective nature, 13-F filings provide crucial information for understanding investment trends.

Reflecting on market performance, shares of Warner Brothers Discovery have declined by 15 per cent year-to-date, while Big Lots has experienced a substantial decrease of nearly 55 per cent over the same period.

Conversely, Toast Inc shares have seen a modest increase of approximately 7.5 per cent, with Gen Restaurant Group showing slightly more robust growth at over 13 per cent. These fluctuations underline the dynamic nature of equity markets and the challenges faced by investors in navigating them.

Burry's largest holdings, Alibaba Group Holdings and JD.com Inc, have both experienced declines of 6 per cent or more year-to-date amid concerns surrounding the Chinese economy's growth trajectory. These developments highlight the importance of monitoring macroeconomic factors and their impact on investment strategies. While Burry's past successes have earned him a reputation as a savvy investor, his recent portfolio adjustments reflect the ongoing evolution of market dynamics.