Michael Burry has broken free from the shackles of financial regulation — and he’s making the most of his newfound liberty by sharing his favorite stocks.
The prescient investor of “The Big Short” fame closed his hedge fund to outside cash this month, saying he felt “muzzled” by SEC rules and wanted to speak freely via his new Substack, fittingly titled “Cassandra Unchained.”
“You know I own and like LULU, MOH, FOUR,” Burry wrote in a Wednesday post. “Also FNMA, but as a pink sheet stock, it was never disclosed. These are all 3-5 year holds minimum. I will write each of these up as well as others in future posts. The 2-12B market cap range is the most fertile area as I see it today.”
Burry also said it’s a “great time of year to find great companies being sold down too far as a result of window dressing and tax-loss harvesting.” He explained that “many managers do not like to show they have owned big losers at the end of the year,” but that doesn’t bother him.
Michael Burry/Cassandra Unchained
The four tickers posted by Burry refer to Lululemon Athletica, Molina Healthcare, Shift4 Payments, and the Federal National Mortgage Association, also known as “Fannie Mae.”
Lululemon is an athletic-apparel retailer known for its premium yoga pants. Molina provides affordable health insurance and healthcare services, primarily to low-income and senior Americans. Shift4 Payments is a fintech that provides payment processing and various commercial tools to the likes of hotels, restaurants, stadiums, and online retailers.
Fannie Mae is a government-sponsored enterprise that supports the US housing market by guaranteeing over $4 trillion worth of mortgages against credit losses, making it easier and cheaper for Americans to buy homes.
The first three have popped up in Scion Asset Management’s portfolio updates over the past 12 months or so, while Fannie Mae shares trade on over-the-counter markets, so Burry’s firm didn’t have to disclose them in its 13F filings.
Burry is a bargain hunter
Burry is famous for successfully shorting the mid-2000s housing bubble and frequently predicting crashes and recessions. He’s a deep-value investor who specializes in spotting bargains, especially smaller, beaten-down stocks. Year to date, Lululemon shares have tanked 52%, Molina shares have tumbled 49%, and Shift4 Payments shares have plunged 32%.
Those declines reflect their prices after they rallied with the broader market over the past five trading days, gaining between 5% and 10% each. All three have market values under $25 billion, and Lululemon and Molina shares trade at under 15 times their projected earnings per share this financial year.
Jeff Greenberg/Getty Images
In contrast, Fannie Mae shares have roughly tripled this year, fueled by speculation that the Trump administration will privatize Fannie Mae and corporate sibling Freddie Mac, ending the federal conservatorship imposed on them after the financial crisis and paving the way to a main-market listing.
In an X post last week, Burry signaled he owned Molina stock and was also betting against AI darling Palantir using bearish put options, even after CEO Alex Karp berated him for doing so.
“Long MOH stock and Long PLTR puts, like peanut butter and bananas,” Burry wrote. He said earlier this week that he’s short Nvidia as well.
Palantir shares have soared about 26-fold since the start of 2023, valuing the AI firm at nearly $400 billion, or about 90 times its projected revenue this year.
In another Wednesday post on X, Burry revealed that Keith Gill, the retail trader known as “Roaring Kitty” who helped turn GameStop into a meme stock in January 2021, had emailed Burry way back in August 2019 to thank him for pushing for changes at the ailing video-game retailer. The message shows Gill and Burry both saw potential in GameStop long before it became a retail darling.
