Michael Burry, who earned a fortune in the 2000 and 2008 crises, told the SEC that he acquired regional bank shares in the first quarter. Burry may have sold shares before or during the banking crises. After tweeting “SELL” on the final day of January, Michael Burry later said “I was wrong” in March admitting that he had invested in organizations whose names were affected by the recent banking crisis.
Who Is Michael Burry?
American investor Michael Burry is famous for foreseeing the 2008 meltdown of the housing market . He established Scion Capital a hedge fund that successfully hedged against the risk of subprime mortgages via the use of credit default swaps . The book and film “The Big Short” brought attention to his tale. Through careful research and a contrarian approach to investing Burry was able to benefit from the crisis . This elevated his profile in the financial world.
Scion Asset Management, Burry’s hedge fund disclosed holdings of $7.6 million in New York Community Bank (NYCB) stock, $4.4 million in Western Alliance (WAL) stock, $2.4 million in PacWest (PACW) stock, $2 million in Huntington Bank (HBAN) stock and $2 million in First Republic (FR) stock to the SEC.
Burry has also put $4.6 million into another industrial powerhouse Wells Fargo (WFC) . Whether the renowned investor still has the shares or sold them before or during the banking crisis is unknown . Therefore Michael Burry may have suffered a significant loss as a result of these acquisitions or he may have decided to absorb the loss after realizing a certain level of sales.
Burry’s Predictions Are Far Off from Reality
It’s common knowledge that shares in these banks, particularly PacWest and Western Alliance, dropped significantly a few weeks ago . However after First Republic’s bankruptcy, JPMorgan acquired its assets. Despite Monday’s gains bank stocks remain down between 50 and 80 percent from their January 1 highs . Burry did not provide any commentary on the matter. During the financial crisis the famed investor was quoted as saying to the Fed, “Even if we went back to the 1920s, they couldn’t be as bad as you.”
Michael Burry repeatedly predicted that the Fed will reduce interest rates and then resume its money-printing strategy.
