Big Short’s Michael Burry Shifts Investments from US to Chinese Tech Stocks

Michael Burry, the investor renowned for foreseeing the 2008 housing crash, has recently made significant changes to his stock portfolio, suggesting a shift in his economic outlook.

According to a recent post, Burry has liquidated about $50 million in tech stocks, including major players like Amazon, Alphabet, and Oracle. These stocks, which made up roughly 15% of his portfolio in 2023, were sold off in the first quarter of 2024. This move indicates Burry’s concern over the high valuations of US tech companies amidst rising inflation and a declining dollar.

Game of Trades highlighted that Burry’s massive tech sell-off is a major warning signal for the economy. The tech sector has seen impressive gains since early 2023, with valuations reminiscent of the 2000 Dot-Com bubble. Current price-to-earnings ratios for US tech stocks are at a 20-year high, making them significantly more expensive than the market average.

In a strategic pivot, Burry has redirected his investments toward Chinese tech firms such as JD.com, Alibaba, and Baidu, now holding about $23 million in these companies. This shift is driven by the lower valuations of Chinese stocks compared to their US counterparts, which are at their lowest in over 15 years.

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Burry’s recent investment decisions reflect his cautious stance on the overvalued US tech market while seeking opportunities in the undervalued Chinese market. This comes as the US stock market, particularly the tech sector, has seen significant rallies, raising concerns among analysts about a potential market correction or recession.

In summary, Burry’s portfolio adjustments underscore his strategic approach to navigating economic uncertainties, focusing on the relative value and potential of different markets.