As of Q3 2024, Michael Burry’s portfolio showcases significant investments with strategic movements in key sectors. Below is a detailed overview of Burry’s holdings: 

1. BABA – Alibaba Group Holdings 25.55% 2. JD – JD.com Inc. 24.08% 3. FOUR – Shift4 Payments Inc. CL A 16% 4. BIDU – Baidu Inc. 15.85% 5. MOH – Molina Healthcare Inc. 12.45% 6. OLPX – Olaplex Holdings Inc. 2.83% 7. REAL – RealReal Inc. 1.89% 8. ACIC – American Coastal Insurance C 1.36%

BABA – Alibaba Group Holdings
Portfolio Allocation: 25.55%
Recent Activity: Added 29.03%
Shares Held: 200,000
Reported Price: $106.12 per share
Value at Reported Price: $21,224,000

Alibaba remains the largest position in Burry’s portfolio, with a notable increase in shares. Alibaba, a Chinese tech giant, is a leader in e-commerce, cloud computing, and digital media. Burry’s commitment to Alibaba indicates confidence in its ability to navigate regulatory challenges and leverage China’s growing digital economy.

JD – JD.com Inc.
Portfolio Allocation: 24.08%
Recent Activity: Added 100.00%
Shares Held: 500,000
Reported Price: $40.00 per share
Value at Reported Price: $20,000,000

JD.com saw a significant addition, doubling Burry’s exposure to this Chinese e-commerce giant. As one of China’s largest online retailers, JD.com is known for its vast logistics network and high-quality supply chain. Burry’s increased stake suggests optimism about the company’s long-term growth, driven by demand for efficient delivery and a trusted shopping platform.

FOUR – Shift4 Payments Inc. CL A
Portfolio Allocation: 16%
Recent Activity: Added 50.00%
Shares Held: 150,000
Reported Price: $88.60 per share
Value at Reported Price: $13,290,000

The addition of Shift4 Payments represents Burry’s belief in the payment processing industry, especially as digital transactions become more central to the economy. Shift4 provides innovative solutions for payment processing in sectors like hospitality, retail, and e-commerce, and its growth potential aligns with the ongoing trend towards cashless transactions and digital commerce.

BIDU – Baidu Inc.
Portfolio Allocation: 15.85%
Recent Activity: Added 66.67%
Shares Held: 125,000
Reported Price: $105.29 per share
Value at Reported Price: $13,161,000

Baidu’s increased position reflects Burry’s optimism about its advancements in AI and autonomous technology. Often called the “Google of China,” Baidu leads in AI research and is heavily invested in autonomous driving and smart city initiatives. Burry’s increased stake underscores his confidence in Baidu’s potential to capitalize on technological advancements in China.

MOH – Molina Healthcare Inc.
Portfolio Allocation: 12.45%
Recent Activity: Added 22.30%
Shares Held: 30,000
Reported Price: $344.57 per share
Value at Reported Price: $10,337,000

Molina Healthcare’s position demonstrates Burry’s interest in the healthcare sector, which provides stability to his portfolio amid high market volatility. Molina specializes in government-sponsored health plans such as Medicaid and Medicare, and its defensive qualities make it an attractive holding during uncertain economic times.

OLPX – Olaplex Holdings Inc.
Portfolio Allocation: 2.83%
Recent Activity: Added 0.48%
Shares Held: 1,000,000
Reported Price: $2.35 per share
Value at Reported Price: $2,350,000

Olaplex remains a smaller position, with a minor increase. Known for its innovative haircare products, Olaplex has established a strong brand presence in the beauty and personal care sector.

REAL – RealReal Inc.
Portfolio Allocation: 1.89%
Recent Activity: Reduced 50.00%
Shares Held: 500,000
Reported Price: $3.14 per share
Value at Reported Price: $1,570,000

The reduction in RealReal’s position suggests a cautious outlook on the luxury consignment market. RealReal operates an online marketplace for authenticated luxury goods, catering to environmentally conscious consumers.

ACIC – American Coastal Insurance Co.
Portfolio Allocation: 1.36%
Recent Activity: Reduced 60.30%
Shares Held: 100,000
Reported Price: $11.27 per share
Value at Reported Price: $1,127,000

American Coastal Insurance saw a substantial reduction. Specializing in coastal property insurance, ACIC is particularly exposed to risks related to natural disasters and climate change.

To analyze Michael Burry’s Q3 2024 portfolio in light of his Q2 2024 strategy, we see some notable adjustments and trends that reflect both a continued belief in certain high-growth sectors and a cautious approach to volatile markets.

Overview of Portfolio Changes

1.  Increased Concentration in Key Holdings:

Alibaba (BABA) and JD.com (JD) have increased significantly in their portfolio weight, now representing 25.55% and 24.08% of the portfolio, respectively. These positions reflect Burry’s strong confidence in Chinese tech stocks, particularly in companies with robust e-commerce platforms. The increased allocations likely signal his continued optimism about a recovery in China’s economy, despite ongoing geopolitical risks and regulatory hurdles.

Shift4 Payments (FOUR) and Baidu (BIDU) also saw substantial increases. Shift4’s weight rose to 16% of the portfolio, and Baidu to 15.85%, suggesting Burry’s belief in the resilience of the technology sector, especially within fintech and AI applications in China.

2.  Healthcare and Defensive Holdings:

Molina Healthcare (MOH) remains a significant part of the portfolio (12.45%), with a 22.3% increase in shares. This aligns with Burry’s defensive strategy within the healthcare sector, which may offer stability amid market volatility. The healthcare sector, particularly companies focused on managed care, provides a counterbalance to the higher-risk tech holdings.

3.  Speculative Small-Cap Holdings:

Olaplex Holdings (OLPX) and RealReal (REAL), smaller consumer and e-commerce plays, saw mixed adjustments. While Olaplex saw a minor increase, RealReal’s position was halved, reflecting cautious exposure to consumer goods and online retail. This could be an acknowledgment of the risk inherent in the luxury resale market, possibly due to shifts in consumer spending habits.

American Coastal Insurance (ACIC) also saw a substantial reduction (60.3%), suggesting a potential move away from insurance due to either performance concerns or reallocation towards higher-conviction sectors.

Market Context and Strategic Considerations

In the third quarter of 2024, the market environment remained complex, with high volatility in tech stocks and a potential slowdown in China’s economic recovery. This backdrop likely influenced Burry’s increased positions in Chinese tech giants like Alibaba, JD.com, and Baidu. By doubling down on these companies, he appears to be taking a contrarian stance, betting on a turnaround in sentiment and fundamentals within China’s tech industry.

Healthcare, represented by Molina, continues to provide a defensive anchor in Burry’s portfolio. This balance between high-growth tech stocks and steady healthcare positions shows a blended strategy, aiming for both long-term upside and short-term risk management.

Portfolio Strategy Shifts

The strategic shift from Q2 to Q3 demonstrates Burry’s evolving view of market risks and opportunities:

1.  Contrarian Bets on Chinese Tech:

The increased allocations to Alibaba, JD.com, and Baidu show a high-risk, high-reward stance on Chinese tech recovery. Despite global pressures, Burry’s confidence in these companies may stem from their dominant market positions and growth potential in AI, cloud computing, and e-commerce.

2.  Selective Reduction in High-Risk Positions:

Reductions in companies like RealReal and ACIC indicate a trimming of positions in sectors with uncertain near-term outlooks. This aligns with Burry’s cautious approach to managing exposure in more speculative or less predictable sectors, especially given the consumer and insurance markets’ current dynamics.

3.  Healthcare as a Defensive Position:

Burry’s continued investment in Molina Healthcare underscores a preference for stability amid market volatility. Molina’s exposure to government-backed healthcare programs offers a hedge against downturns, reflecting Burry’s strategy of balancing high-risk tech with more predictable, demand-driven sectors.

Conclusion

Michael Burry’s Q3 2024 portfolio shows a calculated shift towards increased concentration in high-conviction stocks within the technology sector, specifically Chinese e-commerce and AI-driven companies. His increased allocations in Alibaba, JD.com, and Baidu reflect a bold bet on the potential recovery of Chinese tech giants, despite external pressures. Meanwhile, his continued investment in Molina Healthcare signifies a strategic counterbalance, providing stability through a defensive healthcare holding.

The portfolio adjustments from Q2 to Q3 reveal Burry’s nuanced approach to navigating uncertain markets: he has maintained his high-conviction, high-risk strategy but has also shown a willingness to prune speculative positions with less favorable risk-reward profiles. Burry’s Q3 portfolio exemplifies a blend of contrarian optimism in Chinese technology and prudence in healthcare, positioning him to potentially capitalize on market rebounds while protecting against downside risks.