“Big Short” investor Michael Berry’s new bets on the S&P 500 and Nasdaq-100 come as no surprise. Here’s why.

Michael Bury

Michael Bury.Jim Spielman/Getty Images

  • Michael Perry has bet on two ETFs tracking the S&P 500 and Nasdaq-100 in the most recent quarter.

  • The investor “Big Short” held bearish put options on the SPDR S&P 500 and Invesco QQQ in June.

  • Burry sounded the alarm in the stock market and pointed out the dangers of index funds.

Michael Bury a statement Big bets against Standard & Poor’s 500 And Nasdaq 100 In his latest portfolio update. The stakes will not surprise his close followers.

Burry’s Scion Asset Management held bearish put options on 200,000 shares of SPDR S&P 500 ETF Trust – an exchange-traded fund that tracks a US stock index – at the end of June, a Securities and Exchange Commission filing Show on Monday.

Celebrity investor “The Big Short” also revealed that he has offered 200,000 shares in Invesco QQQ Trust, which tracks the high-tech Nasdaq 100 index. The combined face value of the two positions was $1.6 billion on June 30, but Burry’s options will cost him a fraction of that amount.

These two holdings could be hedges, intended to cushion the blow to Scion’s portfolio if the stock market dips and the value of its long positions declines. But they may also point out that Perry is pessimistic about the two index funds, which are dominated by strong value stocks like Tesla and Nvidia.

The Scion boss has been sounding the alarm about stocks and other risky assets for a while now. For example, he diagnosedThe greatest speculative bubble of all time“expect”The mother of all accidentsIn the summer of 2021.

he Proposal Last spring, the S&P 500 might have only bottomed about 1,900 points — down 57% from its current level — if it followed the pattern of previous crashes. he Shown Last summer, the Nasdaq Composite could drop as low as 6,000 points, or about 56% from here, as valuation multiples narrowed and corporate earnings fell.

Perry also called out the passive investing boom in recent years. Describing it as a “bubble” in 2019, W.J He said in 2021 That the influx of millennial money into index funds and ETFs was driving stocks to dangerously high levels.

In October, it is He said The trend was setting the stage for an even bigger catastrophe than the internet meltdown, and huge losses for investors.

“The difference between now and 2000 is the negative investment bubble that has inflated steadily over the past decade,” he wrote on Twitter. “The theaters are all crowded and the only way anyone can get out is by stepping on each other. And the door is still too big.”

It is worth noting that Barry said “It is wrong to say sellThis spring, and Bought a bunch of shares in recent quarters. But the S&P 500 and Nasdaq-100 have jumped about 16% and 38%, respectively, this year, not far from their all-time highs.

Given Barry’s previous skepticism about stocks and dire warnings of epic crashes, he is very likely to be bearish on the indices and bet that they will crash.

Read the original article at Business interested

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