Michael Burry is selling all his US stocks, believing another crisis is imminent.
Michael Burry inspired the role of the leading character in the blockbuster film, “The Big Short (2015).”
Predicting and making a fortune shorting the financial subprime mortgage crisis in 2007-2010 is Michael Burry’s call to fortune.
During the 2007 financial crisis he made $700 million for clients and $100 million for himself.
Most recently, in 2022, we noted that Michael Burry set up a SARK fund in 2021, which is a 100% inverse bet against Cathie Wood’s Ark Innovation fund (ARK).
“During the 2007 financial crisis he made $700 million for clients and $100 million for himself”
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Michael Burry is selling his US stocks and is predicting another crisis on par with 2008
He has remained inactive on X since 2023, but SEC regulations mean that he is required by law to disclose his large trades, making them public.
Clues as to why Michael Burry is selling his US stocks could be found in his last cryptic post on X.
“In ascending, China seems eerily similar to the Ottomans.
Beijing believes the US is decedent, undeserving of its affluence, living beyond its means on the fumes of the past and very soon vulnerable,” he posted.
He was referring to the rise and fall of the Byzantine Empire, which he believes strongly predicts the events we will see in the coming months.
“n ascending, China seems eerily similar to the Ottomans”
MICHAEL BURRY
Michael Burry noted that while technology has drastically evolved, human behaviour has never changed.
For over 1000 years, the Byzantine Empire was at the forefront of scientific advancements from flame throwers to complex sewer systems.
The Byzantine Empire began to increase the supply of its own currency for short-term prosperity.
Meanwhile, the Ottoman Empire was on the rise, Michael Burry draws parallels to the Ottoman to China today.
Ottomans continued with their economic and military expansion, taking strategic trade routes.
China is becoming the hub of commerce, similar to how the Ottomans did in the 14th hundreds.
“My strategy is not very complex.I try to buy unrecognised companies when they look undervalued” – Michael Burry
He noted that China’s Belt and Road Initiative connects Asia and Africa through two new trade routes.
China is the most dominant manufacturer in the world.
The US leads innovation but also is facing stagnation in key industries, such as manufacturing.
Michael Burry’s thesis is similar to that of Ray Dalio, who sees the rise of a great power challenging the dominant power.
It is this changing world order that best explains why Michael Burry is selling his US stocks
But he is also buying three big Chinese stocks.
As of 2024, 25% of Michael Burry’s portfolio was in Alibaba, 24.8% was in JD.com, and 15% of his portfolio was in Buu.
“My strategy is not very complex. I try to buy unrecognised companies when they look undervalued. The market likes to throw out the baby with the bath water, so I try to find value shares at deep discounts,” he said.
The fear of the SEC delisting Chinese stocks if they don’t have independent auditors is why Michael Burry believes Chinese stocks are undervalued today.
