“The Big Short” guy is now sounding the alarm yet again.
Michael Burry, who is the hedge fund manager that famously bet against the nation’s housing market back in 2008, recently said in a now deleted tweet, “Stock markets and bonds depend on the Fed being stripped of all credibility.”
This was not his first warning.
“All speculation and hype is doing is bringing in retail right before the mother of all crashes,” Burry said in another deleted tweet he made earlier this year.
Burry does a lot more than just talking.
As of June 30, the top position in his company was a huge $730 million bet against Tesla (using put options).
Still, Burry is not down on everything. Let us take a look at two companies that the top investor is very bullish about .
Burry’s largest “long” position is interesting to many investors: call options for 941,000 Facebook shares.
Call options give investors more upside possibility than simply owning the company shares, but they are also more risky.
To be sure, Facebook has had a rough time recently. The company had a huge outage last week and has faced criticism over a whistleblower’s recent testimony.
The stock is lower by around 13% over the previous month. But year to date, the stock has returned a good 23%.
Facebook is without a doubt the biggest social media platform out there, with its family of services having a whopping 3.51 billion monthly active users as of June.
Financials are also on the increase. In the second quarter 2021, revenue went up by 56% year-over-year to a $29.1 billion value while the company’s earnings per share (EPS) more than doubled from one year ago.
Alphabet now controls a market cap of more $1.8 trillion as the parent company of Google. But Burry believes it might get even larger.
At the close of June, his company had call options on 91,900 Alphabet shares.
The search engine handily beat Wall Street’s predictions in the second quarter this year, getting a 62% revenue growth and a net income increase of 166% from last year.
In their recent earnings call, Ruth Porat, Alphabet’s CFO, said she anticipates “a more muted tailwind to company revenues in Q3.” But that didn’t stop shares of Google from going up.
Author: Scott Dowdy