Michael Burry Shorts The Stock Market – How is His Bet Going?
At the beginning of this week, insights emerged regarding Michael Burry's recent significant bet of $1.6 billion against the stock market, shedding light on his actions and preferences in the financial realm.
His focus was particularly on the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) funds.
Burry’s assumption regarding these positions has not yielded positive results. The investor, famous for predicting the 2008 mortgage market crash, has encountered a 42% decline in the value of his short bet. This information is based on data collected as of August 27.
The US stock market experienced a significant upswing in the following days, causing Burry’s losses to escalate even further. According to stock trader Gurgavin, who shared this information on August 29, Burry’s losses have now reached 53% concerning his S&P 500 and Nasdaq short positions.
Gurgavin commented, “Given the recent market rally, Michael Burry’s ‘$1.6 billion’ S&P 500 and Nasdaq short positions are now down 53%, assuming he has retained these positions.”
It’s important to note that while the total value of Burry’s positions amounts to a substantial $1.6 billion, his initial investment to establish this significant short position was a relatively small fraction of this sum. Gurgavin’s prior calculations suggest that Burry allocated around $26.5 million for this purpose.
In relation to Burry’s bearish move, well-known US economist Steve Hanke expressed his agreement with the decision, considering the widespread anticipation of an impending recession. Hanke stated, “In my view, Burry’s actions seem well-founded.” He further predicted an economic downturn in the first half of 2024.
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Burry’s recent challenges coincide with a noteworthy resurgence in US stock prices. Notably, the Nasdaq Composite witnessed a gain of over 1% on a particular Tuesday, as investors re-entered the tech stocks arena following a challenging August for the market.
The tech-focused stock index exhibited a robust climb of more than 1.7%, reaching 13,943. Similarly, the S&P 500 experienced a notable increase of 1.45%, reaching 4,497. This marked the index’s most successful day in nearly three months. The Dow Jones Industrial Average also displayed an 0.85% advance, closing at 34,852.
Leading the tech rally was Nvidia (NASDAQ: NVDA), a prominent AI chip giant, which saw an impressive surge of over 4.1%. Other technology giants such as Meta (NASDAQ: META), Tesla (NASDAQ: TSLA), and Apple (NASDAQ: AAPL) also concluded the session with higher stock values.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
