Dr.Michael Burry became known for predicting and profiting from the 2008 financial crisis. He, along with other Wall Street legends like John Paulson and Kyle Bass, bet against mortgage-backed securities, a move that proved incredibly lucrative when the housing market collapsed. Burry’s investment strategy, as outlined in the book and the movie “The Big Short,” involved identifying undervalued securities and utilizing financial instruments such as short-selling and derivatives to exploit market inefficiencies. He is also known for his bearish views on the market, including recent bearish bets against Nvidia and major Chinese technology stocks.
24/7 Wall St. Key Points:
- After a furious rally, the major indices have recaptured most of the April losses
- The Nasdaq briefly slipped into bear market territory in April 2025, while the S&P 500 approached but did not officially enter a bear market
- Some on Wall Street think we could retest the April lows
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The mortgage meltdown started 2008 Global Financial Crisis
Michael Burry’s short position on the housing market resulted in a $100 million personal profit for him and an estimated $700 million for his firm’s investors, which was then called Scion Capital and is now known as Scion Asset Management. While a truly massive gain, by comparison, John Paulson’s hedge fund, Paulson & Co., generated a total of $15 billion in profits from shorting the housing market in 2007 and 2008. Paulson personally made approximately $4 billion from this bet against the mortgage and housing market, and has been called by some on Wall Street the “greatest trade ever.”
13F Filings reveal Michael Burry’s selling
Recent 13F filings noted that Mr. Burry sold all of the stock in his portfolio in the first quarter, except for one, which he doubled down on, the cosmetic and fragrance giant Estee Lauder Companies Inc. (NYSE: EL | EL Price Prediction). In addition to selling all of his holdings, numerous published reports also indicate that he purchased puts on NVIDIA Corp (NASDAQ: NVDA), Alibaba Group Holding Ltd (NYSE: BABA), Baidu Inc. (NASDAQ: BIDU), JD.com Inc. (NASDAQ: JD), and PDD Holdings Inc. (NASDAQ: PDD).
What happens next?
The fascinating question for investors now is whether Dr. Burry sold all of the holdings in the first quarter, before the big sell-off, which started when the market peaked on February 18th, or did he sell as stocks began to decline? Either way, he could have re-entered some of these positions after the sell-off bottomed out in early April. Needless to say, like other top Wall Street investors, Michael Burry is bearish on Chinese technology stocks. With reports of a framework for a trade deal and a 90-day suspension and reduction of recently imposed tariffs, could he be rethinking his strategy, given that US tariffs would drop from 145% to 30% and Chinese tariffs from 125% to 10%?
The reversal of strategy on Alibaba, and Mr. Burry’s ongoing aversion to semiconductors, as he has noted that the group’s fundamentals do not justify the sky-high valuations, will be interesting to track as we move through the second quarter and the remainder of 2025.
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