‘Big Short’ investor Michael Burry just made a big bet on gold — and dumped tech giants Alphabet and Amazon
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Michael Burry’s moves tend to make headlines.
The hedge fund manager famously bet against the U.S. housing market in 2008 and won big — a move that was depicted in the hit movie “The Big Short.”
Since then his investments have been closely watched.
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According to a filing with the Securities and Exchange Commission, Burry’s company Scion Asset Management has made quite a few adjustments to its portfolio in Q1 of 2024.
Among Burry’s notable moves were selling his stakes in Amazon (AMZN) and Alphabet (GOOGL) and increasing his holdings of Chinese companies JD.com (JD) and Alibaba (BABA).
Burry also made a substantial bet on gold by purchasing 440,729 shares of Sprott Physical Gold Trust (PHYS), valued at $7.6 million at the end of Q1, making it the fifth-largest position in his portfolio. The closed-end fund's official website says it holds “substantially all of its assets in physical gold bullion.”
A unique feature of the Sprott Physical Gold Trust is that investors have the right to redeem their units for physical metals on a monthly basis, provided they meet the minimum redemption amount. This requirement is quite substantial, as "a unitholder must have enough units to equate to one full-sized London Good Delivery bar (approximately 400 oz)."
Gold’s gleaming rise
Gold is already experiencing a remarkable surge. At the beginning of this year, the precious metal was trading at $2,062 per ounce. Today, it’s at $2,357 per ounce, reflecting a 14.3% increase.
To put this into perspective, gold has outpaced the S&P 500, which has gained 11.7% over the same period.
There are many reasons why investors might want to add gold to their portfolios. One notable reason is inflation. Inflation often arises from central banks' ability to freely print fiat money. Gold, however, cannot be created out of thin air. Its relative scarcity and durability make it a reliable hedge against inflation, preserving purchasing power when paper currency loses value.
Additionally, gold can act as a safe haven during times of economic uncertainty and geopolitical tension. During periods of market volatility or global instability, investors often turn to gold for its stability and reliability. This precious metal has historically maintained its value, making it a trusted asset in uncertain times.