Michael Burry, the hedge fund manager who became famous for bets against the US housing market before the 2008 global financial crisis, appears to be betting big on a stock market downturn.
US filings show Burry's fund, Scion Asset Management, has bet more than NZ$2.6 billion (US$1.6 billion) against the S&P 500 and Nasdaq 100 Index, CNN reports.
Over NZ$1.4 billion (US$866 million) was reportedly bought in put options against a fund that tracks the S&P 500 whilst NZ$1.2 billion (US$739 million) was bought in one that tracks the Nasdaq.
Investors with put options have the right to sell a given stock at a certain price in the future. According to CNN, Burry's bet on a stock market downturn amounts to using more than 90% of his portfolio.
Burry’s bearish stance contrasts with the strong performance of the S&P 500 and Nasdaq 100 so far this year. The two indices have risen roughly by 17% and 39%, respectively for the year to date, according to Reuters data.
The investor gained a fortune in the mid-2000s by betting against the US housing market, profiting from the subprime lending crisis in 2008, which ultimately led to the global financial crisis.
His story was later partly adapted into a film, The Big Short, where Burry was played by Christian Bale.
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