Move Over Cathie Wood: Michael Burry Ups the Ante With Bets Against US Treasuries

Mandatory Credit: Photo by Gregory Pace/Shutterstock (5421510ec)Michael Burry'The Big Short' film premiere, New York, America - 23 Nov 2015.
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It seems that another high-profile exchange-traded fund has landed on Michael Burry’s “short” list, a week after news surfaced that he made bets against Cathie Wood’s hyper-successful ARK Innovation ETF.

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As Bloomberg reported over the weekend, Burry — immortalized in “The Big Short” for the huge and winning bets he made against the subprime mortgage crisis — is also betting against long-term U.S. treasuries.

Burry’s Scion Asset Management held $280 million of puts on the iShares 20+ Year Treasury Bond ETF at the end of June, Bloomberg noted, citing a new regulatory filing. That was an increase from $172 million three months earlier.

The iShares ETF, commonly known as the TLT, tracks Treasuries maturing in more than 20 years. As of late last week, it had risen 12% since bottoming in March, while 30-year yields had fallen to 1.87% from 2.51%.

Many investors have poured into Treasuries recently amid concern over how the COVID-19 Delta variant might impact the economy. But Burry is betting that Treasury yields will go up, which would cause the TLT to fall — and his bet to pay off.

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That’s not the only thing he is bearish on. Early last week, regulatory filings spotted by CNBC Pro found that Burry bet against Woods’ ARK Innovation ETF using options.

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Burry’s Scion Asset Management bought 2,355 put contracts against the red-hot ETF during the second quarter, CNBC reported, and held them through the end of the period. Investors profit from puts when the underlying securities decline in price.

Wood responded to Burry’s bet against her fund with the following tweet:

“To his credit, Michael Burry made a great call based on fundamentals and recognized the calamity brewing in the housing/mortgage market. I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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