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Michael Burry, of ‘The Big Short’ fame, announced an $8 million bet on gold this week.
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The renowned investor purchased a trust that owns physical gold.
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John Paulson, who also called the housing crisis of the mid-2000s, remains big on gold.
It turns out that Michael Burry isn’t just a metalhead when it comes to music.
The investor of “The Big Short” fame bought approximately 441,000 units of Sprott Physical Gold Trust last quarter. The trust holds substantially all of its assets in physical gold bullion.
Burry’s Scion Asset Management disclosed its first-quarter holdings in a regulatory filing this week. The gold bet was worth $7.6 million at the end of March, making it Scion’s fifth-largest position, with a 7.4% weighting in the company’s $103 million U.S. stock portfolio.
If the bet remains intact, it was valued at $8.1 million on Friday, according to Sprott’s bullion calculator.
Buying gold is a surprising move by Burry, a value investor known for snapping up dirt-cheap stocks — including GameStop, years before it became a meme stock.
He’s also betting against high-flyers like Elon Musk’s Tesla, Cathie Wood’s Ark Innovation ETF and a microchip ETF that Nvidia considers a top holding.
Burry rose to fame by predicting and profiting from the collapse of the housing bubble in the mid-2000s. The saga was chronicled in the book and movie “The Big Short.”
John Paulson made his name with a similar bet, immortalized in a book titled “The Greatest Trade Ever.” Like Burry, the head of Paulson & Co. seems to be. optimistic about gold and other precious metals.
Paulson’s company counted AngloGold Ashanti, Agnico Eagle Mines, Equinox Gold, Iamgold, International Tower Hill Mines, Novagold, Perpetua Resources, Seabridge Gold and Trilogy Metals among its 18 holdings at the end of March, an SEC filing showed this week.
In 2021, the veteran investor predicted that persistent inflation would force the Federal Reserve to raise interest rates, prompting investors to dump their cash and other assets for gold. He argued that the double whammy of rising demand and limited supply would push up the price of the yellow metal.
Paulson’s call proved prescient. The Fed has raised its benchmark interest rate from near zero to over 5% in an effort to curb inflation, and gold prices have risen from around $1,800 per troy ounce when Paulson touted them in 2021 to record levels above $2,400 in recent weeks . .
Burry also correctly predicted inflation and rising interest rates, and appears to share Paulson’s view that gold could benefit.
However, it’s worth pointing out that portfolio updates are only a snapshot of an investor’s investments on a single day, and may have changed by the time they’re made public.
They also exclude stocks sold short, private investments, foreign holding companies, and non-equity assets such as bonds and real estate.
Still, Burry’s relatively large and uncharacteristic gold purchase is certainly notable – especially when one of the few other winners of the housing crisis is also betting big on the precious metal.
Read the original article on Business Insider
