Macro

Burry's Scion Exits Tech for Gold, Eyes China Stocks Surge

Burry shifts from tech to gold, buying $10M in Sprott Physical Gold Trust, diversifies with Chinese stocks amid rising gold prices.

By Alex P. Chase

5/16, 01:37 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Amazon.com, Inc.
Alibaba Group Holding Limited
Citigroup, Inc.
Alphabet Inc.
HCA Healthcare, Inc.
JD.com, Inc.
Sprott Physical Gold Trust ETV
Block, Inc.
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Key Takeaway

  • Michael Burry's Scion Asset Management exits positions in tech giants Alphabet and Amazon, shifting focus to gold and Chinese stocks.
  • Investments include buying Sprott Physical Gold Trust, highlighting a pivot to commodities amidst geopolitical and inflation concerns.
  • Increases holdings in Alibaba and JD.com as Chinese stocks rally, with the KraneShares CSI China Internet ETF up over 16% this year.

Burry's Strategic Shift to Gold

Michael Burry, the renowned investor behind Scion Asset Management, has notably shifted his investment strategy by divesting from tech giants like Alphabet Inc. and Amazon.com Inc. in favor of physical gold. This move is highlighted by his purchase of over 440,000 units of the Sprott Physical Gold Trust (PHYS), valued at more than $10 million, making it his largest bet in the first quarter of 2024. The Sprott Physical Gold Trust, a closed-end fund that holds physical gold bullion, is trading at a 1.67% discount to its net asset value, amidst a backdrop of rising gold prices due to inflation and geopolitical risks. U.S. gold futures recently peaked at over $2,400, underscoring the heightened investor interest in gold as a safe haven.

Diversification into Chinese Markets

In a significant pivot, Burry has also increased his holdings in Chinese companies, specifically e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc., both of which trade in the U.S. as American Depository Receipts (ADRs). This move comes as Chinese stocks have seen a rally in 2024, with the KraneShares CSI China Internet ETF, which includes Alibaba and JD.com, up more than 16% since the start of the year. This diversification into the Chinese market represents a strategic broadening of Burry's investment portfolio, which also includes significant positions in HCA Healthcare, Citigroup, and Block, showcasing a wide-ranging approach to investment across various sectors.

The Allure of Physical Gold

Gold's appeal has been magnified in 2024, with prices reaching record highs amid ongoing geopolitical worries and persistent inflation concerns. This surge has propelled the Sprott Physical Gold Trust up 16% for the year, to $18.50 a share as of the latest close. Burry's substantial investment in PHYS underscores a broader market trend of gravitating towards tangible assets amid economic uncertainty. The trust's trading at a discount to its net asset value further highlights the market's current valuation discrepancies, offering a potentially lucrative entry point for investors.