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Michael Burry just went all in on the worst financial crisis in history. I’ve spent the past few weeks researching everything about Burry to finally uncover his intricate investment strategy. Burry made hundreds of millions on the dot-com bubble and 2008 recession, and he now believes he can make billions of dollars in the coming months. If you search up Michael Burry’s portfolio online, you can find Burry’s disclosed holdings pretty easily. That is just what Burry wants you to see. Burry holds 11 stocks worth a total of $165 million and options contracts worth roughly $3 million. Burry’s total public holdings is roughly $168 million, but according to Burry’s Form ADV, he manages $291 million. So where did Burry invest the remaining $123 million? This video will explain exactly how Burry just went all on the incoming market crash.

Before we get into Burry’s confidential holdings, we have to talk about his publicly disclosed stocks and options. Michael Burry manages a hedge fund named Scion Asset Management, which needs to disclose its assets every quarter through 13F filings. A 13F filing is a form by the Security and Exchange Commission that discloses institutional stock and options holdings. Every institutional fund manager that manages at least $100 million in assets must file a 13F filing. Michael Burry manages roughly $300 million, so he must complete a 13F filing by law. On page 3 of his latest 13F filing, you can see how Burry owns 11 different stocks and one put option. All of these stocks are bets on his short-term macroeconomic thesis. Burry expects inflation to continue to accelerate in a cyclical fashion, with prices spiraling upwards. With his inflation thesis in mind, Burry has chosen stocks that will thrive as inflation accelerates over the next few years. One of the key factors during inflation is input costs. Input costs are costs that occur during the creation of a product or service. Some examples of this include labor, materials, fuel, buildings, and equipment. The higher the input costs are, the worse a business will do during an inflationary period. This is because if prices rise, input costs will as well and consequently lower profit margins. For instance, airline companies are currently dealing with two major input costs: higher fuel prices and wages. Airlines have been raising ticket prices, but because inflation is constantly accelerating, airplane tickets must continuously rise as well. Higher ticket prices will reduce consumer activity, causing airline companies to experience lower profits. Michael Burry is fully aware of the importance of input costs during inflationary periods. He holds 11 stocks worth a total of $164.8 million that have a common theme These holdings can be categorized into four categories: travel, tech, healthcare, and value. Burry’s two holdings in the travel sector are going to benefit significantly from increasing oil prices. For example, Booking Holdings is an online booking company that earns a set commission on bookings. As ticket prices rise, so will the profit of Booking Holdings. The second holding, Ovinitiv owns a company named EnCana that extracts natural gas. This means that as gas prices rise, so will Ovinitiv’s profits. Michael Burry also owns tech stocks that have little to no input costs. Companies like Google and Meta are almost entirely based on the internet, which requires minuscule material costs. Burry’s holdings in the healthcare sector have the characteristic of having strong pricing power, which is the ability to raise prices. Both Cigna and Bristol Myers have relationships and patents that give them substantial market share. Lastly, Burry also owns value stocks that are trading at a steep discount to their true value. Because the stocks are already trading below their true value, their valuations don’t have as much room to fall. Even though I separated Burry’s holdings into four categories, most of the companies have very similar characteristics. Almost all of them have extremely high profit margins, major competitive advantages, strong pricing power, huge cash positions, and low valuations. The most important characteristic out of them all is pricing power. Warren Buffett once described pricing power as the most important aspect of any business, especially during inflationary periods. Having pricing power ensures that companies will continue to produce profits as inflation accelerates. Burry also holds put options on Apple stock. Put options are contracts to sell 100 shares of stock at a certain price. For instance, let’s say there is a put option on Google stock that has a strike price of $3,000 and an expiration date of July 13th, 2023.