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dr michael berry is making headlines once again with his new short positions his latest 13f filing gives us a glimpse of what we can expect out of the markets in the next few months and or years just seven days ago michael brewery's 13f filing was released in this video we will go over his top positions and break down his portfolio to give us a different market perspective for those of you not familiar with a 13f filing the securities and exchange commission's sec form 13f is a quarterly report that is required to be filed by all institutional investment managers with at least 100 million dollars in assets under management it discloses their equity holdings and can provide some insight into what the smart money is doing in the market however studies have found that 13 f filings also have serious flaws and can be taken at face value since august of last year we've seen the us 10-year bond rise rapidly just a little over one full point from 0.51 to now 1.62 jerome powell head chairman of the federal reserve states that we are experiencing transitory inflation and the inflation we are seeing is of no concern he also says they have the tools necessary to maintain inflation levels at a favorable 2 or below and based on their metrics they don't see them worrying about inflation until 2023 what is interesting is that we are up just over one point in less than one year and half a point away from their targeted two percent level of concern michael berry is calling his bluff and expresses it through his current positioning and just to add more fuel to the fire michael bury's twitter account was deleted after sec officials visited him back in march michael brewery has continued to express his market outlook via twitter and american officials are not happy about it back in 2019 he began to openly speak about the index fund and etf's bubble expressing his concern about passive investing and i quote the simple thesis and the models that get people into sectors factors indexes or etfs and mutual funds mimicking those strategies these do not require the security level analysis that is required for true price discovery this is very much like the bubble in synthetic asset-backed cdos before the great financial crisis in the price setting and that market was not done by fundamental security level analysis but by massive capital flows let's take a look at barry's latest portfolio his biggest position is the infamous tesla short that is valued at 534 million dollars at the time of the filing before we all go running around like headless chickens and begin to shore tesla here are some things to consider unfortunately we don't know when he entered the position and how much time he bought on these tesla puts it is very possible he already cashed in some profits and now has a free trade and or have completely sold out of his position of some great profits the last word of caution before getting excited on shorting tesla is that he hedged this position with multiple bullish co-op positions like google facebook craft heinz iwo growth etf cvs and netapp if we add the values of all these calls they are just a little over 450 million dollars that's about 50 million dollars less than his tesla short he hedged one massive short with multiple long positions and that is how he mitigated his tesla short position risk this is one of his two options strategies i see on his portfolio the second strategy is tlt puts and tbt calls he is shorting tlt which represents the us 20 year treasury bonds he's basically saying inflation is around the corner and interest rates will rise now if we take a look at tbt this is a leveraged inverse 20 year bond etf i personally fold around several times with inverse etfs and they are pretty much a never ending downward conveyor belt that will devour your long positions over time most of the time when these leverage etfs hit rock bottom the casino will do a reverse split and wipe out all the options market before turning back on the downward conveyor belt what i'm trying to say is that these etfs are beyond risky and impossible to profit from but michael brewery is convicted and bought options on tbt you need to be an outlier in order to time and profit from such instruments it's practically impossible to time these leverage etfs here michael bury is long inflation with two instruments and one of them being very gamble-like and aggressive if we look at the rest of his positions he owns stocks in real estate consumer staples health care utilities energy and finance a lot of these individual stocks are small cap stocks with potential of high growth i like to watch michael bury's positions every quarter i feel that most of us retail and smaller investors can learn and relate to his style of investing although he manages 1.4 billion dollars in assets that is small compared to the bigger funds he invests on smaller cap stocks and trades the large cap stocks in most cases these are my takeaways from michael bury and his latest positions michael bury is known to have a lot of patience thus making him one of the best he began to publicly talk about and index an etf bubble late 2019.
fast forward to today it's been over a year and a half and we saw a market correction last year with a very fast recovery basically if you were short since his public concerns you might have made some money during the pandemic last year but that would have been it most people continued to short the market last year after the pandemic lows and a lot of people shortly lost a lot of money during the v-shaped recovery i'm not saying that that was the end of that bubble but i am saying that it is extremely difficult to time these market downturns to be profitable now his concerns are surrounding inflation he thinks we will see interest rates rise very soon by aggressively longing instruments like tbt adding to his portfolio positioning the sec shut down his twitter account which also signals another red flag i do think he's correct overall but he's also going up against the federal reserve he's held up against the odds before and rolls above but it took him years and a lot of money at risk to be correct that type of money in patience the majority of us don't have i do think it's time to build an inflationary position now whether it's energy consumer staples finance healthcare or utilities this is something that might happen as early as this year if not it can be a position you can build over the next couple of years for when the time comes for inflation and higher interest rates thank you guys for watching if you enjoyed this video make sure to like and subscribe and i'll see you on the next one
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