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Michael Burry just did something nobody expected. Over the past few weeks, the man who predicted 2008 before anyone else, the guy they made a movie about, quietly loaded up on six different stocks that the entire market has given up on. He bought every single one with his own money, posted every trade on his Substack with full reasoning attached, and timed several of them so perfectly that one of his picks already exploded 17% in five days.
If you have any exposure to the stock market right now, even an index fund in your 401k, you need to see exactly what he is buying. Because if Burry is right again, the next 12 months are going to be brutal for most investors and life-changing for a very small group of people who actually understand what is happening.
Before we get into the six trades, you need to know why this guy's moves carry so much weight. he made a fortune for his investors betting against the US housing market in 2007 and 2008. actually happened. After 2008, he kept quietly running Scion for nearly two decades. Sometimes brilliant, sometimes early on the timing, but always hunting for the bubble nobody else could see.
Then, in late 2025, he did something strange. He shut Scion down entirely. He pivoted late last year from running clients' money to only investing his own and writing about his strategy on Substack. He launched a paid newsletter called Cassandra Unchained, and the subscriber base has exploded. For the first time in his career, Burry is not .
He is publishing them himself in real time with his full reasoning attached. Nobody in modern finance has ever opened up their playbook this way before. And between April 15th and April 29th, 2026, he published a series of trading posts containing six brand new long positions. Every single one in something the market has been throwing out with the bathwater.
Let's go through them one by one. On April 15th, Burry opened a brand new position in PayPal at exactly $49.37 per share, sizing it at roughly 3.5% of his portfolio. PayPal has been an absolute disaster of a stock. After the company reported Q4 2025 earnings on February 3rd, adjusted profit came in at $1.23 per share, missing the $1.29 estimate.
The stock collapsed 19% on the day. The CEO got fired, forward guidance got slashed, branded checkout growth, which was supposed to be the engine of PayPal's transformation, decelerated to just 1% year over year. Over a five-year window, the stock is down roughly 84% from its highs. Most investors look at that chart and assume PayPal is a dying business, slowly losing relevance to Apple Pay, Google Pay, and Stripe.
Burry sees something completely different. Underneath the carnage, the business is still extremely valuable. Venmo grew revenue around 20% year over year to $1.7 billion. PayPal still processes nearly $1.8 trillion in total payment volume every year. The company generates over $6 billion in adjusted free cash flow annually and announced it intends to repurchase another $6 billion of its own shares in 2026.
This is not a dead company. This is a compressed cash flow machine being priced like a dying one. The board fired Alex Chriss and brought in Enrique Lores, formerly CEO of HP, to take over on March 1st to execute the operational reset. There is a powerful historical parallel here. In 1963, American Express got caught up in what became known as the Salad Oil Scandal, which exposed the company to massive losses and crashed the stock.
Wall Street decided Amex was structurally broken. Warren Buffett saw something different, a brand and a network that customers and merchants kept using regardless of the scandal. He bought heavily. Amex recovered, then compounded for decades, and became one of Buffett's most legendary investments. Burry is making essentially the same bet on PayPal.
The brand still works. The network still works. The cash flow still works. At $49 a share, the market is pricing in terminal decline. The stock has historically traded at 25 times earnings versus today's roughly eight times forward earnings. Just a partial multi normalisation is a three times return.
On April 24th, Burry finally ramped up his position in Sprouts Farmers Market, ticker SFM, at roughly $73 per share, sizing it at about 3% of his entire portfolio. Sprouts is a small organic grocery chain based in Phoenix. 12 months earlier, the stock was trading at $182. By the time Burry bought, it had collapsed into a $65 to $85 range.
A more than 50% drawdown in a year for what is essentially a high-quality, debt-light, growing specialty grocer. Burry's reasoning was pure contrarian deep value. He explicitly said the stock had gotten too far ahead of itself, and he was glad it came back. He said he believes there is a long runway ahead for the business.
At his $73 entry, the stock was trading at roughly 14 times forward earnings. The bearishness was based on a misread of who Sprouts actually competes with. Wall Street was treating Sprouts like a Walmart competitor getting squeezed by inflation. But Sprouts doesn't sell to Walmart's customers. It sells to higher-income consumers who care about organic and specialty products.
A demographic that has remained surprisingly resilient through the consumer slowdown. And then something extraordinary happened. Five trading days after Burry's disclosure, on April 29th, Sprouts reported Q1 2026 earnings. Diluted EPS came in at $1.71, beating the consensus estimate of $1.67. Gross margin held at a robust 38.8%.
And critically, management raised its full-year 2026 EPS guidance to a range of $5.32 to $5.48, and authorized aggressive share repurchases. The market reaction was violent. The stock rocketed up over 17% in a single session. Burry made roughly 14% in five trading days on a position sized at 3% of his fund.
He timed the catalyst almost perfectly without needing to predict the catalyst itself. This is the textbook Burry setup. Hated stock. Strong fundamentals. Earnings catalyst nobody saw coming. Massive overshoot to the downside followed by a snapback to fair value. On April 22nd, Burry bought more GameStop at $25.56 per share.
GameStop is one of his three largest positions. Together with jd.com and Molina Healthcare, these three names make up over a third of his entire portfolio. Here is what will confuse most people. Burry's current GameStop thesis has nothing to do with the meme stock squeeze of 2021. He is not betting on Reddit.
He is not betting on a short squeeze. He is buying GameStop the way Warren Buffett would buy a discounted holding company. Look at what is actually on the GameStop balance sheet. Over $8.8 billion in cash and highly liquid securities, including a Bitcoin position worth nearly $370 million. Against that, only about $4.2 billion in 0% convertible notes outstanding.
The market cap is around $11.5 billion. Strip out the cash and you are paying about $6.5 billion for the actual operating business, which is essentially nothing once you realize Ryan Cohen has been signaling he wants to use that cash hoard to acquire something transformational. And Cohen is putting his own money where his mouth is.
Back in January, Cohen bought 1 million GameStop shares for a total of 21,359,200 of his own personal money at an average price around $21.36. His total ownership now exceeds 9% of the entire company. Even more revealing is his compensation package. Cohen's pay only fully vests if GameStop hits a $100 billion market cap and $10 billion in cumulative EBITDA.
At today's market cap of around $11 billion, that requires nearly a 10x return. He is not getting paid unless this becomes one of the great corporate transformations of the decade. Now, connect this to Burry's bigger picture. If you believe, as Burry goes, that the AI CapEx cycle eventually corrects and triggers a market dislocation, you are also betting that good companies will go on sale.
In that scenario, cash becomes the most valuable asset in the world. Ryan Cohen has nearly $9 billion in cash ready to deploy in exactly that environment. So, GameStop is simultaneously two things. In a normal market, it's a boring, cash-rich holding company with limited downside because the balance sheet supports most of the market cap.
In a crash, it transforms into an offensive weapon. Burry gets the cash. He gets the operating business for free. He gets a founder CEO with a $100 billion vision and skin in the game. And he is getting paid to wait. Also on April 24th, Burry added significantly to his Molina Healthcare position at roughly $174 per share.
Wall Street basically hates the stock. Burry pointed out the math himself. Out of 19 analysts covering Molina, only three rated a buy. The bearishness is the consensus view. And the headline numbers really do look terrible at first glance. Q1 2026 GAAP earnings per share came in at $0.27, a 95% year-over-year decline.
On the surface, Molina looks like a company in serious trouble. But here is where Burry's edge shows up. That 95% EPS drop was almost entirely driven by a one-time $93 million impairment charge tied to the company's planned 2027 exit from the Medicare Advantage Part D product line. That entire line of business was actually losing money.
Management is killing it on purpose. The impairment is a non-cash accounting hit, not a real operational problem. Strip the impairment out and the underlying business is doing something extraordinary. Operating cash flow for the quarter came in at $1.082 billion. That's more than five times the $190 million Molina generated in the same quarter the previous year.
That is a company with a one-time accounting hit hiding an enormous cash machine underneath. There is also a powerful structural tailwind here. Medicaid is one of the few areas of healthcare with secular growth driven by an aging population and the expansion of dual eligible programs. Molina is one of the dominant operators in that space.
And historically, managed care stocks get crushed during reform cycles before re-rating massively when margins normalize. United Health went through a similar valuation reset in the early 2000s before becoming one of the best performing healthcare stocks of the decade. Burry's thesis is about a return to over $20 in earnings per share within a couple of years.
At a normal 15 times multiple on $20 of earnings, that is a $300 stock. From his entry near $174, that is a 70% return without anything heroic happening. And the validation came almost immediately. The day after Burry doubled down, Bank of America upgraded Molina from underperform all the way to buy and lifted its price target from $152 to $250.
One of the largest banks on Wall Street basically validated his thesis 24 hours after he made the trade. Move number five is actually a combined trade, two stocks Burry treats as a single pair position. On April 24th, he added significantly to his Fannie Mae shares at $7.03 and his Freddie Mac shares at $6.29.
Bringing the pair back up to his target portfolio weight. If you don't know the story, this is one of the most interesting setups in the entire market and it has been quietly compounding asymmetric optionality for almost two decades. Fannie Mae and Freddie Mac are the two government-sponsored enterprises that effectively underwrite the entire US mortgage market.
Together they guarantee something like 70% of all US residential mortgages. They were placed into conservatorship by the Federal Housing Finance Agency in September 2008. Their common stock has been trading like a stressed paper ever since. In 2012, the Treasury implemented what became known as the net worth sweep, diverting essentially all of Fannie and Freddie's profits to the federal government.
The companies have since paid back many times what taxpayers injected during the crisis, but common shareholders have been cut out of those profits. Hedge fund manager Bill Ackman has held the same trade for over a decade betting on eventual release. The trade is purely about regulatory evolution. Talk about releasing Fannie and Freddie from conservatorship has heated up dramatically over the past year.
The Trump administration has signaled openly that it wants to end the conservatorship. The new FHFA leadership has begun implementing operational reforms that read like preparation for a release. None of this guarantees an exit happens, but the political tailwind is the strongest it has been in years.
It's a binary trade, and you have to be honest about that. Either the political will lines up and the equity gets restored, or it doesn't. So, why does Burry keep buying at these levels? Because the asymmetry is enormous. He's paying $7 and $6 per share for something that, in a successful release scenario, could be worth $40 or more apiece.
The downside is limited because the price is already so compressed. The upside, if the politics break the right way, is multi-bagger. This is classic Burry. Find the trade where the market has priced in the bearish outcome with near certainty, and where any positive surprise generates an enormous payoff.
It's the same mathematical setup he used with credit default swaps in 2007. Move number six, and Burry's most recent. On April 29th, he bought more of the Bruker Corporation 6.375% mandatory convertible preferred stock with a conversion date of September 1st, 2028. This one is technical, but it shows how Burry thinks about asymmetric risk in a totally different way from a normal stock purchase.
Bruker is a small lab instruments company that makes high-end scientific equipment. Burry has actively traded the common stock for years and knows it intimately, including its weakness of getting hit hard whenever US science funding is under pressure, even though the company is internationally diversified.
The preferred is a different animal. Last September, Bruker raised $600 million by issuing this 6.375% mandatory convertible preferred at $250 per share to deleverage the balance sheet ahead of looming debt maturities. Here is the genius part. The preferred pays a 6.375% fixed dividend paid quarterly.
So, while Burry holds it, he's collecting yield higher than what he could get on Treasury bills. On the conversion date in September 2028, each preferred share automatically converts into Bruker common stock. The minimum conversion rate is 6.9534 shares of Bruker common stock if Bruker is trading above the threshold price of $35.95.
But, here's the trick. If Bruker's stock falls below the threshold, the conversion rate increases up to a maximum of 8.5179 shares per preferred share. The worse the stock does, the more shares you get. In plain English, he gets paid 6.375% to wait. He keeps full upside if Bruker stock rallies, and he gets cushioned on the downside because he gets more shares if the stock falls.
Yield plus equity optionality plus a built-in margin of safety all in one instrument. In a market where most assets are priced for perfection, this is a legitimately rare trade structure where the math is tilted in your favor, no matter what happens. Warren Buffett's most famous line in finance is this: Be fearful when others are greedy, and greedy when others are fearful.
Almost every investor quotes it. Almost nobody actually does it because doing it requires buying the stocks that everyone else has given up on right at the moment they look the most broken. Right now, the market is greedy on AI and fearful on everything else. And Burry, across six separate buys in just a few weeks, is being aggressively greedy in exactly the places where fear has overshot reality.
Look at the backdrop he's buying into. The S&P 500 just hit a record high of around 7,100 points. Capital is flooding into chip stocks, AI infrastructure, and momentum names. Meanwhile, payment stocks are down 80%. Specialty retail is down 50%. Healthcare is hated. Distressed mortgage paper has been left for dead for almost two decades.
This is exactly the divergence Buffett was talking about. The crowd is concentrated in one corner of the market. The other corner is on sale. Burry himself described his framework for this moment. He told his subscribers that markets do not make needle tops, meaning the AI rally probably does not end tomorrow.
So why is he buying value stocks now instead of waiting for the crash? Because the discounts already exist. PayPal is already 84% off its highs. Sprouts is already 60% off. Molina is hated to the point that only three of 19 analysts will touch it. The crash already happened in these names. He is buying the wreckage now, not waiting for it.
There is a pattern that repeats across decades of market history. The biggest fortunes are not made by predicting the top of the bull market. They are made by accumulating quality companies during the years when nobody wants them, holding through the eventual recovery, and selling into the next wave of greed.
Buffett built his career on it. So did John Templeton. So did Howard Marks. Burry is doing exactly that in real time in front of his subscribers. Five years from now, most investors will look back at this moment and remember that they were chasing AI while a small group quietly accumulated the stocks the market had thrown away.
That small group will have built generational wealth. The crowd will have a story about how they almost bought PayPal at $49. The only question is which group you choose to be in.
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