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Hey, welcome back to Two Guys Trade Stocks. I'm Dylan. I'm Vinnie. And Michael Burry made some very interesting position changes. We're going to look at one that I actually think could be a decent long. I've I've never looked at it before, but it's actually kind of interesting. He also he dropped in how he's doing on his shorts.
Which previously when he was a hedge fund manager, we didn't really get to know because there's rules about that. They have to come on 13 apps, but then it's options, so you don't really know what happens. So, um he actually said what's happening. So, it's pretty cool. We're going to We're going to take a look here.
Um he also preferences it with no one should ever short. It's kind of funny. No one should ever short, but I have to. This is his direct quote cuz of his, you know, he's going with his analysis. So, first let's just get some longs that he he changed. So, he increased a small stake in Birkenstock to a 5.2% position as a stock fell to $35.
So, that's about down here. Um do you wear Birkenstocks? No, like are they like the hippie shoe company? It's No, they're not hip Well, I get Well, maybe actually now that I think about it. I mean, I think that there's other different Herpkinsh I don't know. Yeah. They're They're like really hard sandals that actually are kind of comfortable, but they don't look comfortable.
Um I don't know enough about them. I did think it was interesting. This was a real interesting one. This and the next one. Uh I took a new long full position. Now, his definition of full position is usually between 5 to 10%. Okay, so his his starting a new is usually under five. So, he just has these definitions that he goes by, but between 5 and 10% is what we can assume in Build-A-Bear Workshop.
Uh in the upper mid-30s. That that thing that's always in the mall. Which I feel like when I was in like seventh grade, that was like always the go-to present for like buying like a girlfriend or something when you're in middle school. That was it. Yeah. Um yeah, they I did not realize that they were chilling at like $75 in in January, but they definitely took a pretty massive hit.
Um looks like he just entered. So, this would be something to look at to see if it suits. Uh frankly, I'm not a huge fan on buying stuff under the 200-day moving average, which is this this blue line here because there's too many times where it can just take multiple legs lower. Yes, if you time it perfectly, which I mean, that's a lot of ifs, then yes, you would make more money, but you can also just like wait till it recovers it and forms a base.
Little bit safer. I just want to know what he means when he says yet misunderstood business. I really want to him to elaborate that on that. How is it misunderstood? Yeah, well, cuz they just, you know, they just sell bears. I don't know. Um speaking of I don't know, uh bought the pink sheets TPLWF listing of Temple and Webster in the low $3 last few days.
Um this is a large position. I believe it's 9%. I have this in a later slide. So, he went ham on this pink sheet stock. This was probably one of the more ballsier plays I've seen him do cuz these companies are terrifying in I in my humble opinion. Again, I don't know enough about this one, but I I would never buy it pre- I don't even have the ability to look at it in Robinhood.
So, yeah, this is this was interesting. It's more the position sizing that's pretty crazy, which I'm going to show you. I have the position sizing of all of the stocks. So, this is the most interesting one to me. So, like I does your do you guys have Sprouts? No, I've I've heard of them, but I've never never been to them.
So, like my wife goes there constantly. It's it's it's like one of those like Target, right? Um well, it's not. It's like Target for for nice food. Um so he added Sprouts Farmers Market in the high 70s taking it to a full 5.2% position. Private equity has been sniffing around this one. The story is relatively simple and the current valuation is not likely to hang around for too long.
Now, as I said earlier, I do not like buying stocks under the 200 moving average. The reason being, here's your 200 daily moving average. Let's say you buy here and you won't hesitate. You're like, "Hey, heck yes. Time for the turnaround." You're going to be real upset on the way down here. Or hey, we had a little bit of an upswing.
Oh dear god, right? But once this catches up and you have almost a base forming, this is where I get the most interested in taking a long position. I will be doing a video on this next week. Um on if I'm going to take a long position on this one. This is exactly the kind that I like. Um It for me, I just buying under the 200 moving average is it just seems like a gamble.
I know all this is a little bit gambling cuz you can never know, but it just seems like a stupid gamble cuz I there's just there's nothing to prop, right? Yeah. Um His total longs Now there's there's more than just this, but Temple Webster 9%, Veev 4.8%. He did announce he sold some shares. He is not planning to decrease it further.
Um Mercado Libre 12%, PayPal 4% after selling more shares, Molina Healthcare 9%, Lululemon is his largest long position. Yoga pants. Talking about it. don't want to touch this one. I know I I see his thesis on it. I disagree with it a little bit. Um His he literally said and I quote, "I don't see Vuori, which is a very big upcoming brand, as taking any clients away from Lululemon." I cannot tell you I it's directly taking clients.
That's who they're taking clients from. So I don't like all of my friend my that's that's where we they were Lululemon and then it's it's Viori instead. It's just better. So, I don't I don't get that argument. I'm going to step out. I don't know enough about it, but that one argument did not make any sense to me.
Interesting. Yeah. Also, the fact that Costco was able to literally copy them and sell it for like $8 a pair. I don't like that at all. I don't want to touch this. Yeah. I know they were sued for it, but I don't know how that's going to go. I I don't I don't know. Um Sprouts 5%. I'm going to pronounce this wrong.
Zoetis unknown, but at in the '70s. Now, his total list of longs I didn't want to list the percentages for some of these other ones like Baba or JD because the price has changed from when he last like when he said Baba was I don't know 7% or whatever it was. That was at a certain price. So, I I have no idea what it is now.
Yeah. Well, he doesn't own any Baba now anymore. I think he did a uh we call it gain loss harvest and switched into JD if I'm not mistaken. Um Tax loss harvest. Yes. Yeah. Yeah, he he he did a tax loss harvesting for JD which ended up being a bad call cuz if you look at when he did that JD versus Baba did not go well.
But, uh correct. So, JD it's it's higher, but I have no idea. So, here you have these are all from from Fannie Mae to Melina minimum 5%. And then from down here Sprouts Tencent these Chinese companies are under 5%. All right? Um with the exception of PayPal he he just changed to 4% cuz he he took some stuff.
And then Lululemon obviously that's his his biggest one, but let's talk about his shorts. So, he is significantly short. Total shorts not including puts are a little over 21% of his portfolio. Oh. His puts are 6.5%. So, that puts him at 27.5% of his portfolio. Fair. okay? Yeah. He shorted more stocks and added to his PLTR short.
And then, he added a short to Coreweave and increased the size of Micron. There's a caveat here, which I'm going to talk about. So, [snorts] yeah, his puts are at 6.5% of his portfolio. They're spanning Nvidia, Palantir, the Qs. Um he rolled them over, so they're all expiring in 2027 with the exception of Palantir, but he's already taken a decent amount of profit from that one.
Um he's a little bit over margined than he usually does. So, he's I'm now at mid to high teens percent margin. Uh function of large short positions given some leeway for a larger long book. I'm going to try to bring that back down to 0 to 10%. And then, the same warning I repeat about short selling also applies to margin.
As a hedge fund manager for most of the last 26 years, I work with margin and short sales very naturally. I know what my risks are. He puts this caveat. The vast majority of people should never short, and likewise should never be on margin. Highly agree. I'll like puts and shorting are different. Shorting seems I I'm not I will never touch it cuz you could technically lose unlimited amount of money.
And then, margin, I made that mistake 2022. That's how you learn. That's how you learn, baby. Um yeah, so it he always has this thing in here, which I I think is pretty funny. As I've mentioned, I would never recommend my kids use margin, short stocks, or become hedge fund managers. Now, It's not wrong.
what happened August 13th, okay? Let me move my face. He actually ended his Tesla and his AMAT short for a gain. Um [snorts] This is his his note, and this is where we find out about how he's doing. So, today is the day that happens on occasion in life of someone who sells short. I am now at a place where roughly overall, um I I've been roughly break-even on my shorts.
That's with his PLTR short making massive amounts of cash. Right? He He shorted PLTR when it was crazy high, and it has gone it down at least 50% from where he was holding. So, he's roughly break-even, uh but the situation is starting to tip into the loss position. So, he's choosing to d- This is of August 13th, um de-grill certain parts.
So, he's sold his puts on SOX, and then this week, so he's This was August 13th, on August 21st, he then shorted his shares. He's a shorting the SOX. He's just not doing puts. So, it's the same analysis. He's just changing the vehicle, if you will. Um the implied volatility stayed stubbornly high, protecting the value to an extent thus far, but on a further rally, I imagine I would get doubly burned by lower implied vol as well as adverse price action in the underlying.
So, it is interesting that it it seemed like he had really made a ton of money based off of his PLTR short. His Tesla short was very successful, um but he's actually break-even just cuz he's just probably just hemorrhaging theta on Nvidia and and a couple others. The theta decay is is literally crossed out those gains, and I have to assume the PLTR gains were massive.
Because he shorted almost at the He shorted almost perfectly. Yeah. So, it is It's interesting. Yeah, it's one of the tough things with options is you can be completely right in your analysis of a company, the direction of the movement, the magnitude of the movement, but you may be completely wrong in the timing of the movement, and that may be all that mattered.
Like it's tough. That's why I play with options is challenging for sure. Yeah, and that's why like I don't like just just naked shorting like he does. It's just balls of steel. I don't That's scary. I don't like that at all. All right, let me know what you guys think. I am going to take a look at Sprouts cuz Sprouts is more a business I'm familiar with and more importantly on the chart where I would look at buying it. So All right, guys. Catch you on the next one.
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