원문 보기
Michael Barry just revealed what mainstream media is calling a massive bet against the stock market but in reality there's a bit more to it than that Barry who has been radio silenced is deleting his Twitter account earlier this year has just released his q213f filing and in it we see two notable options vets against the stock market on first glance it reads that he's opened two massive put option positions against both the S P 500 and the NASDAQ 100 worth 887 million and 739 million dollars respectively and although this is a bet against the market the truth is the media and the Twitter Community have really blown this one up much bigger than it deserves to be because in reality his bet is probably reasonably small certainly nowhere near as large what the headlines are suggesting you see put options keep the holder the right to sell shares at a predetermined price called the strike price thus if I bought a put option with a strike price of ten dollars I would want the share price to fall below 10 because then I can buy the share doesn't open market for less and sell them to the investor that wrote me the put option for ten dollars the share price fell to six dollars I have the right to sell to this investor for 10 and I pocket four that is exactly what Michael Barry has done with the S P 500 and the NASDAQ 100 he's bought put options off another investor and to make money he needs the value of those ETFs to fall below his strike price but here's the thing he has not bet over 1.6 billion dollars on these indices falling this number represents the total market value of the number of shares he bought put options against in reality put option contracts cost a heck of a lot less to purchase than the stock itself so no he's definitely not made a 1.6 billion dollar bet against the market his 13f confirmed he bought put options against four million shares 2 million each against spy and QQQ which means in total he's bought 40 000 put option contracts as each option contract represents 100 shares but here's the thing if we log on to Yahoo finance and look at the put option contracts with expiry dates roughly a month from now depending on the strike price we see like a cost of 30 cents per share a dollar per share six dollars per share that's a lot lower than the share price of spy which is currently sitting around 450 dollars per share so with that said how much did Michael Barry bet against the market well unfortunately the reality is we simply don't know the reason we don't know is because the only thing that gets reported is how many option contracts he ended up buying and whether they were puts or calls what we don't get is information around what the strike prices were or even the expiry dates and without getting too into the weeds those two factors greatly influence the price the put option will cost to buy the closer the strike price is to the current share price the more the option will cost because it's more likely to work out in the buyer's favor before the expiration date and along that same line of thinking the longer the options expiry date the more the option will cost because there's more time for the conditions to come to fruition so with this in mind Michael Barry could have done a range of things he could have spent a small amount of money making a bet that the market will fall a lot or he could have made a much larger trade betting that the market will fall a little or of course there's nothing to stop him from doing a mix and on top of that we don't even know what time frame he's betting on it happening unfortunately when it comes to options reported in the 13f there's simply not enough data given to us for us to conclude anything beyond the fact that Michael Barry is indeed making some sort of bet where he'll make money if the S P 500 and the NASDAQ 100 fall in value and here's the other thing as is usually the case with Michael Barry it's hard to take away any strong conclusions from his 13f because he's proven time and time again that while he has the brain of a value investor he does like to make short-term trades he isn't the same Buy and Hold investor like a Warren Buffett or a Charlie Munger in fact he dances in and out of the market so much that because the 13fs get held for 45 days after the end of the quarter we can't even be sure he still holds these put option positions it very well could be the case that he's already sold out of them and moved on to something else and the same goes with the changes he's made to his Equity portfolio so with that said let's now talk about that Equity portfolio and this is where the plot what thickens because while he's betting that the S P 500 and the NASDAQ 100 will fall he's also gone ahead and added a lot of individual stocks to his portfolio so make sense to that he added 25 new stocks added to three existing positions then he reduced three positions and he sold out of 15.
that is quite the portfolio turnover and if you notice he's got almost the exact amount invested at the end of Q2 versus the end of q1 so he's literally just subbed out a whole bunch of names and subbed in others it very much looks like a Trader's portfolio right and I've made this point before but I'll make it again look at Warren Buffett's 13f history look at how consistent that is he's obviously a long-term investor right now look at Michael Murray's notice something it's all over the place the only consistent thing there is inconsistency so take it all with a grain of salt but with that said why would Michael Barry seemingly contradict himself in the same 13f filing he's bought 20 25 new stocks at the same time as betting the stock market is going to fall now this one stopped me for a while until Hamish reminded me about the composition of the S P 500 and the NASDAQ 100 look at the weight of both of these indices side by side notice the biggest Holdings both of them Apple Microsoft Amazon Nvidia meta Google Tesla these seven businesses are what's now being called The Magnificent Seven why because they are responsible for a very large portion of the s p 500's rally across 2023 and it all boils down to speculative hype around those big buzzwords artificial intelligence so I think in the case of Michael Murray's portfolio what he's really doing is making a short-term bet that this stock market hype caused by AI isn't going to last and if these seven stocks run out of steam because they hold literally 27 of the weight of the S P 500 they could drag the entire market and particularly the NASDAQ 100 down but then on the flip side he's still finding individual opportunities out there hence he's added those 25 stocks to his portfolio but with that said what did Michael Barry do with his portfolio in Q2 2023 well the first big follow-up from q1 is that he decided to exit the Chinese tech stocks he held that of course being Alibaba and jd.com these two stocks comprise 20 of Scion's U.S stock portfolio at the end of q1 and they are actually his top two largest positions at the time I speculated that there was actually decent potential for these positions to stick around as both stocks had managed to stick around in the portfolio across multiple quarters and he did have prior dealings with both but well that clearly was not to be right he likely would have still made money on this bet though JD would have most likely been roughly break even for him as it was sitting around its 2022 low price in the second quarter and on the Alibaba front it's likely he made a good chunk of change with the shares Rising as much as 60 percent higher from their Q4 low in Q2 so that seems to be it for the Chinese tech stocks and another story we saw from his sales was that he closed out his position in the U.S Regional Banks of course we know the U.S Regional Bank stocks got absolutely crushed earlier this year as we saw a few dominoes start to fall thanks to depositors withdrawing funds but there's no doubt this caused a lot of fear in Bank shares fear that Michael Barry took advantage of but with the unpredictable and volatile nature of Bank runs he didn't just make a bet on one or two Regional Banks he made a basket bet on a few those names included Pac West First Republic Huntington Bank shares New York Community Bancorp and Western Alliance Smart in theory although it looks as though his results would have been fairly mixed on this bet of course we know First Republic definitely didn't work out but he also would have likely lost money on Hunting to bank shares while likely being roughly break even on Western Alliance and probably making money on pacwest and New York Community Bank so definitely a mixed bag but he has decided to wrap that up and move on and with that said there were also a few notable buys this quarter as well notably Barry bought into two travel related businesses that being Expedia and MGM Resorts International Expedia operates a few different online travel Brands including Expedia obviously as well as hotels.com verbo orbits Travelocity ebookers and what if and interestingly Expedia is now the largest holding in virus portfolio at 9.82 worth around 11 million dollars he also bought MGM Resorts International which is a global gaming and entertainment company that owns 17 us-based casinos has a 56 stake in MGM China and owns online gambling site Leo Vegas I mean if you've ever been to Vegas chances are you've donated more than a few dollars to MGM Resorts then beyond these two businesses Barry also made significant investments in Charter Communications Generac Holdings and CVS health and one note that I picked up from unrivaled investing's recent video on Michael Barry's 13f is that many of these businesses trade at really quite low price to free cash flow multiple so it shows you that Michael Barry is still very much in that value mindset albeit being a very short-term focused investor Expedia and CVS both have price to free cash flow multiples of seven Charters at ten they're going down the list further you also have stalantis at five vital energy at four Warner Brothers at nine as is the case with Michael Barry why he might be a little bit too much of a short-term focused investor for my liking he still does have that classic value mentality and a lot of these stocks are what you would call classically quite cheap but of course as I said earlier I don't think there's too much more we can take away from this information besides maybe using it as a bit of an ideas list for some businesses that could be worthless looking into ourselves but with that said guys that is Michael Barry's 13f filing for or Q2 definitely let me know what you think down in the comments section below if you like this video please leave a like on it and subscribe if you'd like to see more but with that said I'll see you guys in the next video
Comments 0