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Hello friends, Vagli investors, Michael Burry bought a lot of shares in the last quarter of 2023 and when it comes to analyzing the portfolios of super investors, Burry's will certainly not be to everyone's liking but it is certainly the most interesting to look at because it has an enterprising portfolio and makes some quite original operations, let's say for a super investor some would say questionable and in this video I want to share with you the most interesting movements of his portfolio before starting but it is better to frame Michael Burry's investment style otherwise we will struggle to understand the meaning of his operations.
So Michael Burry is a Value investor and to be more precise he is a Bangr Value investor In the sense that he puts the price first in choosing the shares to buy, the only thing he is interested in is buying undervalued shares and the more undervalued they are, the better Michael is so focused on the price that just like Gram sometimes buys companies that are not exactly the best in terms of quality, the so-called Sigar Bat companies that are in great difficulty and are almost at risk of bankruptcy, sometimes as happened with some American Regional Banks that he bought last year and then went bankrupt.
Anyway It's not that he only buys companies in difficulty like We'll see shortly, he also bought a few of the magnificent seven that he probably thinks are undervalued. In any case, he is an absolute contrarian, he loves to buy things that others wouldn't even touch with a 10-meter stick, sometimes it goes well for him and sometimes it goes badly, but there's a difference in grams, however, Barry has a gambling habit, he likes to bet, he likes to speculate.
In fact, he became famous precisely with a bet: the short of the American real estate market in 2008, then since then he has shattered the market many other times and it almost always went badly for him and recently another short that went badly for him is the one he started last year on semiconductor ETFs which, as we know, semiconductor stocks with Nvidia at the forefront have done great in the last year, so it's likely that Michael has lost a lot of money on this speculation, but even when he does, he always does it because he does a fundamental analysis of the companies, in this case the companies that make up the semiconductor index like Nvidia, AMD, Supermicro, etc.
The problem with the short, however, is that even if he was right, that is, even if these companies were actually overvalued, the market can remain irrational for a long time and make you lose a lot of money. But now let's move on to look at Burry's portfolio, but we won't do it from the usual dataroma.com site because there we only find the declared movements of the 13 CFs.
That is, on the shares listed in America, we will instead see it from the ticker terminal. Where we also find non-American shares in his portfolio and, as you can see, to the great surprise of many, I believe they are in the top positions. There are companies that are quite hated by the market. In first and second place are two tobacco companies: British American Tobacco, which he bought in Q4 for the first time, and Imperial Brands, which he already had in his portfolio but increased a lot in Q4.
These are companies that are absolutely hated by the market, as you can see. British is a stock that has been dropped by many shareholders in the last year. As you can see, it has had a nice crash, but in reality, this stock has probably been doing badly for 10 years. However, Barry thinks that the market is excessively pessimistic about this stock because it has a nice free cash flow yield of 19% and pays a dividend yield of almost 10%.
and the same thing happened for Imperial Brands, a stock dumped by the market and now with a P of just six, but still this one too. A nice free cash flow yield of 17% and an 88% dividend yield for both. The problem is the uncertainties for the future of the tobacco sector which is seen as declining and Barry is likely to think that these are excessive concerns on the part of the market and the same goes for the companies that are in third and fourth place in his portfolio, namely Alibaba and jd.com which he increased both aggressively in Q4.
Investors have fled away from China in the last year and instead Barry has been in it for a few quarters. He always does the opposite of the others. Alibaba and jd are quality companies, they are not cigarettes. Bat, that is, companies that are almost about to fail but are trading at very low multiples also due to the uncertainties and fears about China and political and geopolitical risks such as Baba has a Price to free cash flow Forward of just 7 and jd of 9.
These are classic Barry situations, but this does not mean that he will hold them for 5-10 years. He simply considers these shares to be undervalued compared to the their intrinsic value and will sell them when it reaches it or in any case when he has reached his target profit. So depending on how the share price moves, you might not even see them in his portfolio as early as next quarter.
Then we have HCA Healthcare, which manages hospitals for even delicate treatments in the United States. In this case too, we have a company that from the numbers does not seem to be in difficulty. It is a good company with low valuations. But consider that in recent months it has made a good increase, so it may be that Barry has already sold it and taken home a profit.
Then we have Oracle, companies that many of you will know. It is certainly a quality company with excellent profit margins but perhaps a little snubbed by the market because it trades at significantly lower multiples than other companies in the sector. Maybe it deserves it. But maybe these multiples shouldn't be so low.
Then he bought City Group in Q4 2023 and in this case too. It may be that he has already sold because the stock has risen a lot. He also recently bought CVS, an interesting company that operates in the pharmacy and health insurance sector in the United States. I even made a video about it. Some time ago I said it was a good company.
on the pharmacies side But not knowing the insurance sector well I passed it and if I have to tell the whole truth I also realized that the pharmacy sector in the United States is really very competitive. However in Q4 2023 it had very low multiples Pie below 10 now it has risen a bit I don't know if he could have already sold it Nextar Media Group is an old acquaintance of Barry In the sense that he has already betrayed it several times in recent years it is an American television station company in reality in Q4 2023 Barry reduced his position in this company it is a good company the margins are very good he will have reduced it Because the price went up in Q4 then he bought Alfabet in Q4 one of the magnificent seven probably He thinks that in the price there is still some value I also think that among the 7 it is the one a little more unfairly snubbed in my opinion we then have Starb Carres reduced the position in Q4 in this company which is among the world leaders in Shipping probably did so because it went up a lot and being a company very influenced by the macro situation Barry is very good at reading these dynamics These are his companies and then in Q4 he bought Amazon needless to say it is an excellent company and R probably thinks it is still a good deal at the price of Q4 Maybe he has already sold this one too since it has risen a bit recently we will see he then bought MGM Resort a company that operates in the hotel and casino sector in the United States and in Macau it also seems that this is a good company at a good price nothing special in my opinion maybe when he bought it but it was a good company at an excellent price since the stock has risen quite a bit then we have booking the leading travel portal which is an excellent company on this there is no doubt However he reduced the position in Q4 Burry in fact it has risen quite a bit but in my opinion the price of Booking is still good i.e.
it is not overvalued because this is a company that is growing well at excellent margins it is a roik Altissimo really a good company at a good price he then bought Advance auto parts an American chain of stores of spare parts for cars what is good about this company is that it does a very aggressive buyback but I don't think it is a company high quality In fact even in the long term the stock market performance has been quite poor but it is likely that Barry considers it undervalued even if it is not a large company.
Then as we go down the weight of each position in the portfolio is reduced we have increasingly smaller positions. We have some companies that are a little riskier Block which is not a bad company but still not profitable dilutes too much for my tastes. And then there are other companies that are in difficulty but probably Bar considers them undervalued like Warner Bros.
Gen Restaurants Big Lots etc. and among those that he sold in Q4 completely as positions Stellantis stands out which was also a good position in his portfolio and he sold Vuto clearly because it made an excellent gain on it. Cyclical stock that he knows how to read well, I don't at all. Well this was his portfolio Barry's style is this Buy Low Sell High I prefer less stock I wouldn't be able to invest How he does it is too stressful for me but as you can see you can like it or not his style remains great because in the last 10 years it has made almost 200% and has more than doubled in the last 5 years in the last three instead it hasn't gone good but 3 years are too few to judge the performance of a portfolio and Barry is a super investor that we have mentioned several times in our Value Investor Circle discord group along with many others.
We have a section dedicated to their philosophy, their books, videos, articles, their portfolios, etc. so really a lot of content and if you are interested in studying and being updated on the movements of super investors Store you can do so by joining the group. Just support me with a small donation on Patreon to get access.
Link in description. Let me know what you think of Burry's portfolio. Like the video if you liked it and see you next time. Bye from Davide
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