Big Short Michael Burry sells out his portfolio due to recession concerns

Michael Burry – the famous investor known for predicting the housing crisis of 2008 – sold most of his investment portfolio in Q1 to focus on a single stock: cosmetics company Estée Lauder.

According to the latest legal documents from Scion Asset Management, Burry's investment company, the current portfolio now only holds shares of Estée Lauder. This is a surprising move as it is unrelated to technology or artificial intelligence – sectors that are currently "hot."

In addition, Scion has also purchased put options ( on major companies like Nvidia, Alibaba, JD.com, and Baidu – indicating that Burry is predicting an escalation in the trade war and risks from Chinese tech stocks.

Betting on Estée Lauder leads analysts to believe that Burry is anticipating an upcoming recession. This could be evidence of the "lipstick index" )lipstick index( – a hypothesis suggesting that consumers will turn to small luxury items such as cosmetics during tough economic times.

However, this index is often controversial and is considered unreliable by some experts.

Notably, in May 2024, Burry invested 10 million USD in gold through the Sprott Physical Gold Trust – a move to anticipate the strong price increase of gold this year.