In a surprising move, renowned investor Michael Burry has unveiled his latest portfolio, signaling his confidence in distressed US regional bank stocks. Burry, best known for his successful bet against the 2007 mortgage bond market, is once again making waves in the investment community with his strategic choices.
As the US regional banking crisis continues to get worse, his selection displays some hope. Read on for some interesting insights!
A bet on Sinking boats?
The US banking crisis has underscored the disparity between Wall Street giants and smaller banks, with Silicon Valley Bank and Signature Bank being hit the hardest. This turmoil has created a climate of fear and uncertainty among investors. However, Burry, known for his contrarian approach, sees opportunity where others see risk. He believes that this crisis presents a unique buying opportunity, as the stocks of these distressed banks trade at their lowest levels.
According to his annual shareholder report, he has strategically invested in a range of distressed banks, including New York Community Bancorp, Capital One, Wells Fargo, Western Alliance Bancorp, Huntington Bancshares, PacWest, and First Republic Bank.
Additionally, his portfolio includes major holdings in JD.com and Alibaba Group.
Like Jerome Powell said earlier these banks heavily depend on big shots to invest while most of the top-rated US banks are still healthy, despite the slump.
Another Market Bottom On The Horizon?
Drawing parallels to his famous short position against the 2007 mortgage bond market, Burry has indicated that he envisions a similar scenario unfolding in March 2023. This prediction has garnered attention and piqued the interest of market observers who closely follow his investment moves.