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Michael Burry is now long this one stock ‘only’

Michael Burry is now long this one stock ‘only’

A 23% rebound in the Nasdaq Composite is still a bear market rally and the worst is yet to come, says Michael Burry. He’s the “Big Short” investor who betted against the U.S. housing market in `08.

Scion Asset Management is now 98% in cash

On Tuesday, Burry revealed to have pulled out of every stock he held except one, Geo Group Inc (NYSE: GEO) – a Florida-based company that invests in private prisons and mental health facilities.

Per the SEC filing, his hedge fund Scion Asset Management is now 98% in cash. The remaining is comprised of 500,000 shares of “GEO” worth $3.30 million. Earlier in August, the real estate investment trust reported better-than-expected revenue for its fiscal Q2.

The news sent Geo Group Inc up 5.0% today. Burry’s view is in line with Wall Street that sees upside in this stock to $13 on average; about a 65% increase from here.

Burry warns the market has not bottomed yet

“IXIC” has now retraced more than half of its year-to-date loss that’s usually read as a sign that the trend is shifting in favour of the bulls. Burry, however, disagrees with that notion. His recent tweet reads:

Nasdaq now up 23% off its low. Congratulations, we now have the average bear market rally. Across 26 bear market rallies, the average is 23%. After 2000, there were two 40%+ bear market rallies and one 50%+ before the market bottomed.

U.S. consumer debt is currently expanding by $40 billion per month versus its historical average of $28 billion. That, as per the hedge fund manager, will eventually weigh on “profits” and trigger the next leg down in stocks.  

The post Michael Burry is now long this one stock ‘only’ appeared first on Invezz.