Michael Burry doubled his stake in $EL Estée Lauder while dumping everything else

Why bet big on a struggling cosmetics giant during a shaky market?

Here’s the full breakdown 🧵 Deep Value Play: EL is down over 55% from 2021 highs.

    •    Peak: $375
    •    Current: ~$162
    •    P/E: ~55 today vs. 90+ in 2021
    •    PEG: 1.9 (undervalued vs. peers like L’Oréal ~2.6)

Wall Street has priced in too much pain. That’s where Burry thrives.

LFG

Burry trackers got a win on their hands

$BABA is now up +60% in the past week after reporting a huge earnings beat this morning

🧵 Here's the full breakdown: 1/ Alibaba $BABA crushed earnings

• +8% revenue growth to $38.4B, beating estimates
• Net income hit $6.7B (17% margin)
• Gross profit $16.1B (42% margin)
• EPS rose 13% YoY to $2.93

Here's the segment highlights (cont.)

A startup hedge fund with no human analysts is beating the stock market using only AI

Minotaur Capital — a Sydney-based startup is using AI to replace analysts, slashing costs, and doubling the market’s returns in the past 6 months

Here’s how they’re doing it 👇 1/ Minotaur Capital was founded by Armina Rosenberg (@ArmsRosenberg) and Thomas Rice (@thomasrice_au)

Rosenberg once managed a global equities portfolio for a tech billionaire & led JPMorgan’s small-company research at 25

Rice is a former Perpetual Ltd. portfolio manager & algorithm enthusiast

In the last year alone, gold is up almost +40%

A move we haven't seen in years

There's a specific reason why: There are 3 specific time periods in which gold saw incredible gains

1979-1980: Geopolitical tensions (Iranian Revolution), gold gained nearly +300%

2007-2011: The 2008 financial crisis triggered a massive rally from ~$650/oz in mid-2007 to over $1,900 in Sept. 2011

2019-2020: COVID-19 drove prices from ~$1,500 in mid-2019 to $2,075 in Aug. 2020

LFG

$BABA ended the day over +6.7%

Why?

It was just announced that Alibaba's AI model Qwen2.5-Max might be giving DeepSeek a run for its money

Here's the rundown: Yesterday Alibaba announced some massive updates to their AI model Qwen2.5-Max

Per Qwen team’s benchmarking, the best Qwen2.5-VL model beats OpenAI’s GPT-4o, Anthropic’s Claude 3.5 Sonnet, & Google’s Gemini 2.0 Flash on a range of video understanding, math, doc analysis, & QA evaluations

BREAKING 🚨:

Billionaire hedge fund manager Ray Dalio, founder of Bridgewater Associates, just warned that the UK could be heading for a “debt death spiral”

This is in which the UK has to borrow more and more money to service its rising interest costs

Here's why: The UK’s annual interest payments on debt are already very high - over £100B a year

On top of this, when old debt needs to be renewed, it will be replaced by new debt with higher interest rates because borrowing costs have gone up

This could lead to difficult choices:

- borrow more money
- cut government spending
- raise taxes

Fed cut interest rates and 30 yr. fixed mortgage rates flew back up to 7% in an instant

Since the Fed started lowering rates in September, 30 yr. rates have flown from 6.1% to 6.7%

🧵 It's likely only going to get worse and here's why: 1. The thought is the Fed could make homes more affordable by cutting interest rates

So far, mortgage rates are doing opposite, and rising instead

Why? Because mortgage rates move with the yield on the 10-year Treasury, which has surged this week

In 2000 a relatively unknown proprietary trading firm was founded - Jane Street Capital

Last year was the fourth straight year Jane Street generated net trading revenues of more than $10 Billion, comfortably beating Goldman Sachs and many others

🧵 Here's how they did it 1/ Backstory

Jane Street was co-founded by Tim Reynolds, Rob Granieri, Marc Gerstein, and Michael Jenkins

Reynolds, Granieri, and Jenkins were formerly traders at Susquehanna International Group

Reynolds left the firm in 2012

Peter Lynch is widely regarded as one of the best fund managers in history

From 1977 to 1990 he had an average rate of return of 29.2% year over year

A 🧵 on how the legend did it ... 1/ Lynch worked as the manager of the Magellan Fund for Fidelity during his 13-year tenure

If you put $10,000 into this fund in 1977 and held till 1990 you would be sitting with $279,519.86, in just 13 years (minus maintenance fees/taxes)

But how did he get these returns?

A list of the top 9 highest earning hedge fund managers in 2023

Included is each fund's top 3 current stock holdings

🧵 This is a thread you won't want to miss... #1 Isreal Englander - Millennium Management

2023 Earnings: $2.8 Billion

Current top 3 holdings:

Apple $AAPL, Nvidia $NVDA, Microsoft $MSFT

Bill Ackman is having a wonderful Monday morning

Over a decade ago, Ackman and Carl Icahn went to war on CNBC and have been enemies ever since

Today Icahn was charged by the SEC with hiding billions of dollars worth of stock pledges

🧵 But their feud didn't start there ... 1/ Before the CNBC incident, Icahn and Ackman had a dispute in 2003 over a deal involving Hallwood Realty

Ackman felt that Icahn had not honored an agreement

This led to a legal battle, which Icahn eventually lost, having to pay Ackman about $9 million

Burry shockingly sold out of all his Gold

He is now heavily bullish on the consumer, strength of the dollar, China, and the US Job Market

We think we have a good reason why he changed his mind on the US economy…

🧵 A thread worth reading below 1/ Burry just exited his Sprott Physical Gold Trust $PHYS position

Over the past 6 months $PHYS has had a healthy 23% gain

Traditionally an investment in gold is a hedge against inflation - Burry might be showing new belief in the dollar by exiting this position

Grab a cup of coffee, you won't want to miss this

Many are speculating that this week's sell off in the market is due to Bank of Japan's unexpected large interest rate hike which led to a massive unwinding of the yen carry trade

Let's breakdown exactly happened 🧵: 1/ First, what is a carry trade?

An investor borrows money at a low interest rate in one currency and uses it to invest in assets that offer a higher return in another currency

The goal: To profit from the difference between the borrowing cost and the return on investment

If Mark Spitznagel talks, you listen

He's the founder of Universa Investments, a hedge fund world renowned for “black swan” investing

Spitznagel has made billions from past crashes and even made $1 B in a single day from the 2018 flash crash

Here's what he's predicting now ⬇️ Spitznagel predicts that this rally will only continue for a couple more months because we are in a “Goldilocks phase” as inflation falls and the Fed easing fuels bets on further gains

He goes on to say that rate cuts are often the starting gun for big market reversals

cont.

Alibaba, Burry's 5th largest holdings, announced they will be splitting into 6 separate units

The stock popped 15% due to the sum in parts valuation method

With $BABA 5% below the price when Burry filed back on 3/24

Here's a quick report on where it can go from here🫡 $BABA is a beaten down Chinese tech company that has been called the Amazon of China

Legendary investor Charlie Munger has been purchasing Alibaba for The Daily Journal’s portfolio

And if you think the Chinese concerns are overblown, it likely has tremendous value & upside

On 3/17 Burry tweeted this chart & 2 days later banks fell another 15%

Yesterday he then tweeted "Hope that chart helped"

Since he doesn't love to provide context, we wrote up an analysis on it

TLDR: It's a financial map of which banks have the best risk vs reward post crisis To provide context, here is the full tweet sent on 3/17

"This is a good chart/guide"

Yesterday Burry reactivated his Twitter and shared this chart with the words "This time is different"

Many people asked what it meant. The TLDR?

A pivot by the Fed and a decrease in Interest Rates not automatically mean an increase in stock prices👇 The chart compares the $SPY to the Fed Fund Rate during the Dot Com Bubble

As seen above, both the yellow line and white line are decreasing from 2001 to 2002

Meaning, while the Fed in '01 cut interest rates to spur the economy, asset prices continued to decline

Why did Burry buy 5M shares of $QRTEA, an ex Wall Street Darling, that has fallen 80% YTD?

Coupled with a brand new management team, an EV/EBITDA ratio of only 2.95x, and the Cash Flows to come

$QRTEA has the potential to become Burry's next gem 🧵 Qurate Retail, Inc. engages in the business of video and online commerce industries

You've probably heard of them via their popular QVC distribution channels

Burry began loading up on the stock in the $1.70 range which is where the stock is right now

Florida has pulled $2B worth of assets from Blackrock due to their ESG policies, the largest anti-ESG divestment ever

To date, $3.7 Billion Dollars have officially been divested from Blackrock due to ESG concerns Breakdown of the other states & their divestments:

Texas - N/A
Louisiana - $794M
Missouri - $500M
South Carolina - $200M
Arkansas - $125M
Utah - $100M

People keep asking why Burry invested 35% of his portfolio in private prison operator $GEO

Prisons are one of the greatest real estate opportunities in today's market & $GEO has a monopoly on them all

Pair that w/ immigrant trackers, they print pure cash

Here's how 👇👇👇 First let's dig into the current valuation of $GEO

At a share price of $9.51, $GEO has:

Market cap - $1.1B
Debt - $2.5B
Cash - $91M

Giving the company an enterprise value of $3.0 billion, You're pretty much buying $GEO for $3B

Breaking 🚨:

Michael Burry is back buying stocks again

In Q3 he purchased more $GEO and made new buys of $QRTEA, $CXW $AJRD, $CHTR, & $LILAK

His portfolio is now over 50% in prison stocks Here is his new allocation:

$GEO 37%
$QRTEA 24%
$CXW 16%
$AJRD 12%
$CHTR 7%
$LILAK 2%