Big Short Michael Burrys top 5 portfolio positions
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Michael Burry has gained legendary status amongst investors for his contrarian bets that pay off big. While much attention goes to his short positions, Burry also holds compelling long-term stocks. We’ll analyze the investment case for two “forever stocks” from Burry’s portfolio — Expedia and Stellantis.

Table of Contents:

  • Burry’s Unconventional Path to Investing Fame
  • Why Expedia Could Be a Long-Term Winner
  • Stellantis Offers Value and Stability for the Long Haul
  • Seeking Safety and Growth in an Uncertain Market
  • Key Takeaways for Investors

Burry’s Unconventional Path to Investing Fame

Michael Burry is far from your typical Wall Street investor. A doctor by training, he honed his investing skills by picking stocks in his spare time in the 1990s. This led him to launch Scion Asset Management hedge fund in 2000.

But Burry gained true fame for his massive contrarian bets against the housing bubble in the mid-2000s. He correctly foresaw the subprime mortgage crisis before almost anyone else. Burry made a fortune for himself and investors when the market crashed in 2008, as depicted in the book and movie “The Big Short”.

Lately, Burry has grabbed headlines for another potentially lucrative short position. He revealed a $530 million bet against the broader stock market in August 2022. However, this “next big short” has yet to pay off, with markets resilient despite Burry’s warnings.

Still, Burry deserves respect as an independent thinker who makes bold calls based on fundamental analysis. He ignoressentiment and groupthink. Within his portfolio, some under-the-radar stock picks could be ideal for buy-and-hold investors.

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Why Expedia Could Be a Long-Term Winner

One little-known stock Michael Burry has accumulated is Expedia Group Inc (NASDAQ: EXPE). The online travel giant operates hundreds of travel booking sites across lodging, air travel, car rentals, cruises, and more. Burry’s Scion Asset Management held nearly $11 million worth of Expedia stock as of June 30, 2022.

Burry likely sees significant long-term potential in Expedia despite near-term industry challenges. The reopening of international travel and events should drive a multi-year travel boom as pent-up demand is unleashed. Expedia is poised to ride this tailwind.

The company has also invested heavily in technology to improve traveler experiences. For example, Expedia recently incorporated conversational AI into its platform to streamline trip planning. As innovations enhance user engagement, Expedia can continue gaining share.

The stock reflects Burry’s bullishness. Expedia has delivered consistent growth over the past decade, rallying from around $50 in 2013 to over $100 today. The stock did stumble during the pandemic but regained its trajectory as travel recovered. With shares still down 20% from all-time highs, Expedia offers an attractive entry point.

For investors with lengthy time horizons, Expedia has attributes of a “forever stock.” Its asset-light online business model enables margin expansion. Expedia’s massive reach across travel gives it competitive advantages against rivals. As a leader in its industry with steady historical returns, Expedia has the makings of a long-term winner.

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Stellantis Offers Value and Stability for the Long Haul

In addition to Expedia, Michael Burry has recently taken a shine to automaker Stellantis NV (NYSE: STLA). The Scion fund held over 300,000 shares worth nearly $6 million as of June 30.

Stellantis was formed in 2021 through the merger of Fiat Chrysler and France’s PSA Groupe. The combination created the world’s fourth largest automaker by volume.

Burry likely appreciates the deep value in Stellantis. It currently trades at just 2.9 times forward earnings compared to over 70 for Tesla. Its price-to-sales ratio of 0.2 also signals an attractive valuation relative to an industry average near 1.

But Stellantis isn’t just cheap — it has growth drivers too. The firm is investing over $35 billion through 2025 to build EVs and shift towards software-defined vehicles. Management targets 100% battery electric vehicle sales in Europe by 2030. Stellantis also holds 14 iconic auto brands including Jeep, Ram, Peugeot, and Alfa Romeo.

While the auto industry faces risks from recessions, supply chains, and competition, Stellantis seems positioned for steadier long-term gains. The stock has surged nearly 40% in 2022, extending its uptrend since 2013. With strong manufacturing assets and global reach, Stellantis has the right ingredients for buy-and-hold investors.

Seeking Safety and Growth in an Uncertain Market

Why should investors care about Michael Burry’s stock picks aimed at stability and longevity? With markets extremely fragile now, safe and reliable returns are more valuable than ever.

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Raging inflation, soaring interest rates, and recession fears have brought tremendous uncertainty. Stocks with defensive attributes and consistent upside can outperform in this environment.

Expedia and Stellantis represent fundamentally-sound companies with histories of solid gains. While less flashy than high-flying tech stocks, they offer investors exposure to growth along with greater safety.

These kinds of “forever stocks” are cornerstones of durable portfolios. They provide ballast against market downdrafts while steadily compounding gains over long periods.

Key Takeaways for Investors

  • Michael Burry has a knack for value plays that pay off over time, not just bold short bets. His long-term stock holdings warrant attention.
  • Expedia enjoys massive reach in online travel and invests heavily in technology to engage users. Its asset-light model drives margins.
  • Stellantis brings deep value and iconic auto brands. Its EV and software push provide catalysts for continued growth.
  • Defensive, stable stocks like Expedia and Stellantis are appealing for investors seeking safety amid market turbulence.
  • Portfolios need a foundation of stocks held forever to generate reliable returns and balance against risks.

Like Burry, wise investors know the importance of buying quality companies at good prices for long-term gains. Expedia and Stellantis represent compelling opportunities to follow this timeless investing wisdom.

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