Michael Burry, the contrarian investor best known for profiting from the 2008 housing crisis, is pulling back from Chinese technology stocks after a brief and aggressive foray.
In a notable shift revealed in Scion Asset Management’s latest filing, Burry has reduced his equity portfolio from 13 positions to just seven as of the end of the first quarter.
The filing indicates that Scion is now holding bearish put options against several prominent Chinese tech companies, including Alibaba, Baidu, JD.com, and PDD Holdings—the parent company of Temu. The firm also holds puts on Trip.com and U.S.-based AI leader Nvidia. These positions suggest that Burry is hedging against or speculating on declines in the sector, reversing his earlier bet on a rebound in Chinese tech.
The retreat marks a tactical adjustment by Scion, which had leaned into Chinese equities beginning in late 2022, even as global investors remained wary of the sector due to regulatory headwinds and uneven macroeconomic data from China. By the end of 2024, Scion had accumulated long positions in several of these names. The reversal in Q1 2025, with a pivot to bearish options, reflects growing concern about the durability of recent gains in the sector.
Earlier this year, shares of Chinese tech companies rallied as investor sentiment improved following the emergence of AI innovator DeepSeek and a temporary easing of trade tensions between the U.S. and China. Alibaba, Baidu, and PDD Holdings posted substantial year-to-date gains of 46%, 6%, and 22%, respectively, while JD.com lagged slightly, down 1%, amid mounting competition in the food delivery space.
However, those tailwinds now face renewed pressure. Former President Donald Trump’s “Liberation Day” announcement revived fears of further tariffs, injecting volatility into Chinese equity markets. With policy risk back in the spotlight, Burry’s pivot to puts signals a more defensive or opportunistic stance, likely anticipating renewed selling pressure in the near term.
Scion’s repositioning also includes a significant move in U.S. consumer equities. The firm doubled its long position in Estée Lauder, raising its stake to 200,000 shares. While the cosmetics giant has struggled over the past 12 months—impacted by sluggish Chinese consumer demand and U.S. recession concerns—Burry’s increased exposure indicates a belief in the company’s long-term recovery prospects. Estée Lauder shares are down 15% year to date but jumped nearly 4% in after-hours trading following the disclosure of Scion’s expanded stake.
Scion Asset Management, which reported approximately $155 million in assets under management as of March 31, has not commented publicly on the recent trades. However, the filing illustrates a tightly concentrated portfolio with a high-conviction tilt, consistent with Burry’s longstanding approach to deep value investing.
Burry first gained prominence for his prescient bet against subprime mortgage-backed securities in the mid-2000s—a trade that earned him a central role in Michael Lewis’s The Big Short and its subsequent film adaptation. Since then, Burry has continued to pursue contrarian strategies, often positioning his portfolio against consensus narratives.
His earlier move into Chinese tech had surprised many in the wealth management and institutional investor communities. The sector has seen a steep decline since its peak, with valuations compressed by Beijing’s crackdown on internet platforms, tighter data regulations, and a property-led economic slowdown. While recent developments—including a renewed AI boom and limited regulatory easing—helped spark a short-term rally, uncertainty remains elevated.
For RIAs and portfolio managers evaluating international equity exposure, Burry’s latest moves may signal caution around chasing rebounds in China without hedging tools in place. His pivot to puts suggests skepticism about the longevity of recent gains, particularly in the face of possible geopolitical re-escalation or disappointing macro data.
Meanwhile, his increased stake in Estée Lauder underscores the continued relevance of bottom-up value analysis in an environment shaped by divergent global growth prospects. While the beauty brand faces near-term headwinds, Burry appears to see an attractive entry point for a long-term play on global consumer spending normalization.
As of now, Scion’s core holdings reflect a minimalist, conviction-driven strategy—typical of Burry’s approach. His moves also illustrate the importance of adapting portfolio construction to shifting risk dynamics, whether that means rotating out of cyclical tech into consumer defensives or using options to express bearish views with limited capital outlay.
The portfolio changes may also reflect a broader concern about stretched valuations and rising macro risk in both U.S. and emerging markets. In that context, Burry’s choices offer insight into how one high-profile value investor is navigating an increasingly complex global investment landscape.
For advisors looking to incorporate similar thinking into client portfolios, Burry’s moves underscore the value of selective international exposure, tactical hedging, and staying grounded in valuation fundamentals—especially when sentiment shifts rapidly. The use of put options on international tech names, in particular, may serve as a model for how to de-risk while still maintaining optionality.
Ultimately, while Burry’s views don’t always align with consensus forecasts, they consistently reflect a willingness to challenge prevailing narratives. For financial professionals managing risk across client portfolios, his evolving strategy offers a timely reminder: conviction is critical, but so is knowing when to reassess.
