Value Investing with Sven Carlin, Ph.D.|24. Juni
Burry's Strong Buys - MELI, ADBE, FISV, LULU, ZTS, VEEV, PYPL / Short TSLA, PLTR
Summary of Michael Burry's Recent Investment Strategies
Experienced investor Michael Burry is building strong positions in beaten-down stocks („falling knives“) while shorting overvalued tech stocks. His focus is on companies with high trading volume and new shareholders, which may signal a bottoming process.
Strong Buys
- Mercado Libre (MELI): The stock is down about 30 % over the past year, with a P/E ratio of 43, down from 100–150. If growth continues at 30 %, the business could quadruple in four years. Risks include capital outflows from Latin America.
- Adobe (ADBE): The stock fell from over $600 to below $200, with a P/E ratio of 11. The company grows at 8–10 %, and a recovery to a P/E of 20 could double the stock. Adobe benefits from its strong enterprise market position and AI copyright protection via Firefly.
- Fiserv (FISV): 56 % decline over five years, P/E of 8. The company generates $4 billion in free cash flow annually. Achieving earnings targets could lead to a stock price of $150–160 (3x return).
- Lululemon Athletica (LULU): Down 70 %, P/E of 9. The company is debt-free, profitable, and growing in China. A turnaround in North America could boost the stock by 50 %. Fashion risks remain.
- Zoetis (ZTS): Stable numbers, high return on invested capital, and a good pipeline. Burry sees potential, though the analyst does not deeply analyze pharma stocks.
- Veeva Systems (VEEV): Stock down 50 %, but the company continues to grow profitably with increasing cash flow. Valuation is historically cheap.
- PayPal (PYPL): P/E of 8, with $6 billion in buybacks annually. Growth is stagnant at 3 %, and buybacks could be destructive if the business declines. However, the company remains profitable.
Short Positions
- Tesla (TSLA), Palantir (PLTR), Oracle (ORCL), Nvidia (NVDA) (puts), and Nasdaq 100 (puts)
- These shorts act as a hedge against a market crash and the AI “super bubble.” Burry believes the inflated valuations (e.g., Palantir with an absurdly high revenue multiple) are unsustainable.
Strategic Overview
Burry combines value investing with a hedging strategy. The long positions offer potential for 2x to 10x returns during a recovery, while the shorts aim to offset losses in a bear market. Analyst Sven Carlin finds the strategy interesting but prefers a more concentrated selection of the top three positions.
