Overview
Michael Burry's Scion Asset Management filings reveal a 180-degree reversal between Q1 and Q2 2025: a maximum-bearish, nearly all-puts "fortress" portfolio was completely dismantled and redeployed into a concentrated set of bullish call options on beaten-down market leaders. The shift signals a move from top-down, macro-focused bearishness to bottom-up, micro-focused bullishness — picking through specific names he views as oversold rather than betting on a systemic crash.
Key Concepts
- Margin of safety — Burry's foundational principle, in his own words “100% based on the concept of a margin of safety”: buying securities for significantly less than their calculated intrinsic value.
- “Road kill” investing — actively seeking unpopular, overlooked companies, buying when they look beaten-up and selling once the market has repriced them.
- Forensic research — a clinical examination of financials that prioritizes free cash flow over easily manipulated metrics like P/E ratios.
- The Q1 → Q2 reversal — Q1 2025 held 1 long position, 6 put positions, 0 calls (
98M bearish Nvidia put bet. Q2 2025 flipped to 6 long positions, 0 puts, 9 call positions ($56.3M reported value), concentrated in Healthcare and Consumer Discretionary.
Q2 2025 Portfolio
Common stock holdings: Estée Lauder (21.55%), Lululemon (21.12%), Bruker (18.31%), Regeneron (14.00%), MercadoLibre (13.94%), UnitedHealth (11.09%).
Leveraged call bets (by notional): UnitedHealth (105M), Lululemon (73.8M), Estée Lauder (32.6M), Alibaba ($28M), plus undisclosed-value positions in ASML and VF Corporation.
Anatomy of Conviction: Bear Case vs. Bull Case
- Healthcare on the operating table — UnitedHealth was decimated (~41-60% fall) after management admitted underestimating medical costs by 30 to $16, compounded by a CEO departure and DOJ investigation. Burry's bull case: pricing power to raise 2026 premiums, a 10-year-low P/E (~13), and company alongside other value investors like Buffett and Tepper. Regeneron faces biosimilar competition to its Eylea franchise, but Burry's thesis leans on Dupixent's 22% YoY growth and a ~45-candidate pipeline.
- Battered premium brands — Lululemon fell ~50% YTD on slowing Americas growth and tariff margin pressure, but retains 20% international growth, no debt, and aggressive buybacks ($1.77B/12mo) at a decade-low ~13.5x P/E. Estée Lauder, Burry's longest-held conviction position, is down over 80% from its peak on China demand weakness — the Q2 call addition is a leveraged bet on a “lipstick effect” recovery.
- Tactical and growth plays — MercadoLibre is a long-term bet on Latin American e-commerce/fintech (34% YoY revenue growth, 91% growth in its credit portfolio). The BABA/JD reversal from Q1 puts to Q2 calls is the most tactical position in the book: a bet that the April tariff sell-off created an attractive short-term entry rather than a change of long-term view on China risk.
Risk Assessment
The Q2 portfolio carries significant idiosyncratic risk: it is highly concentrated in challenged sectors and expressed largely through leveraged call options, which require correct timing (not just direction) to be profitable. This is a high-stakes, name-specific bet on recovery rather than a diversified defensive stance.
Key Takeaways
- The headline signal isn't bullish-vs-bearish in the abstract — it's a change in what kind of risk Burry is underwriting: systemic/macro (Q1 puts) versus idiosyncratic/company-specific (Q2 calls).
- Every position in the Q2 book pairs a well-known bear narrative (earnings miss, guidance cut, demand collapse) against a specific, falsifiable bull thesis — the filing alone doesn't reveal which side Burry believes; the call options simply reveal that he's underwriting a rebound with leverage.
- The BABA/JD flip from puts to calls within two quarters is the clearest evidence this is a tactical, not permanent, repositioning — Burry isn't newly bullish on China's structural risks, just on entry price after the April sell-off.