Saturday, September 18, 2021
HomeNewsMichael Burry bets Cathie Wood: Battle the hedge fund economy

Michael Burry bets Cathie Wood: Battle the hedge fund economy




In superhero series, the situation becomes particularly serious when good is no longer fighting evil, but two heroes compete against each other. The modern hero is no longer a dull do-gooder, but also has his problems, fears, needs and hopes. Superhero comics are no longer black and white – and suddenly, in the battle between hero and hero, it is open to whom the audience’s sympathies belong.

There is now a similar battle on Wall Street. Two star investors compete against each other: Michael Burry bets against Cathie Wood. Burry became famous for the film “The Big Short”, which deals with the background of the financial crisis. Christian Bale plays the capital manager Burry in the film adaptation of the book of the same name. His hedge fund Scion bets early and – as it unfortunately turned out for the rest of mankind – successfully that the so-called subprime real estate papers were worthless. Since then, the financial world has noticed when Burry bets again. Fund manager Wood, on the other hand, is considered by many to be a star investor because she has achieved great success with tech investments. Your fans can buy vests, hoodies and polo shirts with the logo of their hedge fund called Ark.




Burry warns of the “mother of all crashes”

Burry’s hedge fund Scion has now announced that it has placed so-called put contracts worth nearly $ 31 million against Ark’s most important fund, the Ark Innovation ETF. Wood has attracted billions of dollars in investor capital with him. A put contract gives Scion the right to sell shares in the Ark Fund prior to a specified date and at a previously agreed price. Burry wins this bet if Ark’s price falls below this threshold. The exact terms of the puts and when they were purchased are not known.

Burry thinks the prices of many of the firms Wood selected are grossly exaggerated. He does not see innovations that will yield many profits in the future, but a bubble that will burst. In June, he warned that investing in cryptocurrencies and meme stocks recommended for purchase on forums like Reddit could drag investors into the “mother of all crashes”. By the way, Burry is betting even more against Tesla. Wood, on the other hand, puts most of the money in her fund on the e-car manufacturer. Wall Street is watching who wins this fight.


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