The Zhitong Finance App learned that the investor Michael Burry, who predicted the 2008 financial crisis by accurately identifying major flaws in the US subprime mortgage market, has concentrated most of his bearish bets on the NASDAQ 100 Index (NDX) and Vaneck Semiconductor ETF (SMH). It is expected that the market may peak within the next nine months.
Bury said in a recent Substack blog post posted last Sunday that he has converted most of his previous short positions into options, and currently put options on the NASDAQ 100 and Vaneck Semiconductor ETFs make up almost all of his short exposure. Put options give investors the right to sell a stock or index at a predetermined price before a specified date, making a profit if the price falls.
Bury concentrates on bearish tech bets
Burry claims that its NASDAQ 100 put option expires in April 2027, and that the position is relatively cheap in a low volatility environment and is in line with its investment timeline.
“I think we are in the 0 to 9 months before a major top appears,” Burry wrote, adding that the last few months of the bull market could fluctuate sharply as major stock indexes break through to new highs.
Burry said that the Vaneck semiconductor ETF concentrates on some of the hottest and excessively rising semiconductor stocks in the market, making it an attractive tool for its bearish bets.
According to Bury, Nvidia accounts for 19.6% of the ETF, TSMC for 9.3%, and AMD for 5.6%. Broadcom, Micron Technology, Mewell Technology, and Applied Materials each account for about 5% of the positions.
“Currently, almost all of my short positions are expressed through Vaneck Semiconductor ETFs and NASDAQ 100 put options,” he wrote.
Bury's Vaneck Semiconductor ETF put options expire in June 2027, and about 20% are also off-price. He expects the value of these options to rise significantly before the underlying ETF or Nasdaq 100 index falls by 20%.
Bury's other bearish bets remain
Bury claims he continues to hold long-term put options with Oracle and Palantir Technologies. He has closed his other short positions and transferred them to put options on the Nasdaq 100 Index and Vaneck Semiconductor ETF.
Regarding Palantir, Bury acknowledged that the stock recently closed at a record high and is likely to rise further. According to his blog post, the stock has doubled since he closed half of his short position in June, after which he exited the remaining position when switching to a put option.
He also stated that he “bought several series of preferred shares and sold” Fannie Mae and Freddie Mac common stock positions in order to achieve full tax losses on the “twin” mortgage.
On Stocktwits, retail sentiment on Vaneck Semiconductor ETF is “bearish” and “bullish” on Invesco QQQ Trust Series 1 (QQQ), which tracks NASDAQ 100 shares. The sentiment for Oracle was “bearish” and “extremely bullish” for Palantir. Since this year, Vaneck Semiconductor ETFs have risen more than 67%, Palantir has risen 17.6%, and Oracle has declined 26.5%.