Michael Burry’s Latest Gold Bet
His recent 13-F filing
You’ve seen the film Big Short right?
Christian Bale plays Michael Burry, the eccentric hedge fund manager who nailed the subprime crisis on the short side by buying credit default swaps against subprime mortgage deals.
Anyway, I’m always interested to see what he’s up to, has he spotted something that everyone’s missing?
What’s he thinking?
Well in his latest 13-F filing it revealed he has added aggressively to his long China stance.
With 360k shares of JD and 125k shares of BABA.
Not just the usual GLD though, but PHYS which is a bit different…(Prospectus here)
I thought to myself, “Why choose PHYS for exposure? GLD is so much more liquid”
Let’s look at the differences…
- GLD is way more liquid (15-40x) and tracks the gold spot price very accurately.
It’s the perfect vehicle for traders looking to speculate on the price of gold via an ETF. - PHYS on the other hand tracks the Gold price, but gives the investor a legal claim on actual physical Gold bullion…
Why would you want a claim on bullion?
Well, there are some tax treatment differences, but I think we both know why…
If the sh1t really hit the fan, I suspect GLD wouldn’t be much use. There’s probably a disclaimer in there somewhere…
In the worst-case scenario, you want to be collecting actual gold bars right?
Perhaps I’m thinking too much into it and it’s just an operational reason, but I think it’s interesting nevertheless…
Here’s a chart of GLD (blue) and PHYS (orange) over the past few years. Not always in lockstep.
Anyway, we’ll see how it all pans out.