JD - Michael Burry Just Made A Brilliant Gold Arbitrage Trade In PHYS

2024-05-16 14:12:08 ET

Summary

• Michael Burry, known for his successful bets during the 2008 financial crisis, has found a clever arbitrage opportunity in a physical gold ETF.
• Burry's positions are in the Sprott Physical Gold Trust, which allows investors to take delivery of the gold if they buy enough.
• Burry bought for a discount and now can sell for close to NAV thanks to the publicity from his 13-F - if he didn't already take delivery.
• Gold is a good hedge against potential U.S. election chaos and geopolitical tension.
• Exploring different ways to buy gold.

Quarterly 13-F reports came out this week, requiring institutional investors with more than $100 million in assets to disclose their holdings as of the end of Q1. 13-F reports offer a window into the portfolios of investing legends like Warren Buffett, Bill Ackman and Michael Burry (of The Big Short fame). I'm fascinated with these because the only time valuations were higher than now for large-cap US stocks was the late 1990s tech bubble. Buffett sold some Apple ( AAPL ) and bought Chubb ( CB ), Ackman bought nothing, and Burry disclosed that his biggest purchase was a physical gold fund ( PHYS ). As far as famous hedge fund managers go, Burry is the most flexible of the bunch because of his small AUM and willingness to think outside the box. So why would Burry be interested in gold? Let's dig in!...

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