Latest disclosures reveal that Burry has converted $186 million in put options into $522 million in call options, making a bold bet that the bull market will continue...

After profiting massively from short positions during the financial crisis, Michael Burry became one of the market's most famous bears. However, three portfolio experts believe he appears to have turned bullish on the stock market in the previous quarter.

Portfolio updates released last week show that the investor's Scion Asset Management converted put options on six stocks into call options on nine stocks during the last quarter. The nominal values of these positions were $186 million and $522 million, respectively.

According to his first-quarter portfolio update, as of the end of March, Burry's hedge fund held seven positions, including put options on Alibaba, JD.com, and NVIDIA, as well as direct holdings in Estée Lauder. Three months later, it held 15 positions, including call options and direct holdings in Estée Lauder and Lululemon, as well as call options on Alibaba, JD.com, and VF Corporation.

While these filings only capture a snapshot of Burry's U.S. stock positions on a given day and have a six-week publication delay, they may still provide some insight into his investment strategy and market outlook.

**"Big Short" Pivot**

Peter Mallouk, president and CEO of Creative Planning, said Burry's first-quarter portfolio indicated he was convinced that tech stocks "would suffer considerable losses in the future."

"He clearly thought these stocks were overvalued at the time and expected at least one correction in this group," he added.

Except for NVIDIA, all the stocks Burry shorted declined during the last quarter.

Mallouk said Burry's adjusted positions at the end of June "signal a very different view," adding that the call options and long bets are "substantial," indicating he "expects the upward trend to continue."

"He has shifted from a firm conviction bet on one sector declining to a broad bet that the bull market will continue," Mallouk said.

The benchmark S&P 500 has surged more than 28% since its April lows and gained over 3% since the end of June, reaching record highs above 6,400 points.

Gerry Fowler, head of equity derivatives at UBS Group, said Burry appears to have moved from "mildly bearish to cautiously bullish."

Fowler said Burry's portfolio appears "opportunistic" and "contrarian" because he converted short bets on stocks like Alibaba and JD.com into long positions on these same companies as well as others that plummeted in April.

Fowler added that the size of Burry's long positions suggests he is not heavily relying on debt for financing, while his call options "still reflect some concern about downside risk" because using options means tying up less capital and taking less risk than buying underlying stocks.

Daniel Bustamante, chief investor at Bustamante Capital Management, believes Burry is also betting on several troubled companies staging comebacks.

The fund manager said buying Estée Lauder and VF Corporation represents "true distressed turnaround investing" because the beauty giant's new CEO is working to cut costs and revive sluggish sales, while VF's new bosses are also trying to revive its streetwear brand Vans and reduce costs.

Bustamante said he feels less optimistic about Burry's bullish stance on athleisure brand Lululemon because the company's chief product officer Sun Choe recently jumped ship to VF.

"Losing her is equivalent to the Warriors losing Steph Curry," Bustamante said.

The stock has plummeted nearly 50% this year as investors worry about slowing growth, intense competition, and tariffs raising its costs.

**Greater Returns**

Bustamante said that by using options, Burry is "operating in the right way from both a risk and potential return perspective" because if any of the troubled companies does rebound, he will achieve "asymmetric returns."

Burry's iconic "big short" bet against the real estate bubble in the mid-2000s was also asymmetric. He purchased credit default swaps as insurance against real estate collapse, paying only modest premiums to hold them, then reaping massive profits when widespread mortgage defaults triggered payouts on these derivatives.