Michael Burry just cleared his investment shelves. Like, completely.
The famously contrarian investor—he of "The Big Short" fame—has liquidated virtually his entire portfolio... except for a single position in Estée Lauder. Yeah, the makeup company.
I've tracked Burry's moves for years, and even by his standards, this one's a head-scratcher. His latest 13F filing reveals what might be the most concentrated bet he's made since his legendary mortgage market call preceding the 2008 financial crisis. And lemme tell you, Burry's never been one for half-measures.
But Estée Lauder? Really?
What makes this particularly eyebrow-raising (no beauty pun intended) is that Estée Lauder isn't exactly crushing it right now. The luxury cosmetics giant has been struggling with China's economic slowdown, inventory problems, and consumers who've apparently found other places to spend their money. Since those heady pandemic days of 2021—remember when we all suddenly cared about looking good from the neck up for Zoom calls?—$EL shares have taken a serious beating.
So what the heck is Burry seeing here?
One theory floating around Wall Street (where I spoke with several analysts still trying to make sense of this move) involves the so-called "lipstick effect." It's this idea that when the economy tanks, people still splurge on small luxuries like fancy lipstick even as they cut back on bigger purchases. Maybe Burry's positioning for a recession while betting Estée Lauder will weather the storm better than most.
Or perhaps this is just classic Burry contrarianism. High-quality businesses hit temporary headwinds, stocks get hammered, patient investors pounce—that kind of thing. Estée Lauder does have incredible brand power, after all.
There's also always the M&A angle. The beauty industry's been consolidating faster than foundation on a hot day. (Sorry for that one.) Even with its family-controlled structure, Estée Lauder might not be immune to the right takeover approach.
Look, we should probably remember that Burry's post-2008 track record has been... uneven. His doom-and-gloom predictions about hyperinflation after pandemic stimulus? Didn't quite pan out. Those massive shorts against Tesla and ARK? Ouch. Being early in markets—which Burry often is—is practically the same as being wrong.
This beauty play feels especially out of character given his historical focus on deep value situations. Beauty companies typically trade at the kind of premium multiples that make value investors break out in hives.
What's most confusing is the timing. Why now? Is there something in consumer spending patterns that suggests premium beauty is making a comeback? Is he betting on China reopening in a big way? Or—and this is where I keep landing—is he making a broader statement about where safety might be found in an increasingly unstable market?
Whatever his reasoning, Burry remains one of finance's most fascinating figures. Not because he's infallible (he's demonstrably not), but because when someone who correctly predicted one of history's biggest financial meltdowns makes a move this dramatic, you kinda have to pay attention.
The beauty of investing is... well, sometimes it isn't beautiful at all. Sometimes it's messy and contradictory and forces us to reconsider everything we thought we knew.
Time will tell whether Burry needs to reach for the concealer on this one or if he's found a true diamond in the rough. In the meantime, Wall Street will keep doing what it does best when Burry makes a move—speculate wildly while secretly wondering if he knows something the rest of us don't.
