Michael Burry's Inflation Strategy / Hedge: Treasury Puts and Sector Allocation

This video discusses what appears to be Michael Burry's strategy to mitigate inflation. In the most recent 13F filings for Scion Asset Management, there were several interesting pieces of information. These include a large put position on a treasury ETF, and some changes in sector allocation. I discuss how these could relate to inflation expectations.

The treasury puts are interesting: treasury instruments are sensitive to interest rates. EXISTING treasury instruments fall in value when interest rates go up. This is because those old instruments now pay a lower interest rate than newer ones. Inflation would likely cause interest rates to increase. Thus, inflation would push down existing treasury prices. Thus, it appears Michael Burry's put option on treasuries is to deal with that impact.

Time stamps
* 0:00 Introduction
* 3:03 Strategy 1: Treasury put options
* 10:07 Strategy 2: Sector allocation
* 19:07 Concluding thoughts

#Inflation #MichaelBurry #Scion

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