• Our beloved Politicians and their stock trading skills

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• And now the official launch of the ANDROID APP

We’d love for you to come check it out. Downloading it only takes 5 minutes, and who knows, I think you’ll like the other pilots we will be launching with soon 😉 

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We will be revamping this newsletter up soon with more content focused on Burry and the other 13F hedge fund positions soon. Thanks again and have a great week!

Chris - co founder of Autopilot

& we’re now ready to take on the Android Community

Great news! Our team has been heads down building and are excited to share that the official Android Private Beta is now live and ready to go. The Pelosi tracker, Burry Tracker, & more is ready for the taking.

For our Android waitlisted subscribers💰

For those who have been patiently waiting, you can download the Autopilot Android app below!

The app is in the final stages of development and can now be pre-downloaded via the Google Android store. We expect to formally release the app over the next two to three weeks.

Pre download Android App

For our iOS subscribers💰

The app is live and you can download it here.

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@ current paid subscribers, read on below to see how to get into the private beta.

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• Over a five-year period the stock has collapsed 70%

• The management team recently cut the dividend, resulting in an even steeper valuation decline as dividend investors have abandoned ship

• The management team is focused on extreme debt reduction which should benefit equity over the long haul

• Working capital is getting monetized at rapid rates and converting into cash

• The company is a global powerhouse with brands worth in excess of the current enterprise value.

But this is where things get even juicer.

On September 20th, 2023, the company announced strategic alternatives of one of their core businesses. Said differently, the company is actively looking to sell this asset.

The stock has not reacted at all.

In fact, it is down.

But if the company can successfully sell this asset, there is potential to bring in $1-2 billion in sale proceeds.

The market cap is only $1.4 billion. And the enterprise value is $4.8 billion.

The stock is cheap and now an asset is in play.

Let’s dig in…

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The company has strategically changed the business model and is now forecasting to generate positive EBITDA for 2024.

The turnaround has steadily been here and the stock has reacted positively.

Should the company be successful in taking out their convertible debentures there could be meaningful upside despite the run-up in the valuation.

Burry first bought it earlier this year, and recently bought more.

We have written this name up a number of times and this will provide an overview of the most recent quarter.

Let’s dig in…

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What made this stock even more interesting is that one of the most prolific short sellers on the decade just stated publicly that they like the stock. In fact, they went on a tweeting rant providing a dozen reasons why they think the stock is cheap and the key catalysts on why the stock should trade at $13 per share, and even higher.

The stock is at $7 bucks and change today.

We have been long-term bulls on this name and personally own the stock.

And what makes this even more interesting, we now have Elon Musk tweeting about key issues regarding this company (unknowingly) and a slight up-tick in data trends that suggest a long-term uptick in users could occur over the short-term.

Should this happen the stock should re-rate.

This is an interesting name. So buckle up.

Let’s dig in…

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• The stock has collapsed from a high of $125 per share to currently $77 per share.

• The reason for the drop is from higher interest rates impacting cap rates on their income producing properties.

• However, the underlying value of their real estate has continued to appreciate and as inflation increases the value will only continue to increase.

• Net operating income at their income producing properties remains strong and covers all corporate and interest payments while land sales are reinvested back into the business.

• Bill Ackman has been buying aggressively in the open market and there are rumors he will buy out the entire company.

• The company is also aggressively repurchasing shares.

The company has significant owned assets that will appreciate significantly in an inflationary environment. Debt is mostly fixed and nonrecourse to the corporation. In addition, the company is trading well below NAV, giving investors a significant margin of safety.

Finally, with the Central Bank of Poland cutting interest rates, along with Canada halting rate hikes, any movement in global interest rates lower will act as a catalyst and send the stock price much higher. Lower interest rates will mean cap rates will fall and the NOI that the income producing properties generate will only increase in value.

This is a very interesting name with a ton of margin of safety.

Oh and did I mention, there are rumors that Bill Ackman might make a bid for the entire company?

Let’s dig in…

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If you peel through Michael Burry’s recent 13F, you will find a number of names trading significantly under book value. In fact, one of these names is so interesting and so hated it is trading at just 0.35x book value. This essentially means you are buying the stock for significantly less than liquidation value.

Michael Burry has essentially been doing this with a small little company that I have never heard of until I started to peel back his 13F. The stock is extremely interesting. And I am not the only one who thinks so. Management has been buying up stock in size in the open market. In addition, the company is actively selling real estate to shore up their balance sheet.

This is a typical Burry mean reversion play. Any additional real estate sales and the stock will likely re-rate. The assets are attractive, and the stock is dead cheap.

Let’s dig in…

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The formula for a deep value investor is rather simple.

1. Identify an industry that is beaten down and so hated that almost no one wants to invest in it.

2. Do deep fundamental research on the industry to figure out which companies within this sector can continue generating meaningful free cash flows.

3. Perform a full valuation analysis to figure out what downside is for the industry/companies in the industry.

4. Buy the industry in size.

5. Wait for a mean reversion event or catalyst that sends the share price higher. This can include but not limited to more cash flows generated than anticipated, the market realizing things are not quite as bad, some sort of management event (repurchases, dividends, cash out refinance of assets), etc.

6. Flip for a profit. Rinse, wash and repeat.

This is essentially the core the Michael Burry’s strategy. Find cheap stocks, wait for mean reversion and flip them for a double-digit gain. The strategy works and has turned many enterprising investors into extremely successful portfolio managers.

The stock I am writing about today fits this description of a deep value mean reversion play to the T.

1. The stock price has collapsed over 60% in the past year on fears of a slowdown in the advertising market.

2. There is significant debt at the corporate level which has resulted in the stock trading at essentially an equity stub value. The market cap is only $450 million, and the enterprise value is $5.5 billion.

3. Following the stock price collapse, bond prices at the corporate level have dropped to record lows and the management team is using all excess free cash flow to buy out debt substantially under par value.

4. Management guidance implies the company will generate $1 billion of annualized EBITDA with substantially all free cash flow to pay down debt. EV/EBITDA of 5.5x is not aggressive here and assumes full value of debt when the company is buying it back in size under par value.

5. 2024 could be the mean reversion year as political revenue will come back in full swing. Political revenue for advertising businesses is almost 90% incremental to the bottom line and will convert directly into free cash flow.

6. Finally, insiders of this company have purchased millions of dollars of stock in the open market, while the company is trading at basement level valuations.

I have been following this company for years. It was owned by legendary investor and businessman John Malone in the past. The company operates in a “dying” sector and tends to get blown out every few years to basement level valuations. Eventually the market realizes the industry isn’t really debt and the stock tends to fly. Now Michael Burry owns the stock and given the above thesis I laid out; the valuation looks extremely compelling.

Lets’ dig in…

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This past Monday brought a new revelation into the financial strategies of Michael Burry, thanks to the release of his 13F filing. The most startling sell from the filing is that Burry has offloaded his two heavyweight Chinese holdings: $BABA (Alibaba) and $JD (JD.com), which together comprised a significant 20% of his portfolio.

What has happened in China since Burry sold:

1. The Evergrande Fallout: China's second-largest real estate developer, Evergrande, has plunged into bankruptcy. This isn't just a hiccup; it's a seismic event that could have ripple effects across the Chinese economic landscape. For investors, this translates to increased risk and uncertainty in the Chinese market.

2. China's Unexpected Rate Cuts: Adding to the economic intrigue, the Chinese government has just made a surprising move by slashing its rates. Such decisions aren't made lightly and often hint at potential underlying economic vulnerabilities or challenges the government might be anticipating.

3. Biden's Stance on Chinese Tech: On the home front, there's mounting chatter about a forthcoming executive order from President Biden. The word on the street is that this could bar US investors from investing in Chinese tech firms. Such a move would undeniably reshape the investment landscape for many.

If Chinese stocks have found a home in your portfolio, or if you've been eyeing opportunities in this region, these events are more than just news. They're potential game-changers. Staying informed is your best strategy in these unpredictable times.

As a reminder, here are the rest of his moves from this past Monday:

Sold:

• $FRCB

Held: 

• $REAL

Bought: 

• $SPY puts*

• $QQQ puts*

Stay safe everyone!

Autopilot Team

But here is the best part.

There is an activist investor who is calling for management to reduce costs even further, pay down debt and even said we need a new executive team to steer this sinking ship. And this isn’t any run of the mill activist either. This is the activist group that went public on the powerhouse L Brands and succeeded.

The stock is deep value. Catalysts include additional monetization of working capital, further paying down debt and a continued improvement in the activewear market that has taken a beating.

To make things even more juicy, Micheal Burry has taken a position in this name. But this shouldn’t surprise you. As we recently detailed, Micheal Burry is a deep value investor by heart. He loves cheap stocks and mean reversions. And this company is the perfect example of that.

Over the near-term the stock could double. And in the long run it could reach back to the $20 per share high of 2019. With a share price of only $5.43, this stock is as cheap as the come.

Hope you enjoy our thesis on why Micheal Burry purchased this deep value name.

Stay tuned as it will be a busy week. There is a lot to cover….

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According to his SEC filing, he bought $1.6B of and puts.

To put this into perspective, these two shorts now make up 93% of his entire portfolio and his largest position held before this was only $120M.

Excluding these two major buys, the rest of his stock picks went through a completely shifting of focus. He sold his two major Chinese stocks & , sold the majority of his banks, and even bought puts against the entire finance sector.

Because of the new trades, we are launching our Q2 Burry series where we delve deep into each of these holdings, providing an in-depth analysis to help you understand the rationale behind his decisions and discern any broader market implications.

So without further ado, here is the full list of stocks Micheal Burry just filed on. Have fun.

We will be providing analysis on a number of these names over the coming days.

Stay tuned

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This Monday, the formal 13F stock filings for two of the most influential figures in the investment landscape, Michael Burry and Warren Buffett, will be released. Giving you the heads up now so that you’re ready.

Why the 13F Filings Matter:

For those who may not be familiar with what a 13F filing is, it's a quarterly report submitted to the U.S. Securities and Exchange Commission (SEC) by institutional investment managers who manage over $100 million. It provides a snapshot of the holdings managed by the reporting manager.

The significance?

Well, when it comes to big players like Burry and Buffett, their investment choices often set the tone for market movements. Their selections can influence other investors, swaying opinions and altering market dynamics. Given their track records and investment prowess, their stock picks are eagerly awaited by both individual investors and professionals.

We will be sharing those new stocks along with deep stock analysis of the new buys when they come out. A number of stocks that Burry & Buffett file often fly the day they come out.

Michael Burry: The Contrarian:

Known for his eccentricity and contrarian outlook, Michael Burry became a household name after he was immortalized in Michael Lewis's "The Big Short". He made a fortune by betting against the US housing market before the 2008 financial crisis. His 13F filings give investors a glimpse into his current perspective on the market and potentially undervalued or overvalued stocks.

Warren Buffett: The Oracle of Omaha:

Warren Buffett needs no introduction. His value-oriented investing philosophy and incredible track record of consistent returns over the decades have made him a legend. While he emphasizes that his choices are made with a long-term perspective, any shifts in his holdings spark great interest, as they may hint at broader market or sector sentiments.

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For any serious investor, newbie or seasoned, keeping an eye on the moves of these two investing giants can be both insightful and profitable. And while interpreting their choices requires a nuanced approach and one's own due diligence, their 13F filings remain an invaluable resource.

Subscribe now, and ensure you're among the first to access a deep dive analysis of their investment decisions as soon as the filings come out. Whether you're searching for investing inspiration, keen insights, or simply curious about the moves of the masters, you won't want to miss it.

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Happy Friday Everyone 🫡

In this article we will go looking at the Michael Burry case study with GameStop and lessons investors can apply to implement a Michael Burry strategy to their own investment approach.

He was rumored to make over 200% on the trade, so let’s dig in….

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In recent financial news, Rep. Mark Green (R) has become a point of discussion for his surprising foray into the world of swing trading. On July 11th, 2023, the congressman purchased $50K worth of puts on the S&P 500 Index, denoted by the $SPY ticker symbol. What is even more notable is that these same puts were sold just 25 days later.

Understanding the Trade

Before diving into the implications and reactions, it's essential to understand what such a trade represents. Buying a put option gives the holder the right, but not the obligation, to sell a stock (or in this case, an index) at a predetermined price within a certain timeframe. In layman's terms, Rep. Green was speculating that the S&P 500 would drop in value over the short term. Swing trading, meanwhile, is a style of trading where an asset is held for several days or weeks to capitalize on expected upward or downward price swings.

Swing Trading: A Primer on Catching Market Waves

Swing trading is a strategy employed by traders to capitalize on price movements or 'swings' within a relatively short time frame. Unlike day trading, where positions are closed by the end of the trading day, or long-term investing, where holdings can last for years, swing traders typically hold positions for several days to weeks. Here's a closer look at how it works:

1. Technical Analysis: Swing trading heavily relies on technical analysis, which involves studying price charts and using statistical measures to predict future price movements. Traders use various indicators like moving averages, relative strength index (RSI), and MACD (moving average convergence divergence) to spot potential buy or sell opportunities.

2. Fundamental Analysis: While swing traders mainly focus on chart patterns, they don't ignore the fundamentals. News events, earnings reports, and other economic indicators can dramatically affect a stock's price, so keeping an ear to the ground is crucial.

3. Risk Management: Essential to any trading strategy is understanding and managing risk. Swing traders often set stop-loss orders to prevent significant losses if a trade goes against them. It’s a pre-decided price point at which the trader will sell a stock to avoid further losses. Similarly, they might set a take-profit order to lock in profits at a specific price level.

4. Short Selling: Swing trading isn't just about capturing upward trends. Traders can also profit from downward price movements by short selling. This involves borrowing shares to sell them at a high price, with the hope of buying them back at a lower price.

5. Swing Points: Traders look for 'swing points' – clear turning points in the price of a security. A low swing point, for instance, might be seen after a downturn and could be a potential buying opportunity. Conversely, a high swing point, after a noticeable price rise, might suggest the asset is topping out and could be a selling point.

6. Emotion Control: Successful swing trading requires discipline. Since the stock market is inherently volatile, it's easy for emotions like fear and greed to take over. Establishing a clear plan and sticking to it, regardless of short-term market noise, is pivotal.

7. Regular Review: Markets evolve, and what worked a few months ago might not be effective today. Swing traders often review and adjust their strategies to stay in sync with market conditions.

Implications of the Trade

For a sitting US politician, especially a congressman, to be openly engaged in swing trading brings forth several implications:

1. Conflict of Interest Concerns: The potential for conflicts of interest becomes a valid concern. Any insider information or influence a politician might have over market-moving decisions can pose an ethical problem if they're actively trading based on that information.

2. Public Perception: How the public perceives a politician's financial maneuvers can impact their credibility and trustworthiness. It can appear as if a congressman is more focused on personal financial gains rather than their legislative duties.

3. Financial Acumen: On the flip side, some may argue that Rep. Green's trade showcases his understanding of the markets and financial acumen, which could be seen as a positive trait in a representative responsible for making economic decisions for the country.

Reactions and Aftermath

Given the high-profile nature of politicians and their public responsibilities, such a trade inevitably invites scrutiny. As of now, various reactions have poured in:

• Ethics Committees: They may look into the trade to ensure that no insider information was used, ensuring that the congressman acted within the constraints of the law.

• Political Opponents: As expected, political opponents might use such actions as a point of criticism, questioning the moral and ethical implications of a public figure engaged in speculative trading.

• Supporters: Those in Rep. Green's camp might applaud his financial savvy and view the trade as a private decision, separate from his public duties.

Conclusion

The debate on politicians actively trading in the stock market is not new. While there are valid concerns related to conflicts of interest and public perception, there's also an argument to be made about personal freedoms and financial literacy. As with any such instance, the key lies in transparency, adherence to ethical guidelines, and the separation of public duty from personal finance. Whether Rep. Green's trade will have any long-term political implications remains to be seen, but it undoubtedly adds to the conversation about the interplay between politics and finance in today's world.

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This article will examine his motivation and the potential implications of this decision including the full tweet, details on the short, implications, and how you can follow along.

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This time, he's turning his focus to the surging natural gas sector, seeking hidden gems with incredible potential.

Join us as we analyzed one of the natural gas companies he recently bought, uncovering the compelling reasons that caught Burry's keen eye.

From massive reserves to a robust financial standing, this company embodies the very essence of Burry's strategic investment approach, and we're about to unveil the reasons why he's placing his bets on the future of this natural gas company that is rapidly returning capital.

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Michael Burry, renowned for his remarkable success during the 2008 financial crisis, has become an investing legend. As the protagonist in Michael Lewis's book "The Big Short" and portrayed by Christian Bale in the movie adaptation, Burry gained widespread recognition for predicting the housing market crash and subsequently profiting from it. But Burry's talent extends beyond his subprime mortgage bets; his ability to identify undervalued companies and pick deep value stocks has set him apart as a gifted value investor. In this article, we will delve into Michael Burry's approach to selecting deep value stocks and uncover the principles that underpin his investment strategy.

Understanding Deep Value Investing

At its core, deep value investing involves seeking out stocks that are trading at significant discounts to their intrinsic value. This investment philosophy stands in stark contrast to growth investing, where investors target companies with high earnings potential, often leading to higher valuations. Value investors like Michael Burry, instead, seek overlooked or misunderstood companies whose stock prices do not reflect their true worth.

Rigorous Fundamental Analysis

Burry's approach to deep value investing is deeply rooted in fundamental analysis. He meticulously scrutinizes a company's financial statements, looking for clues about its overall health, cash flow, debt levels, and earnings potential. By understanding the company's fundamentals, Burry can identify whether the market's valuation accurately reflects its intrinsic value.

Contrarian Perspective

Burry is no stranger to contrarian investing. He actively seeks opportunities where the market has a negative sentiment towards a company, leading to an undervaluation. Contrarian investors often go against the herd mentality, which requires significant conviction in their analysis and belief in the company's long-term potential. This approach proved successful during the financial crisis, where Burry's bets against the housing market went against prevailing sentiment.

Patience and Long-term Horizon

Deep value investing is not a quick path to riches; it requires patience and a long-term investment horizon. Burry is known to hold positions for extended periods, sometimes years, waiting for the market to recognize the true value of the company. This patient approach allows him to capitalize on potential price discrepancies over time.

Concentrated Portfolio

Unlike some investors who diversify their holdings extensively, Burry maintains a more concentrated portfolio. By focusing on a select number of deep value stocks, he can dedicate more time and research to each investment, maximizing his understanding of the companies in which he invests.

Focus on Margin of Safety

The concept of a margin of safety is paramount to Burry's investment philosophy. He aims to buy stocks at prices substantially below their intrinsic value, which provides a margin of safety against potential adverse events or market fluctuations. This safety buffer minimizes the downside risk and increases the likelihood of profitable returns.

Unearthing Hidden Opportunities

Burry has a knack for spotting hidden opportunities where others may not look. He dives into niche industries or overlooked companies, where he can find potential gems. This approach allows him to avoid competition with other investors and capitalize on inefficiencies in the market.

Conclusion

Michael Burry's success as a deep value investor can be attributed to his rigorous fundamental analysis, contrarian perspective, patience, focus on a margin of safety, and ability to uncover hidden opportunities. His investment philosophy, which he demonstrated during the 2008 financial crisis, continues to be admired and studied by aspiring value investors. However, it is essential to note that investing is inherently risky, and even the most skilled investors may face challenges and losses. Therefore, it is vital for individual investors to conduct thorough research, exercise prudent risk management, and align their investment strategies with their financial goals. Michael Burry's journey serves as an inspiration and a valuable learning opportunity for investors seeking to master the art of deep value investing.

In this article we will be going over the following:

• The original thesis of this company and why Michael Burry bought this penny stock

• Why we think Burry likely sold the entire position and recycled the capital into other cheap stocks

• What the deep value Michael Burry approach is and how to find stocks like Michael Burry

• A list of 27 stocks that could potentially be Michael Burry stock picks the next time he files his 13-F. ( in 2 weeks)

Burry made his name shorting the housing market in 2009. But before Burry became a famous macro short seller, he was putting up double digit returns buying cheap stocks. Post the housing crisis, Burry continues to generate strong returns by purchasing cheap stocks.

We follow Burry closely as his stocks picks align closely with our internal strategy.

1. Buy cheap stocks

2. Don’t lose money

3. Sell cheap stocks when they re-rate

4. Recycle our capital into more cheap stocks

Let’s dig into why we think Burry might dump this stock after a 100% run and figure out what stocks he likes now. It is time to front run Burry.

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What did Uncle Warren see in this company and its somewhat precarious workplace culture? Here we’ll dig into the gaming content player, its proposed sale to Microsoft and how Buffett won the trade… again.

The “Oracle of Omaha” previously revealed that one of his investing apprentices, Ted Weschler and Todd Combs, first bought in October and November 2021 for $77/share. He has since added to the holding in a merger arbitrage play, betting that Microsoft’s proposed acquisition of the video game company would close.

Well looks like he was right. Last week a Judge struck down the effort blocking the deal, and the stock soared 11%.

Now the question remains, where can it go from here? We dive into more below 🤝

(Feel free to sign up for a free 7 day trial to explore our other posts, including the ones about Burry & Pelosi’s positions)

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