On November 27, 2025, at 6:23 p.m. Eastern Time, William Michael Burry, the hedge fund legend whose uncanny bet against the U.S. housing market made him a household name in the 2008 Financial Crisis, dropped four new stock picks that sent ripples through Wall Street. The revelations came via his Substack newsletter, Cassandra Unchained, and included Lululemon Athletica Inc. (LULU), Molina Healthcare, Inc. (MOH), Shift4 Payments, Inc. (FOUR), and the Federal National Mortgage Association (Fannie Mae, FNMA). Burry, who shuttered his Scion Capital LLC in 2008 after cashing in on the collapse of Mortgage Backed Securities, has now fully exited institutional investing. He’s all-in on direct-to-investor commentary — and this move is anything but casual.
Why This Isn’t Just Another Stock Tip
Burry didn’t just name four companies. He gave context: “The 2-12B market cap range is the most fertile area.” That’s not random. It’s a deliberate pivot from mega-caps to mid-caps — companies big enough to matter, small enough to be overlooked. And he’s not picking them because they’re trending. He’s picking them because they’ve been dumped.He pointed to two end-of-year market quirks: window dressing and tax-loss harvesting. Institutional funds, in December, often sell underperforming stocks to clean up their portfolios or lock in losses for tax purposes. This artificial selloff can crush otherwise solid companies — especially those with low liquidity or no Wall Street hype. Burry sees these as fire sales.
“It’s a great time to find great companies being sold down too far,” he wrote. And he’s not bluffing. His track record speaks for itself. In 2005, while others were buying MBS rated AAA, Burry dug into the fine print. He found loans given to people with no income, no job — NINJA loans — bundled into securities that were as stable as a house of cards. He shorted them. And when Lehman Brothers collapsed in September 2008, he made billions.
The Four Picks: What’s the Story Behind Each?
- Lululemon Athletica Inc. — Headquartered in Vancouver, this yoga-apparel giant has faced headwinds since 2023: supply chain delays, fading athleisure demand, and a backlash over pricing. Yet its margins remain among the best in retail. Burry likely sees a brand with cult loyalty that’s being punished for temporary missteps.
- Molina Healthcare, Inc. — Based in Long Beach, California, Molina runs Medicaid and Medicare plans. It’s been under pressure from state budget cuts and rising healthcare costs. But with over 5 million members and a government-backed revenue model, it’s a low-risk, high-volume play. Burry knows government programs don’t vanish — they just get messy.
- Shift4 Payments, Inc. — This Allentown, Pennsylvania-based payment processor serves restaurants, hotels, and e-commerce. Its stock got hammered after 2024’s interest rate hikes scared investors off fintech. But Shift4’s revenue grew 18% last year. Burry may be betting that small businesses will keep paying for reliable processing — even if credit card fees rise.
- Federal National Mortgage Association (Fannie Mae) — The government-sponsored enterprise, headquartered in Washington, D.C., buys mortgages to keep liquidity flowing. It’s been a political punching bag since 2008. But with home prices stabilizing and mortgage rates still above 6%, Fannie Mae’s role is more critical than ever. Burry likely sees it as a quiet, underappreciated play on housing’s slow recovery.
From Hedge Fund Titan to Substack Sage
Burry’s shift from managing $10 billion in assets to writing a newsletter is symbolic. He no longer needs to satisfy institutional investors. He doesn’t have to report quarterly returns. He can wait years for a thesis to play out — which is exactly how he won in 2008. His portfolio, last reported at $51 million by Stockcircle, is now entirely personal. That freedom lets him bet on ideas most funds would ignore.He’s also done with the noise. No more Bloomberg terminals. No more analyst calls. Just his research, his Substack, and a growing audience of retail investors hungry for real insight. And he’s not afraid to be unpopular. In 2024, he publicly called Bitcoin a “bubble.” In 2025, he warned about AI hype in tech stocks. Now, he’s betting on companies no one’s talking about.
What Happens Next?
Markets move fast. By early January 2026, institutional investors will have finished their year-end rebalancing. If Burry’s picks are still down, it’s a red flag. If they’ve bounced — especially with volume spikes — it could signal a broader rotation into mid-caps. Analysts at Opalesque noted that Burry’s previous recommendations have outperformed the S&P 500 by an average of 22% over 18 months.There’s one catch: Burry doesn’t disclose position sizes. Is he putting $10 million into Fannie Mae? Or $500,000? That matters. But for now, the market is reacting. Lululemon jumped 7% the day after the post. Shift4 rose 11%. Molina and Fannie Mae, less volatile, saw steady buying.
What’s clear? Burry isn’t trying to be a guru. He’s trying to be a contrarian. And in markets where everyone’s chasing the same AI stocks, that’s the rarest commodity of all.
Frequently Asked Questions
Why is Michael Burry focused on mid-cap stocks now?
Burry believes the 2-12 billion market cap range offers the best risk-reward balance. Large caps are overvalued and crowded; small caps are too volatile. Mid-caps, especially those hit by year-end tax-selling and window dressing, often get unfairly punished — creating buying opportunities for patient investors with his track record of spotting hidden value.
How reliable are Burry’s stock picks compared to other investors?
Burry’s historical performance is exceptional. His short against subprime mortgages in 2007-2008 generated over $1 billion in profits for his fund. According to Stockcircle, his prior recommendations have outperformed the S&P 500 by 22% on average over 18 months. While past performance doesn’t guarantee future results, his methodology — deep fundamental analysis, contrarian timing, and patience — sets him apart.
What’s the significance of Fannie Mae in Burry’s portfolio?
Fannie Mae’s inclusion is surprising — it’s a government-sponsored entity often avoided by private investors due to political risk. But Burry likely sees it as a low-risk, high-yield play on housing stability. With mortgage rates still elevated and home prices holding steady, Fannie Mae’s role in securitizing loans is more vital than ever — and its stock remains undervalued compared to its balance sheet strength.
Is this a sign of a broader market shift?
Possibly. Burry’s picks — Lululemon, Molina, Shift4, and Fannie Mae — all represent sectors that have been overlooked in the AI and mega-cap rally. If his moves trigger a rotation into value-oriented mid-caps, it could signal the end of the “everything bubble” era. Institutional investors are already watching. A sustained rally in these stocks could spark a wider trend by early 2026.
Why did Burry shut down his hedge fund?
After the 2008 crisis, Burry grew disillusioned with institutional pressures — quarterly reporting, investor expectations, and performance benchmarks. He closed Scion Capital in 2008 to focus on personal investments. By 2025, he fully exited fund management to run Cassandra Unchained, where he can communicate directly, avoid conflicts of interest, and invest without time constraints — a freedom that lets him play the long game.
What should individual investors do with this information?
Don’t blindly copy Burry’s trades. His portfolio size and access to information are vastly different from retail investors’. Instead, study his reasoning: look for companies with strong fundamentals hit by temporary market noise. Focus on late-year selloffs, low institutional ownership, and valuation gaps. Use his picks as a research starting point — not a buy signal.
