Warren Buffett, Michael Burry, and other top investors just published their Q2 stock portfolios. Here are 5 key trades they made.

Michael Burry Warren Buffett
  • Warren Buffett, Michael Burry, and other top investors recently filed portfolio updates.
  • Buffett slashed his pharma stakes while Burry bet against Cathie Wood’s flagship ETF.
  • Bill Miller, Jim Simons’ RenTech, and the LDS Church also made notable trades last quarter.
  • See more stories on Insider’s business page.

Warren Buffett, Michael Burry, and other leading investors recently disclosed the contents of their stock portfolios as of June 30, revealing they made a range of striking moves in the second quarter.

Funds linked to Bill Miller, Jim Simons, and the Church of Jesus Christ of Latter-day Saints all made notable changes to their holdings, signaling their views on everything from Elon Musk’s Tesla and Cathie Wood’s Ark Invest, to meme stocks such as GameStop and AMC Entertainment.

Here are five of the key trades last quarter:

Warren Buffett slashed his pharma holdings

Warren Buffett

Buffett’s Berkshire Hathaway took a knife to its pharmaceutical holdings last quarter. It sold around $260 million of AbbVie stock, $307 million of Bristol Myers Squibb stock, and $645 million of Merck stock, based on the companies’ average closing share prices in the period.

The famed investor’s company only bought into the trio in the third quarter of 2020, and boosted its holdings in the fourth quarter. Yet Berkshire turned around and sold roughly $2.4 billion worth of pharma stocks in the first six months of this year, slashing its AbbVie and Bristol Myers Squibb stakes by about 20% and its Merck position by 68%.

While Buffett has been interested in owning a basket of pharma stocks for decades, he hinted in May that he didn’t fully understand them and wasn’t too comfortable holding them. That may explain the recent disposals.

Michael Burry bet against Cathie Wood

Michael Burry against a promotional backdrop for the movie "The Big Short."

Michael Burry of “The Big Short” fame purchased¬†bearish put options against 235,500 shares of Cathie Wood’s flagship exchange-traded fund Ark Innovation last quarter.

The Scion Asset Management chief tweeted in February that the hype around Wood had reached excessive levels. He compared her to past growth investors whose luck ran out, and warned that “Wall Street will be ruthless in the end.”

Burry also ramped up his bet against Tesla last quarter. Elon Musk’s electric-vehicle company is one of Ark’s biggest holdings, underscoring Burry’s skepticism of the mass disruption and technological revolution that Wood believes is coming.

The Scion chief is best known for predicting the collapse of the housing bubble in the mid-2000s, and making a fortune by betting on that outcome. He also helped pave the way for the GameStop short squeeze in January by investing in the video-game retailer and agitating for changes at the company back in 2019.

Bill Miller bought into Coinbase

Bill Miller
Investor Bill Miller, co-founder, CIO and fund manager for Miller Value Partners

Bill Miller’s fund, Miller Value Partners, bought around 122,000 shares of Coinbase worth $30 million last quarter. The investment underscores Miller’s continued faith in cryptocurrencies and the larger blockchain ecosystem.

Miller made his fortune as a value investor before losing 90% of it during the financial crisis. However, he’s a billionaire today thanks to early investments in Amazon stock and bitcoin.

Notably, his fund sold its GameStop shares before the video-game retailer’s stock went stratospheric in January, meaning it missed out on a massive windfall.

Jim Simons’ RenTech tripled its AMC stake

Jim Simons
im Simons attends IAS Einstein Gala honoring Jim Simons at Pier 60 at Chelsea Piers on March 14, 2019 in New York City.

Jim Simons’ Renaissance Technologies tapped into the meme-stock boom last quarter with a well-timed bet on AMC Entertainment.

The quantitative hedge fund, founded by the Cold War codebreaker and MIT math professor in 1978, tripled its stake in AMC in the three months to June 30. The movie-theater chain’s stock price skyrocketed nearly 500% in the period as retail investors piled in. As a result, RenTech’s position jumped nearly 20-fold in value to $103 million.

In contrast, RenTech slashed its stake in Tesla by 75% last quarter, reducing the value of its position to $138 million at the end of June.

The LDS Church cashed out its GameStop profits

FILE PHOTO: A flag flies at half mask outside the world headquarters of the Mormon Church for Thomas S. Monson, President of the Church of Jesus Christ of Latter-Day Saints (The Mormon church) in Salt Lake City, Utah, U.S., January 3, 2018.  REUTERS/George Frey
A flag flies at half mask outside the world headquarters of the Mormon Church for Thomas S. Monson, President of the Church of Jesus Christ of Latter-Day Saints (The Mormon church) in Salt Lake City

The Church of Jesus Christ of Latter-day Saints took its GameStop profits off the table last quarter.

Ensign Peak Advisors, the church’s $100 billion investment fund, invested in GameStop in the fourth quarter of 2020. The value of its position ballooned by about 900% in the first three months of the year thanks to the short squeeze on the stock.

Ensign didn’t list GameStop in its latest portfolio update, suggesting the fund cashed out the stake last quarter. It likely pocketed about $9 million from the exit, based on GameStop’s average closing share price in the period, or as much as $14 million it if sold when the stock surged in June.

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Legendary investor Bill Miller says bitcoin and Amazon stock have made him a billionaire

Bill Miller
Bill Miller.

  • Bill Miller has become a billionaire thanks to Amazon and bitcoin.
  • The value investor’s Amazon stake made up 83% of his personal portfolio last year.
  • Miller’s bitcoin holdings are now worth more than his Amazon position.
  • See more stories on Insider’s business page.

Bill Miller, a star fund manager who was brought to his knees during the financial crisis, has staged a remarkable comeback and become a billionaire thanks to Amazon and bitcoin.

Journalist William Green interviewed the value investor for his new book, “Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life,” and for a recent Barron’s article.

Miller beat the benchmark S&P 500 index for 15 straight years as manager of Legg Mason Value Trust. However, his fortunes soured when he made leveraged bets on Bear Stearns, Freddie Mac, and other hard-hit financial stocks in 2008, but the Federal Reserve failed to swoop in and help as much as he expected.

As a result, Miller’s flagship fund tumbled 55% that year, and an investor exodus slashed his assets under management from about $77 billion to $800 million, Miller told Green. The heavy losses, coupled with a recent divorce settlement, meant Miller’s personal fortune shrunk by around 90% in a matter of months.

Luckily for Miller, he had started investing in Amazon soon after it went public in 1997, and had boosted his stake in the e-commerce group after the dot-com bubble burst. Although he was forced to sell some of his shares when investors pulled money out of his funds in 2008, he also snapped up bullish call options on Amazon stock when it tanked that year.

Amazon shares, on a split-adjusted basis, have skyrocketed from less than $40 in November 2008 to $3,300 today. Miller told Green last year that the position made up 83% of his personal portfolio, and he was likely the largest individual shareholder of Amazon “whose last name isn’t Bezos” – excluding MacKenzie Scott, who divorced Amazon CEO Jeff Bezos and dropped his last name in 2019.

Miller’s bitcoin bet has now surpassed his Amazon stake in value, he told Green in the recent Barron’s interview. He started buying when it cost $200 to $300 a coin, and his average cost is about $500, he said. Bitcoin has surged by more than 600% since the start of last year to around $50,000, suggesting Miller has scored a roughly 10,000% gain on his investment.

Miller told Green that thanks to his Amazon and bitcoin wagers, he’s now a billionaire.

The Miller Value Partners chief remains bullish on both assets. He expects Amazon stock to double in the next three years as it expands its cloud-hosting, advertising, business-to-business, and private-label operations. He’s also confident that bitcoin will rise 10-fold in value as demand outstrips supply, and investors recognize it’s “far superior to gold,” he told Green.

While Miller managed to hold Amazon and bitcoin through their highs and lows in recent years, his fund virtually eliminated its GameStop stake in 2018. If his team hadn’t given up on the video-game retailer, their stake would have been worth $800 million at the height of the short squeeze in January, and more than $250 million today.

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Legendary investor Bill Miller sold GameStop stock before the short squeeze, missing out on a potential $800 million windfall

bill miller
Bill Miller.

  • Bill Miller’s fund sold almost all of its GameStop shares before their price rocketed in January.
  • Miller Value Partners’ 1.7 million shares would have been worth over $800 million.
  • The veteran investor’s team dumped 97% of its stake because it hadn’t paid off for years.
  • See more stories on Insider’s business page.

Legendary investor Bill Miller’s fund sold virtually all of its GameStop stock before the January short squeeze, missing out on a potential $800 million windfall.

Miller Value Partners invested in the video-games retailer in early 2014. It initially bought 1.2 million shares, then boosted its stake to almost 1.7 million shares by the end of 2015, SEC filings show. Its position was worth as much as $68 million earlier that year, when GameStop shares were trading around $43.

If Miller’s fund had held on to its shares, they would have been worth as much as $808 million on January 28, when GameStop’s stock price briefly skyrocketed to $483. Even if they declined to cash out then, their stake would be worth about $270 million at the current stock price of around $160.

However, Miller and his team slashed their position by 97% to roughly 32,000 shares in the first quarter of 2018. “We’ve owned this investment for a number of years and it has yet to work,” Samantha McLemore, Miller’s co-portfolio manager of the Opportunity Equity strategy, explained at the time. While GameStop remained “one of the cheapest companies on the market,” she and Miller ditched it to “avoid perpetual losers.”

Notably, the fund’s Income Strategy bought GameStop shares in May 2019. However, Miller and his son swiftly dumped them after the retailer scrapped its dividend and failed to lay out a clear turnaround plan.

“We cut bait so quickly that we didn’t even own the stock for a full quarter,” Bill Miller IV said in a letter to investors, describing the move as their “biggest mistake” in the period.

The third and final strategy, Deep Value, appears to be holding on. Daniel Lysik, the portfolio’s manager, described GameStop shares as “significantly mispriced” in the first quarter of 2019, and trumpeted their “significant upside potential” last October.

Read more: We asked 5 renowned growth-fund managers for their favorite stock picks. These are the 4 that multiple managers think will crush the market going forward.

Miller’s fund owned a total of 116,000 GameStop shares at the end of December, or about 7% of the amount it held back in 2015. Assuming it hasn’t already sold them, they would fetch around $20 million today.

Miller Value Partners declined a request for comment from Insider.

Here’s a chart tracking the size and value of Miller’s GameStop holdings over the past seven years:

Miller_GameStop

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