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0:00 So, Michael Bur, infamous investor from the big short who pretty much shorted the subprime mortgage crisis and made billions of dollars calling the 2008 great financial crisis, just did something pretty crazy, pretty wacky, right? You can see on the screen here, 13F reports came out for the hedge funds. This comes out every single quarter and this was for Q1 2025. And Michael Bur did something very interesting. The first thing to note is he's one of the only hedge funds that was green in the quarter, at least from the big names, right? Bill Aman, Warren Buffett, etc. A lot of these names were red for the quarter. Ray Dalio, he made over 10%. Um, but he also did something crazy. Number of holdings, one. That's right. He sold everything and he put it
0:45 all. It's not just that he has one holding. He has 100% of his portfolio in one name and he bought it all this quarter. Right? So, you can see he sold off of his names. he previously kind of famously was long China, right? He had PDD, he had BU, he had Alibaba, he had JD um and a few other names, but he was he was going long China and that worked for a bit. You can see his his average buy price here and you know the positions he was green on, the positions he was red on, you know, overall whatever made 50% on Alibaba, so that's pretty good. But what he did here was sold everything and went 100% in on Lauder Estee Estee Lauder. This is um beauty company, fashion, perfumes, and
1:30 clothes. Not even too sure. I mean, we've all heard of Estee Lauder. Let's go see exactly. Yeah. Makeup, skin care, fragrance, hair care, skincare, mo. Okay, so this is a giant company, by the way. This is one of the largest companies in the world. Uh well, 23 billion, I guess. one of the largest in its sector right this is not like um buying honest company or some small cap ester it's a big name and why did he buy this stock I mean let's take a look at some of the fundamentals this is basically the the reason this is interesting is because he's making a huge bet kind of like he did in 2008 sold everything he said I nothing looks attractive to me but this does right and there's a lot of names especially in consumer discretionary that are down a
2:16 bunch right Nike Starbucks, Celsius. We talk about a bunch on this channel. Lululemon, like there's a bunch of names that look discounted. Um, Small Caps as well. We talk about the Honest Company, but he likes this one. Okay. And so, what I what I like about it, like let's talk about pros and cons. What I like about it is it was off 86%. It's down over 80% from the all-time high. So, it's definitely down a bunch. Looks like five waves for looks like seven waves for the wave counters, the Elliot waivers. um green shade flip on the bottom. Maybe a bit of capitulation, right? You see the big volume came up and it's making higher highs and higher lows now. And on this last move, it was interesting to me because it reported um a strong earnings beat, right? Over 100% surprise compared to estimates and it got a green tag on a
3:02 lower time frame, right? So, had a nice gap up, green tag. So, it's like, okay, I could understand trying to build a position here, but I build it with stops, right? Because it's it's trade. It's not like, you know, if we're going to double bottom here, okay, if you want to accumulate, sure, he's a value investor. I'd build it with stops because you gapped up, but you sold off and it's only lower time frame green tag. You didn't get the higher time frame, nor did you get the green momentum down. So, you didn't get the hat-tick. You only got one of the three possible green tags, but still, it seems like momentum is shifting and as long as it can hold above the EMA. Okay. Right. Gapped down this day on the 15th, traded up. So, it held the EMA and printed an inside bar today. Obviously this to me will be much more interesting if we can break through this trend line resistance this rejection rejection rejection break through with a daily green tug green
3:48 momentum then that first pullback to me will be very very interesting and there's no rush right again this is 80% down so you know buy you need to buy at 64 you can buy at 6970 you're still going to have ton of upside because all-time highs is over $350. The reason I'm saying this, the reason I'm saying I don't love it for DCA value investing as much as him is one because I'm reading the momentum, right? Maybe if it would have gotten a green tag and it wouldn't have sold off on the gap up like sold off. It's showing you that it's still rejecting this level. Maybe if that would be different, high volume on the come up, then maybe I'd like it better. But also the valuation, right? If you look at the fundamentals, I don't really understand what he's looking at, right? It has a forward P of 44. That means you're paying 44 times next year's earnings. And the problem with that is S&P average PE ratio is about 20. You're paying o
4:35 like about about double the S&P. But for a beauty company, right, uh a personal care product, consumer staples, that's not the sector that you want to be paying over 30 PE, right? That's, you know, this not technology. It's not a fast growing sector. You can see the growth is an F. The valuation is a D+. The momentum is a D. Okay. And so what's going on here? Like if they're not growing and they're over um and they're trading at a high multiple, I don't understand. They're growing backwards, right? They lost money this year, forward growth. They're projected to lose money um the next two years, right? You can see their five-year average is zero. So they were barely growing to begin with now and now they're losing money. Um yeah, EPS growth is the same thing year-over-year negative
5:20 60%. Okay. free cash flow growth per share um growth rate is the only thing that's positive here right valuation again we talked about the PE price to sales looks a little bit better 1.5 but again look at this sector that you're in you're trading at a PE that's you know double the sector average right this sector is a sector that trades at a median below the S&P because of course this is consumer personal care products right um not good not good right then You can look at the PEG ratio which includes growth, right? It's PE taking growth into account. Under one means possibly undervalued. This is at an 8.7. So taking growth into account, F, right? Terrible. Terrible. Um, terrible
6:07 valuations. What's going on to profitability? Okay, that looks good. That's, you know, that's an gross profit. But then you come here and you're like, what? How are they making 74% gross margins and they're not turning that into some bottom line profits? like what's going on with the operating expenses here, right? So, their their their return metrics, you know, two of these are negative. Something's wrong with their profitability. They're not growing anymore, right? They're they're they're losing revenue on a year-to-year basis, and that's really affecting their profitability. They haven't been able to keep expenses in check um or tune that down to match this the slowdown in growth, right? That's why the stock is doing what it's doing. So, to me, maybe a bit of a value drop. Um who knows? you you can see the long-term, right? Trading that 17 times
6:53 uh 2028's um earnings. Okay, let's take a look at revisions. Up revision 17 versus six, it's 3x, which is good, but what you want is, you know, almost zero or one here for down revisions, six down revisions. Uh this has a lot of analysts covering it. Looks like their earnings call, Insight, outlined a strategic return to growth next year with their beauty re-imagined initiatives. Organic sales down, sequential improvement in non-travel retail business sales. Yeah. So, their gross margins solid and it's expanded. So, this whole beauty reimagined is a transformative initiative aimed at making the company leaner, faster, and more consumer centric. This is a competitive, this is
7:39 a cutthroat industry. right? You know, and you got to wonder what tariffs are going to do to a company like this. And this is not a company I I I know or I've studied ever before. Um the only kind of company I've ever looked at in this sector is ELF and uh and honest, right? Because I like I like the ones that have growth ahead. They've just turning the table to first-time profitability. They have nice IPO bases and they're just growing at a rapid rate, right? Uh growth stocks basically. This is more like looking at Cisco, right? If you're looking at Cisco or IBM, kind of like your your dad's technology companies, not not the Max 7, not the hyperscalers, something that has
8:25 reached maturity. Maturity is the last word you ever want to hear um in the stock market investing game. Once you've reached maturity, there's no more growth. I mean, you know, the only way you can grow is by multiple expansion, which is not going to happen here because it's already trading at a ridiculous multiple. It's not acceptable for this company, or by um by margin improvement, right? And so, that's their only way to grow here uh in terms of share price, margin improvement, and you know, share buybacks, things like that. Um because again, they're not going to get multiple expansion and they're not growing and it's too competitive. I think they're done growing. I mean, I'm not going to make that call here. I don't know enough but it's a very mature company to say the least in a competitive field right competitive industry. So that's kind of
9:13 that that's kind of that, right? And you know, again, the chart it's okay. At least it has it's it started to make higher highs, higher lows. It has a gap up off a strong earnings with a with a lower time frame green tech. It's a start. If you're going to get bullish, you got to first get the lower time frame green tag, then you got to get the higher time. So it's a start. You can't complain at a start. you build from there. As long as you don't break down, um, right? You know, that would be bullish. You break down and you get, you know, some red momo, you're back to where you were rejecting this and in this downtrend, right? However, it's a start. And if the start continues and turns into something, you break out, get some green Momo dots and daily time frame green tug volume on that impulse move, then hey, that's a pullback you want to buy and um, you have a lot of upside and then maybe I'll listen to some earnings call. it's going to be worth kind of diving deeper into the
10:00 fundamentals, seeing what this looks like. If you want to look at it from an investment standpoint, um, decent trade right now would be better with volume or kind of we prefer more green tags or at least green, you know, the the hattick, right? U, but, you know, for a trade, I won't take it, but I'll take this one if that happens, right? And then from investments, once you take this trade, it's worth looking into um for long-term potential. All right, guys. Hope you enjoyed it. Um, Michael Bur making a bold call here. um you know he probably knows something we don't or he doesn't right he has plenty of losses but 100% is conviction that's why it's interesting right you know these other things um you know normal he he never you know 10% 5% he doesn't usually have too many holdings um but that's conviction that's hell of conviction
10:45 that's 2008 style conviction so we'll see uh where he ends up with that one it's going to be very interesting story thanks for watching guys if you enjoy this kind of content uh leave a thumbs up I bought 12 stocks today that whole portfolio is posted in the Discord. Follow me on the channel. I'm going to make a video about the portfolio later this week. Join the Discord link down below. Less than a dollar a day if you want to see what's going on there. Please.
