Burry flags six stocks as likely tax-loss sale candidates

Michael Burry outlined how he is positioning his portfolio for the fourth-quarter tax-loss harvesting season, highlighting six stocks that stand out as likely tax loss sale candidates that may not do well over the next couple of months.

Burry summarized the seasonal backdrop in his October 5th Substack post: “The fourth quarter is tax loss harvesting season. This time of the year I try to beat the rush, which arrives near the end of October and peaks in the first week of December.”

"In my portfolio, six stocks stand out as likely tax loss sale candidates that may not do well over the next couple of months," he added.

According to his investment strategy, Burry established a new position in Deckers Outdoor (DECK) as part of a "proxy swap" trade with his shares of lululemon athletica (LULU).

Burry retains his long-term conviction in lululemon (LULU) but temporarily replaced his losing position in lululemon (LULU) with an undisclosed amount of Deckers Outdoor's (DECK) shares as a comparable industry substitute to manage his sector exposure.

For Fannie Mae (FNMA) and Freddie Mac (FMCC), Burry fully exited Fannie Mae and shifted the capital into Freddie Mac to capture the tax loss while maintaining exposure to the sector. He plans to reverse the trade next month.

Burry is holding Fiserv (FISV) through the volatility, saying its current valuation offers low-teens annualized return potential over the long term. In Sprouts Farmers Market (SFM) and Zoetis (ZTS), he replaced direct holdings with far-out-of-the-money LEAP calls expiring in 2028 and 2029 after both stocks hit new lows.

For MetLife (MET), Burry added long-dated 2029 out-of-the-money put options, citing potential stress in private credit and private equity valuations.

Separately, Burry also expanded his exposure to Chinese equities, establishing a sizable position in BYD (BYDDF) following a price pullback and adding far-out-of-the-money 2029 call options on JD.com (JD). He is not adding fresh capital to Alibaba (BABA), citing concerns over recent equity issuances used to fund the company’s AI infrastructure buildout.