Burry is specifically positioning around expected tax-loss selling pressure in LULU, not merely doing an ordinary tax-loss harvest for his own tax bill. Burry is “mitigating near-term tax selling” and says he expects heightened selling pressure on underperforming stocks in Q4. He bought DECK as a proxy as he expects LULU and DECK will move similarly and when the wash sale that’s going to affect LULU is over 30 days from now he plans to repurchase LULU and maybe hold onto some of DECK.
So we should all buy LULU right now and pump the stock and make Burry pay much more for LULU 30 days from now. Joking aside, wouldn’t big, smart money jump in when others are selling due to tax harvesting? Big hedge funds and such? I can’t imagine the stock will fall just because of tax harvesting? Obviously there will be a selling pressure but the market is complex and there should be buying pressure whenever short-lived selling pressure arrives.
Burry is trying to avoid being exposed to the anticipated tax-selling pressure on LULU, rather than simply saying, “I need to harvest my own loss.”
I might actually buy LULU now. Inverse Burry.