Just spotted something interesting about how contrarian investors are playing this market. You know Burry, the guy who famously shorted the housing crisis? Well, his fund Scion has been doing some bold moves lately that caught my attention.

So here's the play: after basically clearing out their entire portfolio in Q1 (which turned out to be perfect timing before that April selloff), Burry and his team started buying heavily in Q2. But not the obvious stuff - they went after two stocks that have been absolutely demolished this year.

First one is UnitedHealth. The healthcare giant got crushed, down around 41% at its worst. Why? The company massively underestimated medical costs for 2025, and now they're looking at $6.5 billion higher expenses than projected. That tanked their earnings guidance from $29.50-$30 down to $16 per share. Plus there's a DOJ investigation into their Medicare Advantage billing practices. Pretty grim situation, right? But here's where Burry saw opportunity - he grabbed about 20,000 shares directly and another 350,000 through long call options. Other heavy hitters like Buffett also jumped in.

The thesis seems to be: yeah, United has real problems right now, but it's still the largest health insurer in the country. That pricing power matters. The balance sheet is actually holding up - they're generating solid operational cash flow with a 9%+ free cash flow yield and maintain a 3% dividend. Burry's probably thinking most of the bad news is already priced in.

Second play is Lululemon, down nearly 47% this year. They're facing headwinds - supply chain issues, tariffs, consumers being more cautious about luxury spending, and the post-COVID exercise boom fading. But Burry still bought 50,000 shares outright plus 400,000 through call options. Interesting move because Lulu actually beat earnings estimates in their latest quarter, they've got $1.3 billion cash with zero debt, and they're planning some price increases to offset tariff impacts. Trading at 13.5x forward earnings now.

What's the common thread here? Both stocks got destroyed, but both have strong fundamentals and balance sheets. Burry seems to be betting that the near-term challenges are fully reflected in the price, and these companies have the financial muscle to survive and thrive later. Classic contrarian play - buying when everyone's panicking.

The timing of these moves from Burry is worth paying attention to. After nailing the April market downturn call, he's clearly staying sharp on where the real value is hiding.