Michael J. Burry | Deep Value Investor

Michael J. Burry is an American physician, investor, and former hedge fund manager. Burry started investing as an aside while he was a practising physician. He became quite known on online value investment forums for his original write-ups.

He was ultimately discovered by Joel Greenblatt, who seeded his first hedge fund, Scion Captial. Burry founded and ran the hedge fund from 2000 until 2008, and then closed to focus on his own personal investments. At that time he had abandoned his approach of focusing on deeply mispriced microcap stocks and invested heavily in Credit Default Swaps.

The Silicon Investors Message Board

Burry signed up on an investment forum called Silicon Investors in November 1996. Over the course of 4 years, Burry wrote over founded 25 discussion boards and wrote 3,304 posts. Even though the Silicon Investors forum, as the name indicates, focused on tech stocks, Burry’s stock write-ups generally focused on deep value stocks and Ben Graham style Net-Nets.

Scion Capital

From its inception on November1, 2000 and until it closed down in June 2008, Scion Capital recorded returns of 489.34% net of fees and expenses. During the same time period, the S&P 500, a benchmark for the overall return of the US market, returned just under 3% including dividends.

The Big Short

By 2005, Burry was staving off his traditional investment philosophy, by turning his focus away from traditional Graham-style Net-Nets as his research into the Subprime Mortage Market deepened.

Burry’s research led him to take a huge short position on the subprime market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against subprime portfolios that he considered overvalued. This analysis proved correct, and Scion Capital exited the positions in 2008 with immense profits.

 

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