Michael Burry Video: Investing in Farmland, Real Estate, Gold

The Top Investments and Best Investments for 2012 Buy Stocks, Buy Shares, How to Invest - Michael Burry, the former head of Scion Capital LLC who predicted the housing market's plunge, talks with Bloomberg's Jon Erlichman about his investments in agricultural land, real estate and gold.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Dr. Michael "The Big Short" Burry's "Brutal Hangover Is Inevitable" State-Of-The-World UCLA Commencement Speech

Infamous for his prediction of the great recession, Europe's demise, and the collapse of the US financial system (as well as profiting extremely handsomely from said predictions), so well captured in Michael Lewis' book "The Big Short", UCLA's Dr. Michael Burry undertakes UCLA's Economics Department's commencement speech with much aplomb. In this "age of infinite distraction", the astounding truthiness of this 15 minute speech is stunning from single-sentence summation of Europe's convulsions that "when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable" he reminds us that Californians, and indeed all Americans, should take note. A quarter-of-an-hour well spent from a self-described 'chicken-little' who was "just trying to figure it all out".
Source: Zerohedge

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

More wisdom from Michael Burry

As you remember Michael Burry started his investment career as a poster on a message board about stocks. In the beginning he preferred to run an ultra-concentrated portfolio with only 4 to 6 stocks. Later Burry has changed his mind and targeted a more diversified portfolio of 9-10 stocks. After sometime he has evolved the way he thinks about diversification. He held up to 18 positions and said that “If anything that Buffett’s done can be said to have hurt value investors, IMO it’s his witticisms regarding diversification as a weapon of the ignorant or lazy.” Michael Burry said that because he could not handle the high level of volatility that comes from ultra-concentrated portfolio holdings. Guess what the volatility is when you have 4-6 positions and 2 or 3 goes down big way? He goes to say that he still outperform the market with a portfolio of 15 stocks so it’s better to diversify.

It is interesting to point out that Michael criticizing Buffett’s stance on diversification at a time when he himself is holding 15 positions. I believe that Buffett’s criticisms of over diversification are aimed at the closet indexers that do nothing to separate themselves from the market. While changing his believe that 4-6 stocks is the optimal diversification to believing that ~15 positions is the optimal mix in just about two years is a huge move. Still a portfolio of 15 positions today is considered as conservative. So the advice about do not do over-diversification is still active today.

Michael Burry’s investment approach is really complex and changing. He relies mainly on relative valuation, technical analysis and other rules that help him to sell or buy and make the decisions with no respect toward the tax efficiency and turnover.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Michael Burry QUOTES

These are wonderful quotes from Michael Burry comments that are worth-reading for every serious investor. As you know Michael Burry has retired, so it is hard to find more comments by the great investor. That is why it is wise to remind about some of his wonderful comments or quotes that he made during his short but successful investment career.

1. I prefer to look at specific investments within the inefficient parts of the market.

2. The bulk of opportunities remain in undervalued, smaller, more illiquid situations that often represent average or slightly above-average businesses

3. fully aware that wonderful businesses make wonderful investments only at wonderful prices, I will continue to seek out the bargains amid the refuse.

4. It is likely, however, that the investors in the habit of overturning the most stones will find the most success.

5. My firm opinion is that the best hedge is buying an appropriately safe and cheap stock.

6. It is a tenet of my investment style that, on the subject of common stock investment, maximizing the upside means first and foremost minimizing the downside

7. Lost dollars are simply harder to replace than gained dollars are to lose.

8. The Fund maintains a high degree of concentration - typically 15-25 stocks, or even less. Some or all of these stocks may be relatively illiquid.

9. Volatility does not determine risk.

10. I certainly view volatility as my friend volatility is on sale because 99% of the institutions out there are doing their best to avoid it

11. In essence, the stock market represents three separate categories of business. They are, adjusted for inflation, those with shrinking intrinsic value, those with approximately stable intrinsic value, and those with steadily growing intrinsic value. The preference, always, would be to buy a long-term franchise at a substantial discount from growing intrinsic value.

12. Ick investing means taking a special analytical interest in stocks that inspire a first reaction of “ick.” I tend to become interested in stocks that by their very names or circumstances inspire unwillingness – and an “ick” accompanied by a wrinkle of the nose on the part of most investors to delve any further.

13. One hedges when one is unsure. I do not seek out investments of which I am unsure.

14. I will always choose the dollar bill carrying a wildly fluctuating discount rather than the dollar bill selling for a quite stable premium.

15. With all seriousness, a 2,500-share sell when no one is looking could torpedo the apparent market value of several of the Fund’s holdings.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Michael Burry Blog Write Ups

In this post you can gain more information on how Michael Burry valued investments. Back in the times he ran

Scion Capital

, he invested only in special situations. In this post I present an excert of Michael Burry writing on the special situation “Huttig Building Products (HBP) “. By reading more of his writings we can get the picture how he invested in equities and how he did more than 30% annualized returns beating the market usually with more than 15% per year.“I just finished entering a bunch of data such as trailing EPS and revenues. Throw it all out the window.Huttig Building Products may be one of the most ignored, misunderstood stocks on the market, and a big reason is that superficial analysis with readily available data is, well, too superficial. Huttig Building Products (NYSE: HBP), spun-off from Crane (NYSE: CR) last year, is a leading distributor of building products such as doors, windows and trim. Value investors may recognize the opportunity that so often occurs with spin-offs. In this case, simultaneous with the spin-off, Huttig issued 6.5 million shares to acquire Rugby USA from Rugby Group PLC. The net is that even the proxy for the spin-off was worthless because it wouldn’t account for the acquisition. As a spin-off from an S&P 500 company, Huttig was guaranteed hot potato status anyway. But factor in confusing offering documents and an admittedly poor marketing job, and the stock simply could not avoid the doghouse.
The beneath-the-surface numbers follow. The leader in its very fragmented industry, Huttig has a
market share of just 8% and will earn revenues topping $1.2 billion. Razor-thin margins are offset by industry-leading working capital management. In fact, the company has been profitable since the Civil War. This year, the company will see about $60 million in EBITDA plus a substantial one-time gain, yet carries an enterprise value ($89 market capitalization plus $122 million debt less $6 million cash) just about $205 million.
As the industry’s most efficient operator (with management firmly ensconced in a shareholder-friendly EVA compensation model straight out of Stern & Stewart), Huttig is ahead of plan to squeeze $15 million in synergies out of Rugby as well as bring Rugby’s poor working capital management more in line with Huttig’s other operations. Expect another $20 million to drip out of working capital within the next year.
Because of these savings, Huttig in effect paid just $40 million for Rugby’s $30 million in annual EBITDA.
While Huttig’s management should get credit, some of it must be shared with the motivated seller. Rugby Group PLC is not the world’s best-managed company, to put it lightly.
Going forward, Huttig will have tremendous free cash flow. Free cash flow averaged $21 million per year
for the three years before the acquisition of Rugby. Now, EBITDA jumps to at least $60 million, and free cash flow jumps to at least $35 million. Plus, in the short term, we get the $20 million or so that comes out of Rugby’s working capital. As a result of this, during calendar 2000 Huttig is well on track to bring its $122 million in debt down to $82 million. Management’s reasons for the debt-reduction? Reduced interest expense and expanded ability to pursue acquisitions. So what we are looking at is an enterprise trading at just 3.1 times EBITDA, and only about 5.1 times free cash flow. Remember – 130 years of continuous profitability.
Management follows strict return-on-investment criteria according to Stern Stewart’s EVA theory and model’s operations on GE’s Six Sigma program. The Chairman comes from Crane and is known to be a shareholder advocate”.

Catalyst

Sheer value is something of a catalyst here, but there are other key aspects to consider. Rugby Group PLC holds nearly a third of Huttig’s share and is a price-insensitive seller on the market. This introduces price risk but not business risk. The shares are not liquid, and Seth Klarman is said to have bought up to 20% of Huttig’s shares. If so, consider those shares locked up. Klarman is known as an extremely disciplined deep value investor. Once the Rugby Group shares are on the market, look for a buyout of Huttig. The buyout could come from inside (management) and a private market valuation based on recent activity places the shares at a worth over $12-15/share. Again, the Chairman is a shareholder steward – Crane investment arm still has an investment in Huttig – and would not let the takeout go through much lower than private market value. I’m looking for action within the next year. In the meantime, a large distributor of wholesale doors left the business. Huttig is expanding to meet the demand. Because of this, sales may rise over the next year or two even if, as seems probable, the
homebuilding market turns south. Finally, spin-offs often reach a price nadir about one-year after the spin-off date; it takes that long for the knee-jerk sales to stop. By early 2001, the nadir should be behind us.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Michael Burry Net Worth

Michael Burry’s Net Worth is estimated to be around $200-$300 million USD. Because Michael Burry of Baupost Group is so mysterious and rarely give comments or likes to discuss himself, the information is still unknown. This is just an estimate and is based on the assets that Scion Capital managed, and the normal returns of hedge fund business management.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Dr. Michael Burry on the Financial Crisis

Michael Burry gave an hour presentation on the financial crisis and some important information about what is to come.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.

Michael Bury investment in Almonds

Michael Bury a founder of the now closed Scion Capital, invested in farmland to start producing almonds. He purchased almond farms in California, one of the biggest region in the world where almonds are produced. This is probably because he expects a water crisis worldwide that will probably drive up the prices of almonds. Michael Lewis who interviewed Micahel Bury, said, "almonds require a lot of water to grow and he’s got a very complicated argument about why these almond farms are a good idea, so I trust him. It seems that if he is right, we will pay more for water and almonds in future. Michael Bury has many times said that farmland with water rights will be one of the most valuable investment in the future.

Michael Burry is founder of the Scion Capital LLC hedge fund, which he ran from 2000 until 2008, when he closed the fund to focus on his own personal investments. Author Michael Lewis profiled him in his 2010 book The Big Short: Inside the Doomsday Machine.