We are sure, just as many of the so-called "smartest men in the room" ignored him last time, so every status-quo-maintaining, asset-gathering, commission-taker will be quick to dissonantly shrug off Michael Burry's (the economic soothsayer from Michael Lewis' book "The Big Short") warnings this time.
As NYMag.com reports, in an email, which readers of the book will recognize as his preferred method of communication, the real-life head of Scion Asset Management answered some of questions about the state of the financial system, his ominous-sounding water trade, and what, if anything, we can feel hopeful about...
The movie portrays all of you as kind of swashbuckling heroes in some ways, but McKay suggested to me that you were very troubled by what happened. Is that the case?
I felt I was watching a plane crash. I actually had that dream again and again. I knew what was happening, but there was nothing I, or anyone else, could do to stop it. The last day of 2007, I couldn’t come home. I was in the office till late at night, I couldn’t calm down. I wrote my wife an email and just said, "I can’t come home; it’s just too upsetting what’s happening, and I didn’t want to come home to my kids like this." As for punishment of those responsible, borrowers were punished for their overindulgences — they lost homes and lives. Let’s not forget that. But the executives at the lenders simply got rich.
Were you surprised no one went to jail?
I am shocked that executives at some of the worst lenders were not punished for what they did. But this is the nature of these things. The ones running the machine did not get punished after the dot-com bubble either — all those VCs and dot-com executives still live in their mansions lining the 280 corridor on the San Francisco peninsula. The little guy will pay for it — the small investor, the borrower. Which is why the little guy needs to be warned to be more diligent and to be more suspicious of society’s sanctioned suits offering free money. It will always be seductive, but that’s the devil that wants your soul.
When I spoke to some of the other real-life characters from The Big Short, I was surprised to hear that they thought that financial reform was pretty effective and that the system was much safer. Michael Lewis disagreed. In your opinion, did the crash result in any positive changes?
Unfortunately, not many that I can see. The biggest hope I had was that we would enter a new era of personal responsibility. Instead, we doubled down on blaming others, and this is long-term tragic. Too, the crisis, incredibly, made the biggest banks bigger. And it made the Federal Reserve, an unelected body, even more powerful and therefore more relevant. The major reform legislation, Dodd-Frank, was named after two guys bought and sold by special interests, and one of them should be shouldering a good amount of blame for the crisis. Banks were forced, by the government, to save some of the worst lenders in the housing bubble, then the government turned around and pilloried the banks for the crimes of the companies they were forced to acquire. The zero interest-rate policy broke the social contract for generations of hardworking Americans who saved for retirement, only to find their savings are not nearly enough. And the interest the Federal Reserve pays on the excess reserves of lending institutions broke the money multiplier and handcuffed lending to small and midsized enterprises, where the majority of job creation and upward mobility in wages occurs. Government policies and regulations in the postcrisis era have aided the hollowing-out of middle America far more than anything the private sector has done. These changes even expanded the wealth gap by making asset owners richer at the expense of renters. Maybe there are some positive changes in there, but it seems I fail to see beyond the absurdity.
How do you think all of this affected people's perception of the System, in general?
The postcrisis perception, at least in the media, appears to be one of Americans being held down by Wall Street, by big companies in the private sector, and by the wealthy. Capitalism is on trial. I see it a little differently. If a lender offers me free money, I do not have to take it. And if I take it, I better understand all the terms, because there is no such thing as free money. That is just basic personal responsibility and common sense. The enablers for this crisis were varied, and it starts not with the bank but with decisions by individuals to borrow to finance a better life, and that is one very loaded decision. This crisis was such a bona fide 100-year flood that the entire world is still trying to dig out of the mud seven years later. Yet so few took responsibility for having any part in it, and the reason is simple: All these people found others to blame, and to that extent, an unhelpful narrative was created. Whether it’s the one percent or hedge funds or Wall Street, I do not think society is well served by failing to encourage every last American to look within. This crisis truly took a village, and most of the villagers themselves are not without some personal responsibility for the circumstances in which they found themselves. We should be teaching our kids to be better citizens through personal responsibility, not by the example of blame.
Where do we stand now, economically?
Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook.
What makes you most nervous about the future?
Debt. The idea that growth will remedy our debts is so addictive for politicians, but the citizens end up paying the price. The public sector has really stepped up as a consumer of debt. The Federal Reserve’s balance sheet is leveraged 77:1. Like I said, the absurdity, it just befuddles me.
The last line of the movie, printed on a placard, is “Michael Burry is focusing all of his trading on one commodity: Water.” It sounds very ominous. Can you describe this position to me?
Fundamentally, I started looking at investments in water about 15 years ago. Fresh, clean water cannot be taken for granted. And it is not — water is political, and litigious. Transporting water is impractical for both political and physical reasons, so buying up water rights did not make a lot of sense to me, unless I was pursuing a greater fool theory of investment — which was not my intention. What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas. This is the method for redistributing water that is least contentious, and ultimately it can be profitable, which will ensure that this redistribution is sustainable. A bottle of wine takes over 400 bottles of water to produce — the water embedded in food is what I found interesting.
What, if anything, makes you hopeful about the future?
Innovation, especially in America, is continuing at a breakneck pace, even in areas facing substantial political or regulatory headwinds. The advances in health care in particular are breathtaking — so many selfless souls are working to advance science, and this is heartening. Long-term, this is good for humans in general. Americans have so much natural entrepreneurial drive. The caveat is that it is technology that should be a tool making lives better in the real world, and in line with the American spirit of getting better and better at something, whether it’s curing cancer or creating a better taxi service. I am less impressed with the market values assigned to technology that enhances distraction. We don’t want Orwell’s world, but we don’t want Huxley’s world either.
* * *
His prescient warning from many years ago remains just as crucial (perhaps even more so)...
"In this age of infinite distraction... when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable."
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.
June 22, 2013
Michael Burry’s Comeback
Michael Burry, who made his name betting against subprime mortgages and as a figure in two major books about Wall Street, is set to launch a new hedge fund.Michael Burry closed the doors of his Scion Capital five years ago, having earned investors nearly 5 times their money. But Burry has now set up Scion Asset Management and is seeking as much as $200 million for the new vehicle. The website of his new firm is: www.scionasset.com
Santangel's Review's Steven Friedman noted that Scion Capital's Web site, which until recently simply showed historical letters and information is now redirecting web visitors to a much more professional-looking website.
According to The Wall Street Journal reports, Michael Burry hopes to rise between $100 million and $200 million for the new effort. At its peak, the old Scion Capital managed about $1 billion.
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.
June 18, 2013
Michael Burry book recommendations
Here is a list of Michael Burry recommended books:
The Intelligent Investor by Benjamin Graham and David Dodd
Common Stocks and Uncommon Profits and Other Writings by Philip Fisher
Why Stocks Go Up (and Down) by William H. Pike
Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The World’s Most Famous Investor by Mary Buffett and David Clark
The Art of Short Selling by Kathryn Staley
The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend by Janet Lowe
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.
September 20, 2012
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.
June 25, 2012
Dr. Michael "The Big Short" Burry's "Brutal Hangover Is Inevitable" State-Of-The-World UCLA Commencement Speech
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.
June 06, 2012
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.
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.
June 05, 2012
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.
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.
March 18, 2012
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
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.
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.
March 02, 2012
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.
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.
March 01, 2012
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.
February 22, 2012
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.
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.
December 14, 2011
Michael Burry long gold and farmland
Burry believes that agricultural land, productive agricultural land with water on site, will be very valuable in the future. And I've put a good amount of money into that. So I'm investing in alternative investments as well as stocks.
Given his past bet against the housing market, it was interesting to hear Burry's thoughts on real estate this time around. He thinks it's an "artificial market" and that Fannie Mae and Freddie Mac are essentially withholding properties from sale and not forcing foreclosures. He feels it would be best if the government exited the mortgage market. On the topic of investing in real estate, he says:
I think there is some value in real estate. You have to buy it right. It's not in general, that's the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how i've invested from the beginning. I'm looking for these special situations, these unique ideas and that's true in real estate too ... In my situation I'd rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I've done some of that too.
Finally, Burry has also caught the gold bug and likes the precious metal as well. Embedded below are two videos from Burry's interview (email readers will need to come to the site to watch them):
Michael Burry is a long time bearish on the USD.
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.
Given his past bet against the housing market, it was interesting to hear Burry's thoughts on real estate this time around. He thinks it's an "artificial market" and that Fannie Mae and Freddie Mac are essentially withholding properties from sale and not forcing foreclosures. He feels it would be best if the government exited the mortgage market. On the topic of investing in real estate, he says:
I think there is some value in real estate. You have to buy it right. It's not in general, that's the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how i've invested from the beginning. I'm looking for these special situations, these unique ideas and that's true in real estate too ... In my situation I'd rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I've done some of that too.
Finally, Burry has also caught the gold bug and likes the precious metal as well. Embedded below are two videos from Burry's interview (email readers will need to come to the site to watch them):
Michael Burry is a long time bearish on the USD.
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.
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