Michael Burry’s background:

Burry became widely known and recognized as a competent value investor in the wake of the 2008 financial crash and the book (2010)/film “The Big Short” (2015), when he made himself and his investors wealthy by shorting CDOs (complex residential mortgage instruments).

However, long before that, in the second half of the 90s, his talent for value-based investing with a focus on margins of safety was discovered by investment legends like Joel Greenblatt, on various internet forums.

Trained as a physician and still holding an active medical license, Burry dropped out of his neurology practice to focus on investments, not least running the Scion Capital hedge fund from 2000-2008.

Michael Burry’s Investment Style:

Burry’s investment style is based on very careful analysis of data series on fundamental value drivers.
In the run-up to the financial crisis, he was a pioneer in analyzing the thousands of individual mortgages that were the underlying collateral in complex composite synthetic mortgage-backed securities (CDOs).

Scion Capital returned 489% after fees and expenses over the nearly 8 years of its existence. The S&P 500, over the same period, posted only a 3% total return including dividends (but before deducting trading costs such as brokerage commissions, management fees, and account fees).

Since his time with Scion Capital, Burry has focused on long-term strategic real assets such as water, gold and agricultural land, but also invested in some of the world’s largest companies as his analysis (presciently) indicated that passive investors would flock to these types of stocks due to index weighting rules.

More about Michael Burry

Burry has a self-diagnosed autism spectrum disorder, a relatively mild and socially functional disorder formerly known as Asperger’s syndrome. This may explain Burry’s interest and discipline in analyzing fundamentals in depth, regardless of what other investors focus on.

On the other hand, his extreme focus on fundamentals may lead to a tendency to go against the prevailing narrative too early, as highlighted in The Big Short.

3 Little-known things about Michael Burry:

• If you only have one eye, you have to look extra carefully. That might explain Michael Burry’s extreme attention to detail.
• Michael Burry is a great writer. This can be seen from his old forum posts, which also display his knowledge about a lot of things related to the stock market, valuation and accounting already at a young age.
• Although he made most money during the 2008-financial crisis, he already knew a lot about stocks before that, and more about accounting than the average investor will ever know. He was talking about the evilness of stock-based compensation (SBC) 20 years ago…. and it is still going on…. the biggest legal scam in human history, probably.  Much bigger than crypto. And yet people invest in tech stocks without positive operating cash flow without looking at the SBC. The reason they get away with it is because they get away with it as a category. Almost all tech companies commit this scam. At the expense of those who own the stock. Burry mentioned this 20+ years ago, many other people have mentioned it too, but the incentives are enormous, so this information doesn’t spread widely.

Read more about other value investors.