Michael James Burry is an American investor, hedge fund manager, and physician. He founded the hedge fund Scion Capital, which he ran from 2000 until 2008, before closing the firm to focus on his own personal investments. Burry is best known for being the first investor to foresee and profit substantially from the subprime mortgage crisis that occurred between 2007 and 2010.
Burry started the (now defunct) hedge fund Scion Capital, funded by an inheritance and loans from his family. The company was named after Terry Brooks' The Scions of Shannara (1990), one of his favorite novels.
Burry quickly earned extraordinary profits for his investors. According to the author Michael Lewis, "in his first full year, 2001, the S&P 500 fell 11.88%. Scion was up 55%. Burry was able to achieve these returns by shorting overvalued tech stocks at the peak of the internet bubble (i.e. investing to profit if the value of the stocks fell, rather than rose). The next year, the S&P 500 fell again, by 22.1%, and yet Scion was up again: 16%. The next year, 2003, the stock market finally turned around and rose 28.69%, but Mike Burry beat it again—his investments rose by 50%. By the end of 2004, Mike Burry was managing $600 million and turning money away."
In 2005, Burry started to focus on the subprime market. Through his analysis of mortgage lending practices in 2003 and 2004, he correctly predicted that the real estate bubble would collapse as early as 2007. Burry's research on the values of residential real estate convinced him that subprime mortgages, especially those with "teaser" rates, and the bonds based on these mortgages, would begin losing value when the original rates were replaced by much higher rates, often in as little as two years after initiation. This conclusion led Burry to short the market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against subprime deals he saw as vulnerable. This analysis proved correct, and Burry profited accordingly.
Well, what did he do to deserve an SEC ambush?
I thought he closed Scion Capital?
My opinion of Twitter and Facebook is not favorable. I don’t have an account with either one, and from what I see are a vanity message board for individuals and a megaphone for politicians. No thanks.
I have seen that movie twice it is well worth watching.