As opposed to whom? Some doofus posting anonymously on an internet message board?
The guy has seen and done; he bet big, bet smart, and made a crapload of money. He's the least dubious source of information, and I found his encouragement to the graduates he addressed genuine and useful.
Of course, his honesty got him audited, and investigated by the FBI. Integrity is subversion in the land of the corrupt.
Gambling is not a matter of risk, it is a matter of odds. A good investor manages both, as Dr. Burry did, but I don't expect very many to be able to understand that—note the grief he got from his clients.
Since you understand neither gambling nor investing, I support your decision to leave both to the experts. Carry on.
A great but long article about Dr Burry can be found at the link below .
I think it is quite wrong to see him as a gambler , rather he is a
value investor .
The article starts in slow almost boring format but gradually peers
deep in to his struggle for success .
Very inspirational stuff if you are or aspire to be a successful investor
or money manager .
When he had nothing ....
The exchange went something like this: “We’d like to give you a million dollars.
” “Excuse me?” “We want to buy a quarter of your new hedge fund. For a million
dollars.” “You do?” “Yes. We’re offering a million dollars.” “After tax!”
Somehow Burry had it in his mind that one day he wanted to be worth a million dollars,
after tax. At any rate, he’d just blurted that last bit out before he fully understood
what they were after. And they gave it to him! At that moment, on the basis of what
he’d written on his blog, he went from being an indebted medical resident with a
net worth of minus $105,000 to a millionaire with a few outstanding loans. Burry didn’t
know it, but it was the first time Joel Greenblatt had done such a thing. “He was just
obviously this brilliant guy, and there aren’t that many of them,” says Greenblatt.
Right from the start, Scion Capital was madly, almost comically successful.
In his first full year, 2001, the S&P 500 fell 11.88 percent. Scion was up 55 percent.
The next year, the S&P 500 fell again, by 22.1 percent, and yet Scion was up again:
16 percent. The next year, 2003, the stock market finally turned around and rose
28.69 percent, but Mike Burry beat it again—his investments rose by 50 percent.
By the end of 2004, Mike Burry was managing $600 million and turning money away.
By the middle of 2005, over a period in which the broad stock-market index had fallen
by 6.84 percent, Burry’s fund was up 242 percent, and he was turning away investors.
He used no leverage and avoided shorting stocks. He was doing nothing more
promising than buying common stocks and nothing more complicated than
sitting in a room reading financial statements.
Over MBS credit default swaps there fascinating interactions with
Goldman Sachs , here is an example .....
He set out to cherry-pick the absolute worst ones and was a bit worried that the investment
banks would catch on to just how much he knew about specific mortgage bonds,
and adjust their prices.
Once again they shocked and delighted him: Goldman Sachs e-mailed him a great l
Long list of crappy mortgage bonds to choose from. “This was shocking to me, actually,
” he says. “They were all priced according to the lowest rating from one of the big-three
ratings agencies.” He could pick from the list without alerting them to the depth of his knowledge
It was as if you could buy flood insurance on the house in the valley for the same price as
flood insurance on the house on the mountaintop.