Born In: San Jose, California, United States
Michael James Burry is a well-known American investor and hedge fund manager, best known for correctly predicting and profiting from the 2007 subprime mortgage crisis. Possibly born with Asperger’s syndrome, he later lost his left eye to retinoblastoma and grew up introvert without much socialization. While still in his grade school, he was introduced to stock tables by his father, who did not forget to add that stock markets were a crooked place and that he should never trust it. However, Michael found the concept quiet fascinating; but did not take any active interest in it until he started studying medicine. Even then, he found it less attractive than value investing, he eventually started to post on message board of the newly founded Silicon Investor. But it was only after he completed his residency in neurology that he was able to get hold of enough funds to start his hedge fund company and eventually made huge profit from it.
Also Known As: Michael James Burry
Born Country: United States
Height: 1.70 m
Diseases & Disabilities: Asperger’s Syndrome
U.S. State: California
education: Vanderbilt University School of Medicine, Santa Teresa High School, University of California, Los Angeles
Michael James Burry was born on June 19, 1971, in the city of San Jose, located in the US state of California.
When Michael was two years old, he was detected with retinoblastoma, which cost him his left eye. Although he has been on prosthetic eye since then, life was not at all easy for him.
Other kids did not allow him to forget his glass eye, calling him names, cajoling him to take it out from the socket. While talking, his left eye did not line up with whomever he was talking to and if he tried to look in the eye, he would miss out on the conversation.
Although he was never diagnosed, it is believed that he also had Asperger’s syndrome, which is characterized by significant difficulties in social interaction and nonverbal communication. As a result, he soon learned to do without friends.
In time, he was enrolled at Santa Teresa High School. Although he was ferociously competitive with a well-built body, he never went for team sports because they were mostly ball games, unsuitable for persons with poor depth perception and limited peripheral vision. Instead, he went for swimming.
On graduating from school, he entered University of California, Los Angeles with economics and pre-med, two vastly different subjects.
In 1993, Michael Burry graduated from UCLA with a degree in economics and joined Vanderbilt University School of Medicine. Concurrently with studying medicine, he started studying stock market; but failed to discover any sense in the talks and graphs provided by market pros.
Contrarily, he found value investing more interesting. Although he did not have much money to invest, he continued with his passion. He joined Silicon Investor, the first website to evaluate the stocks of high-tech companies in November 1996, and wrote 3,304 posts till 2000 on its message board.
In 1997, he earned his MD and in 1998 entered Stanford University Hospital to do his residency in neurology. Concurrently, he continued with his passion, basing his investment style on traditional understanding of value, giving emphasis on the margin of safety. Sometime now, he also opened his personal blog.
Although initially the investors were skeptical about him because of his medical background, his posts soon started attracting attention and began to win their confidence. Among those who took note of him were investors like Joel Greenblatt and companies like Vanguard, and White Mountains Insurance Group etc
By 2000, he realized that people are actually making money by following his posts. Concurrently, he began to feel uneasy about his profession in medicine because of his physical constraint and introvert nature.
Also in 2000, his father passed away after a misdiagnosis, entitling them to receive a small settlement. The money he thus received encouraged him to give up medicine and concentrate on value investment. His mother too provided $20,000 from her settlement while his three brothers kicked in $10,000 each.
In November 2000, Michael Burry founded a hedge fund called Scion Capital in San Jose. Shortly, he received a call from Gotham Capital, owned by Joel Greenblatt. They offered to buy 25% of his company’s capital for one million dollars after taxes, an offer he eagerly accepted.
Next in the line was an insurance holding company called White Mountain, which was controlled by Jack Byrne, a member of Warren Buffet’s inner circle. They also invested a hefty sum in his company, helping him to further consolidate his position.
In general, hedge fund manager took 2% of assets off the top as their commission. But Burry began charging investors its actual expenses only, which typically ran well below 1% of the assets. Therefore, to get paid, he had to make investors’ money grow, which he did quite comfortably.
In 2001, while the market was at the peak of the internet bubble and better-known funds began to register losses, he began shorting overvalued tech stocks, taking Scion Capital up by 55%. The upward trend continued in 2002, enhancing his fund value by 16% and in 2003 by 50%.
By end of 2004, Scion Capital was managing a 600 million dollar fund, which continued to grow even when the market took a downward turn in 2005. In October 2006, Gotham's investment in the funds managed by Scion reached $100 million.
By 2004, Michael Burry had developed an interest in the bond market, studying how money got borrowed and lent in America. He also studied mortgage lending practices, analyzing them correctly to predict that the real estate bubble would collapse by 2007.
In 2005, he decided to short the subprime market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against vulnerable subprime deals. On May 19, he made his first deal, buying $60 million of credit-default swaps from Deutsche Bank, $10 million each on six different bonds.
By 2006, Gotham Capital and some other investors demanded that their money is returned. However, Burry used a provision in his prospectus to block withdrawals (known in their parlance as side pocket) between 50 and 55 percent of Greenblatt's investment. However, his analysis soon proved correct.
On August 31, 2007, Burry lifted the side pocket and began to sell his credit default swaps, which were now a profitable bet in the housing market crisis. Eventually, he made a personal profit of $100 million and for his remaining investors he made more than $700 million profit.
In 2009, he closed down his company in order to concentrate on personal investment, eventually reopening another hedge fund called Scion Asset Management in 2013. This time, he focused much of his attention on investing in water, gold, and farmland.
By 2015-2016, his fund holdings exceeded $100 million. Continuing to grow, the fund is shown to hold numerous large-cap stocks. As of 2022, he is believed to have an estimated net worth of $300 million USD.
Michael Burry has been married twice. His first wife was of Korean descent, whose name is not known. May be because she lived in another city, they eventually divorced.
His second wife is of Vietnamese-American descent, whom he met on the Match.com and is still married to. Although her name has not being disclosed, we do know that they have a son called Nicholas, who like him suffers from Asperger’s syndrome.
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