Michael Burry: What Happened To You?

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This article is really just a short question for the audience that I have. I am perplexed by recent comments that Michael Burry made in an exclusive interview with Bloomberg. In the interview Burry was asked what he thought was a good investment right now.

Here is a brief quote from the Bloomberg article:

Michael Burry, the former hedge-fund manager who predicted the housing market’s plunge, said he is investing in farmable land, small technology companies and gold as he hunts original ideas and braces for a weaker dollar.

“I believe that agriculture land — productive agricultural land with water on site — will be very valuable in the future,” Burry, 39, said in a Bloomberg Television interview scheduled for broadcast this morning in New York. “I’ve put a good amount of money into that.”

I was shocked by this statement. Burry came to fame as a result of his featured appearance in the bestselling book on the financial crisis The Big Short by Michael Lewis.

Whatever the merits of gold are, this seems more like a macro call than an investment from a value investor. Basically my question is this is an interesting play by Burry. Burry is a pure value investor and as described. He had a fabulous record in equities before turning to shorting the subprime. Burry always looks for cheap securities stocks and credit instruments when he was buying protection when they were dirt cheap before the market realized how ridiculously low priced CDSs and CDOs were. With gold it is hard to estimate an intrinsic value however it seems odd that Burry is buring gold after it has gone up something like 500% over the past decade.

Any answers?

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3 Comments on "Michael Burry: What Happened To You?"

  1. Not everyone gets it right all the time. No investor is infallible—thus the importance of having a margin-of-safety.

    People turn to gold in times of uncertainty. As soon as things become more certain the price will drop. All the gold stocks trade at high PE ratios. I personally think his call on gold will come back to haunt him if he’s in it for the long haul.

  2. Michael Burry in a letter … fairwell letter I should say mentions.. Hemp as the next big thing. He goes into all its properties and things it can become….That is why he is thinking land maybe… Also land is the cheapest thing going right now. It is cheap to buy and when housing turns around he will build houses on the property too. If hemp still hasnt caught on. Double angle play if you will.
    Small tech that makes sense. Phones and Ipads are computers and tech is the wave. Not a bubble.
    And so does gold. As he believes the dollar is weaking.
    Although I believe gold is a bubble in one respect.
    It is doing what housing did. So I am very bearish on gold.
    In my store I buy as much in the short term as I can get. And turn it quickly. So gold priceing just means more business to me.
    Michael is brillant. And he doesnt want to be in the main stream.
    Michael is a classic investor who has shun the investment community for reasons of values and ideals.
    He is a man of conviction an courage surrounded by the opposite and it irks him.
    He is also not a people person… he is a lone wolf type.
    And doesnt like alot of questions or even to be in the spot light.
    He prefers to just be an investor. And do what he loves.
    Research and being rewarded for it.
    The reason I think this is all true is I have read alot of what he said on his website and also his investor letters.

    And his relationship with greenblatt and the way he handled greenblatt when there was alot of tension between them… and in the end. He still gave Greenblatt and his investors alot of money. Based on his skill.
    This to me shows me who Michael is and how he thinks.
    He is an extraordinary individual with a high sense of morality and values I admire.
    He is the kinda of fellow I would trust and follow.
    Just like warren Buffet , Charlie , Li Lu, Sokol ,
    He is that kind of investment mind.

  3. Farmland is apparently hot right now. Check this out: http://articles.latimes.com/2010/sep/19/business/la-fi-farm-land-grab-20100919

    It seems rather strange that Dr. Burry would make a macro call, but if I remember correctly, he was relatively hesitant while in giving it in the interview. Even stranger that he would invest in something that is considered to be “hot”. Maybe he knows something we have all missed or his ego has gotten to him and he will crash and burn. I have no idea. All I know is that I will continue to do my own bottom-up research, err on the side of conservatism and be patient.

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