The first mistake we make getting started is to carbon copy another successful investor’s approach to investing.
We first need to go through the process of learning the fundamental investment laws govening the buying and selling of stocks, in order to begin developing a sound investment approach that delivers consistent investment returns for years to come.
Otherwise, it is the equivalent of trying to navigating a pitch-black room you have never been in without a torch.
And, the Panda Agricultural & Water Fund published a report about Dr. Michael J. Burry’s investment philosophy & approach.
Which is a great read, it will help you see how Dr. Burry used the investment lessons from Benjamin Graham’s book Security Analysis to develop a personalised investment approach for himself.
Dr. Burry was played by Christian Bale in the movie the Big Short.
Hope you enjoy it.
Learning From Dr. Michael J. Burry's Investment Philosphy
Financial markets are rife with stories about big companies, banks and investment funds going bust or irredeemably going bankrupt, mind-boggling trades and hedge fund wizards making money from wild ideas. ‘The Big Short’, the film adaptation of Michael Lewis’s book, has reverted public attention to the subprime crisis and the strong conviction investing strategy. By watching this movie, not only did we, the Panda Agriculture & Water Fund team, rediscover the book, which we had read, it also prompted us to delve further into Dr. Burry’s investment philosophy. This document humbly seeks to be the most complete compilation of Dr. Michael J. Burry thoughts.
We hereby aim to reveal the ins and outs of a relatively unknown investment philosophy. This appeared as a necessity to us, in a hostile monetary environment in which central banks manipulate the value of money and create a strong ‘monetary illusion’ in financial assets, especially stocks, securities and commodities, among others.
In this document we have assembled Dr. Michael J. Burry's hedge fund track record, numerous investment cases, invaluable statements about general investment issues and all his operations -- buys, sells and shorts made before his time as a money manager.
Why is a compilation of Dr. Michael J. Burry’s investment philosophy necessary?
In science, knowledge is cumulative. In finance, however, it is cyclical, with market participants making the same mistakes over and over again. One of our commitments to the financial industry is to keep already-learned lessons alive in long-term collective memory.
We want to contribute by making financial knowledge less cyclical and more anti-fragile.
We are also interested in promoting Dr. Michael J. Burry's unorthodox value investing approach. When asked about our investment approach we usually say that our philosophy is 50% value and 50% global macro. When it comes to analyzing companies, we focus on critical value points, paying special attention to cash flow generation (something Dr. Burry also does). As portfolio managers however, we also look at the global environment and macroeconomic trends. In fact, one of the reasons for starting Panda was our having identified agriculture as one of the strongest macroeconomic trends in the coming decades.
Our intention is obviously not to take merit for other people’s work. Others have also made significant contributions to unravelling Dr. Burry's investment philosophy. We want thank those people in advance, starting with Michael Lewis, the author of The Big Short, a book that we highly recommend not only for telling Dr. Burry’s story but also for its accurate description of the financial industry’s guts and plots.
In a summary of Dr. Michael J. Burry's thoughts, Tren Griffin sets down twelve simple points that capture his vision. We are also indebted to Tariq Ali, who runs the Street Capitalist blog where we found an extremely interesting article entitled Learning from Michael Burry, which inspired us to write this essay.
Read the full report here.
Yours in investing
Adam C. Parris
P.S. To learn the investment laws of stock market investing, learn more on the webpage ‘Have You Given Up.’
Article by Searching For Value