Michael Burry Net Worth

Introduction

Michael Burry’s full name was Michael James Burry.He was an American investor, former hedge fund manager, and neurology specialist. He got fame from his predictions of the housing bubble (a recurrent market bubble after a land boom, with rapid price increases to unsustainable levels, then dropping) and the mid-2000s financial crisis. Consequently, Burry became a key character in the book and film “The Big Short” (which depicts the events leading up to the housing market crash).

Early Life and Education

Burry was born and brought up in San Jose, California. While growing up he observed his interest in finance .Burry matriculated at Santa Teresa High School before enrolling at the University of California, Los Angeles (UCLA) and graduated with a bachelor’s degree in economics in 1995. He completed his studies at Vanderbilt University School of Medicine, where he earned his M.D. in 2000.

Career Beginnings

Burry had a successful career as a physician, but because of his keen interest in finance he was drawn towards the financial world after that he started his own hedge fund Scion Capital in 2000 ,while he part-time worked as a neurology resident.Burry’s interest in value investing, along with his innovative analytical approach, led to his extraordinary success in the years that followed.

Scion Capital and Success

Scion Capital was founded with an inheritance and family loans.He named it after one of his most liked novels, Terry Brooks’ The Scions of Shannara (1990). He soon generated huge profits for his investors. According to author Michael Lewis, “the S&P 500 fell 11.88% in his first full year, 2001.” Scion gained 55%.The S&P 500 lost 22.1% the following year, while Scion rose 16%. The stock market finally recovered in 2003, rising 28.69%, but Burry outperformed it, returning 50%. He was handling $600 million at the end of 2004 and turned money down.Burry achieved these results in part by shorting expensive tech equities at the top of the internet bubble.

Predicting the Housing Bubble

Burry’s most important prediction came in the mid-2000s, when he realised the housing market was in a harmful bubble. He identified risks linked with subprime mortgage bonds and collateralized debt obligations (CDOs) through meticulous analysis. Burry predicted that the housing market would ultimately crash, causing a larger financial crisis.

The Big Short

The Big Short is a 2015 film modification of best-selling author Michael Lewis’s book of the same name. Adam McKay cowrote and directed the film, which focuses on the lives of various American financial professionals, specially Burry, who predicted and benefited from the housing bubble’s growth and subsequent collapse in 2007 and 2008.

Post-Financial Crisis

Burry closed Scion Capital following the financial crisis in order to concentrate on personal investments and pursue other interests. He maintained a low profile, but his reputation as an experienced investor and his role in forecasting the crisis reinforced his position as one of the financial industry’s most influential figures.

Investments in Technology

Michael Burry has made substantial investments in the technology sector. One example is his early investment in GameStop, a struggling video game retailer. Burry saw the company’s potential for recovery and invested extensively, requesting attention to GameStop’s undervalued stocks. His efforts inspired  a retail investor movement and a short squeeze on the company, resulting in massive rewards for those who followed his lead.

Current Projects and Ventures

1. Stock Portfolio: Michael Burry manages a stock portfolio through his hedge fund, Scion Asset Management. The portfolio consists of a selection of stocks that Burry currently owns 1.
2. Scion Asset Management: Burry serves as the portfolio manager for Scion Asset Management, LLC. The firm has disclosed 21 total holdings in their latest SEC filings, with Michael Burry listed as the portfolio manager 2.
3. Focused Investment Strategy: Burry has recently concentrated his investments on just six stocks, which make up the entire 13F portfolio of Scion Asset Management. This focused approach reflects his current investment strategy 3.
4. Portfolio Value: The total value of Michael Burry’s portfolio managed by Scion Asset Management is $105 million. This figure represents the total amount invested in the portfolio 4.
5. Scion Capital Management: Burry’s previous hedge fund, Scion Capital Management, made headlines when he decided to dump his entire stock portfolio in the second quarter. This move occurred amidst market crash warnings and garnered significant attention 5.

Philanthropic Efforts

One specific organization that he has supported is the MIND Institute, where he serves as the Research Director2.

The MIND Institute conducts a comprehensive and multidisciplinary analysis of children with autism, known as the Autism Phenome. Burry’s involvement in this organization highlights his commitment to advancing the understanding of autism and improving the lives of individuals affected by it. Additionally, Burry has also supported a new private foundation focused on neurodiversity and employment in Washington State3.

This foundation aims to address the challenges faced by neurodiverse individuals in finding meaningful employment opportunities. Through his philanthropic efforts, Michael Burry demonstrates his dedication to making a positive impact in the field of autism research and education.

Frequently Asked Questions (FAQs)

What is Michael Burry’s current net worth?

As of April 2023, Burry’s net worth is estimated to be $1.2 billion.

How did Michael Burry predict the housing bubble?

To forecast the housing bubble, Michael Burry used a combination of mortgage bond data, historical housing market data, financial indicators of institutions, loan-level data, and credit rating agency behaviour. Burry was able to uncover the excessive risk-taking and unsustainable practises that eventually contributed to the housing market collapse by analysing these specific data sources and financial indicators.

What is the significance of credit default swaps?

Credit default swaps (CDS) are financial derivatives that protect investors against a certain entity’s default or credit risk, such as a firm or government. They are simply insurance contracts that allow investors to transfer the risk of default to another entity.

What impact did “The Big Short” have on Burry’s career?

“The Big Short” had an enormous effect on Michael Burry’s career. It raised his profile as a financial expert, allowed him to share his knowledge with a larger audience, and sparked crucial discussions concerning the financial industry. It demonstrated his distinct investment style as well as his ability to detect and capitalise on market possibilities. Burry rose to fame as a result, becoming a well-known personality in the financial industry.

The film not only highlighted Burry’s individual accomplishments, but it also helped to a better understanding of the events that led to the financial crisis.

How does Michael Burry choose his investments?

Michael Burry’s investment strategy involves focusing on the small/micro-cap space, prioritizing downside protection, investing in out-of-favor sectors, employing contrarian approaches, and isolating investments from market sentiment. These principles contribute to his success as an investor

What other books or movies feature Michael Burry?

Here is a list of books and movies that feature Michael Burry apart from “The Big Short”:

1. “The Almanack of Michael Burry: A Guide To Investing (Super Investors Series)” is a book written by Michael Burry himself1.
2. “Buffett: The Making of an American Capitalist” by Roger Lowenstein is a popular book that mentions Michael Burry2.

Has Michael Burry faced any controversies in his career?

Throughout his career, Michael Burry has faced several controversies, both within and beyond the financial world. One notable controversy arose when he challenged the Federal Reserve’s narrative that the recent spike in inflation is “transitory” and will fade as the economy recovers1.

What are some of the organizations supported by Burry’s philanthropy?

GuideStar Pro2, ProPublica3, and Foundation Directory4 and Foundation Directory5. These organizations provide resources and support to nonprofit organizations, helping them find grantmakers and manage their operations effectively.