Monday, June 4, 2012

Dr. Michael Burry

Thank you for visiting. Dr. Michael Burry currently runs Scion Capital Group, LLC, a private investment firm. Dr. Burry is not accepting outside investors. If you have an interest, Dr. Burry has made the earliest investor reports of Scion Capital, LLC available.

2010 NEWS: 

Dr. Burry was interviewed by Bloomberg on Monday, September 6, 2010
Dr. Burry penned an op/ed for the New York Times Sunday April 4, 2010
Dr. Burry appeared on 60 Minutes Sunday March 14th, 2010
Dr. Burry’s activities with Scion Capital are portrayed in Michael Lewis’s 2010 bestseller, The Big Short.
An excerpt is available in the April 2010 issue of Vanity Fair magazine, and .

Dr. Burry has often been asked often whether he  can recommend another money manager.  Dr. Burry suggests accredited and qualified investors contact Bo Shan (, a former analyst at Scion Capital and an investor in Dr. Burry’s mold.  Dr. Burry has no interest, financial or otherwise, in Bo’s firm. Dr. Burry is simply an investor in Bo’s fund and strongly believes in his abilities.
Recently, allegations have been made that certain asset managers who benefited from the implosion of the housing bubble, in order to expand the size of their short bets, also participated in structuring the synthetic asset backed securitization collateralized debt obligations (synthetic ABS CDOs) that Wall Street banks sold to investors.  Dr. Burry, Scion Capital, and the funds managed by Scion Capital did not participate in any manner in the organization, structuring or trading of such synthetic ABS CDOs.  Dr. Burry’s focus was on credit default swaps on residential mortgage-backed securities (RMBS CDS), a different type of instrument, and Dr. Burry did not coordinate his actions or those of his funds with the synthetic ABS CDO activity of any Wall Street bank.  Moreover, Dr. Burry’s purchase of RMBS CDS for his funds were focused on RMBS created in 2005 and very early 2006, well before the explosion of the market interest/activity in synthetic ABS CDOs from 2006 through 2007.  


Dr. Burry believed the financial system as we know it would collapse in 2008, as the contagion from the subprime meltdown in 2007 would not be contained. He also believed the government would intervene, but that any possible government intervention would have uncertain effect.  As a result, Dr. Burry liquidated his credit default swap short positions by April of 2008, and he did not benefit at all from the taxpayer-funded bailouts of 2008 and 2009. Not one penny. 

During 2005 and 2006, Dr. Burry had terrific difficulty convincing his investors, business partners and even some of his employees of the financial armageddon in the offing.  In fact, despite his impassioned pleas, a close family member became a real estate agent during that time.  Though Dr. Burry freely shared his thesis with anyone that would listen, including traders at Goldman Sachs, Deutsche Bank and Bank of America, he quickly found no one wanted to listen.  Further, Dr. Burry repeatedly wrote that he had no faith that the SEC, the Federal Reserve, or any other branch of government, least of all Congress, would act to keep the housing bubble from expanding.  In fact, Dr. Burry felt the government was absolutely complicit in enabling the housing bubble.  By late 2006, Dr. Burry faced an investor revolt on the basis of his then-$8.4 billion bet that not only mortgages would go bad but that many financial firms, including AIG, Countrywide, and Washington Mutual would fail.  On November 7th, 2006, Dr. Burry produced a document intended to quiet the anger and to expand understanding of the position among his investor base and among his business partners.  This document, which reiterated much of what Dr. Burry had already discussed in his letters to investors as well as in conversations with investors and would years later be considered for an appendix to Michael Lewis's book "The Big Short," had no effect. In fact, he was forced to liquidate billions of dollars of his short positions in order to meet investor withdrawals in 2006.  Unfortunately, there was nothing Dr. Burry could have done to prevent the crisis from happening.  Whatever influence he holds today for having been proven right was simply not present from 2005 through 2007. Dr. Burry has made that November 2006 document available. As a review, Dr. Burry has also made available Scion Capital's 1Q 2008 letter to investors. Dated April 28, 2008, this letter contemplates real and imagined black swans.

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