Who is Michael Burry?
Michael Burry is a legendary investor & hedge fund manager. He founded the hedge fund Scion Capital, which he ran from 2000 until 2008.
Following the Financial Crisis of 2008, he closed the firm to focus on his own personal investments.
Michael Burry Big Short. Motivation2invest Cartoon.
Which Stocks is Michael Burry Shorting?
Burry has a Major short position against Tesla stock.
He has long put’s against 800,100 shares of Tesla worth approximately $534 million, according to a filing with the U.S. Securities and Exchange Commission.
I previously covered Robinhood Stock before the IPO and stated “I like the company alot but I would wait for after the IPO to buy”
Burry also has a Major Short position against Ark Invest, Michael Burry has taken out a $31m position Cathie woods Disruptive Innovation ETF.
According to a 13F regulatory filing (2021, Q2), the ‘Big Short’ investor’s Scion Asset Management has invested into put contracts against 235,000 shares of the Ark Innovation ETF (ARKK).
What is Michael Burry’s Net Worth?
Michael Burry is one of the most famous & successful money managers in history & has a personal Net worth of over $300 Million. However, despite many misconceptions he is currently not a Billionaire officially yet.
Michael Burry – The Big Short Summary:
Michael Burry is widely known for predicting the 2008 Financial Crisis & Housing bubble, popularised in the Oscar Winning Movie “The Big Short”(2015).
In which he had credit default swap short positions against “Mortgage Backed Securities”.
What are Mortgage Backed Securities?
Mortgage Backed Securities (MBS) are a collection of Home loan mortgages compiled together to create an investment security.
The idea between these securities is risk was “supposed” to be diversified. However, many of the loans inside these mortgage Backed securities (MBS) were given to many home owners with bad credit & even no job!
These were called “NINJA loans” “No Income No Job” . However, they were still rated AAA (Investment grade) by many credit agencies!!
Mortgage Backed Securities explained simply. Source: Corporatefinanceinstitute.com
Michael burry saw that ultimately fundamentals would bring the truth about the real value of these securities & many would plummet to zero!
He was right, This was the 2008 Financial Crisis, Housing Bubble which resulted in the collapse of Lehman brothers investment bank & a major stock market crash!
Best Scenes from The Big Short?
The Big Short movie is known for explaining complex financial terms in unconventional methods.
Popular movie scenes Include, the hilarious “Jenga CDO scene” & Celebrity Chef Anthony Bourdain Fish Soup scene.
These movie scenes were used to explain a Collateralized Debt Obligation (CDO) , a synthetic investment product which represents different loans bundled together and sold by the lender.
Big Short Movie Clip: Margot Robbie Explains Mortgage backed securities.
The idea behind a CDO is that the number of loans bundled together diversifies the risk for investors.
However, this can be taken to extreme levels with various bad loans or “bad Ingredients” bundled together in an Investment grade (highest Rated) instrument.
The wide spread trading of these securities with major unknown default risk was one of the main causes of the sub prime mortgage crisis of 2007.
Are all Mortgage Backed Securities Collateralized Debt Obligations?
Mortgage-backed securities (MBS) and collateralized debt obligations (CDOs) two very similar but technically different financial instruments.
The key difference between the two lies in what these assets are. MBS, as their name implies, are made up of mortgages home loans bought from the banks that issued them.
However, CDOs are much broader: They may contain corporate loans, auto loans, leases, credit card debt and of course mortgages.
Who played Michael Burry in The Big Short?
In the blockbuster Financial Movie, “The Big Short” (2015), Christian Bale played Michael Burry as the eccentric Hedge Fund Manager which made a “Big Short” bet against the US Housing Market.
Caption: Christian Bale as Michael Burry in the Oscar winning movie, the Big short)
The Big Short Cast also includes, major Hollywood talent such as; Steve Carell, Ryan Gosling, and Brad Pitt.
How much did Michael Burry make in the big short?
Did Michael Burry Get Paid? Yes, he made $100 million for himself and $700 million for his hedge fund investors,when his bet against the housing market paid off.
