Michael Burry Investment Strategy from 2000 MSN Money Forum
Michel Burry who famously shorted the Housing Market in 2006 (made famous by the movie The Big Short) used to write on MSN Money Forum when he was managing his hedgefund, Scion Capital, in 2000. He talked about his investment strategy and shared some of his ideas.
Michael Burry says that he invests in unpopular companies that look like road kills, wait for them to polish a bit, and then sell them. This is something he recently did with GameStop $GME . He saw the fundamentals, invested in the company in 2019, pressured the company to buyback shares leading to the Short Squeeze that we saw earlier this year. This is similar to what Warren Buffett $BRK.B talks about but instead of the word roadkills, you will hear the word cigarbutts. Michael Burry is a value investor.
Michael Burry's weapon of choice is research and the book that he recommends is Security Analysis by Benjamin Graham and David Dodd. This 87-year-old book is still the best book about investing today in my opinion. Michael Burry also emphasizes the importance of the Margin of Safety. He also talks about focusing on the total loss of capital rather than volatility. He likes to have a portfolio with a low market correlation $SPX500 and doesn't really care about macroeconomics. Sometimes, he also does arbitrage.
One of the things that differentiate him from Warren Buffett and other value investors, including myself, is the high turnover rate of his portfolio. He also uses a little technical analysis.