What is Michael Burry's Net Worth?
Michael Burry is an American physician, investor and hedge fund manager who has a net worth of $300 million. Burry became widely-known as the founder of Scion Capital LLC. Through Scion, he correctly predicted the 2008 real estate market crash, earning a fortune in the process.
Burry was portrayed by Christian Bale in the 2015 film "The Big Short". After launching Scion Capital LLC in 2001, the fund saw a 55% return thanks to wise bets against tech stocks ahead of the internet bubble. By 2004 he had more than $600 million worth of assets under management.
Subprime Mortgage Bet
Michael became famous after it was revealed that he made a $1 billion bet against the subprime mortgage industry ahead of the 2008 Great Recession. Burry actually went to Goldman Sachs and persuaded the financial firm to sell him "credit default swaps" that bet against subprime deals. It was a highly unusual move for such a relatively small fund manager. He began placing bets in 2005. The bet was a loser for a long time. During the period before the real estate market burst, Scion had to make regular payments to cover his swaps. This capital outlay caused his investors to revolt and demand their money back.
Burry was eventually correct and his fund ultimately earned $700 million for his investors. He earned $100 million personally.
In an April 2010 op-ed piece for The New York Times Burry argued that anyone who carefully studied the financial markets from 2003 to 2005 could have easily recognized the risk in the subprime markets.
GameStop
Another infamous Burry bet has been video game retailer GameStop. In March 2020 Burry revealed he had acquired 3 million shares of GameStop. He then prodded the company's managers with an open letter demanding change. Over the next six months he reduced his position down to 1.7 million shares.
In January 2021, GameStop's share price skyrocketed thanks largely to a coordinated effort of Reddit users. On January 28, 2021, GameStop briefly hit $480 a share. At that level Michael's 1.7 million shares would have been worth $816 million. He likely paid an average of $4 a share when he acquired his stake in 2020.
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Early Life and Education
Michael Burry was born on June 19, 1971 in San Jose, California. When he was two years old, he lost his left eye to retinoblastoma, and has had an artificial eye ever since. As a teen, Burry went to Santa Teresa High School. Later, he enrolled at the University of California, Los Angeles, where he studied economics and pre-med. Burry subsequently obtained his M.D. from the Vanderbilt University School of Medicine, and began but did not complete a residency in neurology at Stanford University Medical Center. Although he doesn't practice, Burry has kept his license active with the Medical Board of California.
Start of Investment Career
While off duty during his time at Stanford, Burry worked on financial investing, and became particularly successful in value investing. He did so well with his stock picks that he garnered the attention of companies such as White Mountains Insurance Group and Vanguard, as well as major investors such as Joel Greenblatt. Burry has said that his investment style is based on the 1934 book "Security Analysis," and that all of his stock picking is entirely rooted in the concept of margin of safety.
In late 2000, Burry founded his own hedge fund called Scion Capital, which was funded by both an inheritance and loans from his family. Almost immediately, he was earning enormous profits for his investors. In his first full year in 2001, he was reportedly up 55% while the S&P 500 fell 11.88%. The S&P 500 fell again the next year while Burry once again was up.
In 2003, he beat the market again with his investments rising by 50%. To achieve these returns, Burry used a strategy of shorting overvalued tech stocks. By the end of 2004, he was managing around $600 million.
Subprime Market
Burry began focusing on the subprime market in 2005. Using his own analysis of mortgage lending practices over the previous two years, he correctly foresaw that the real estate bubble would collapse within as early as 2007. He did research on the values of residential real estate, and predicted that subprime mortgages and the bonds based on them would start losing value when the original rates were replaced by far higher rates. Consequently, Burry shorted the market by persuading Goldman Sachs and other big investment firms to sell him credit default swaps against subprime deals that were vulnerable.
While he was making payments toward his credit default swaps, Burry experienced a revolt among his investors, many of whom became nervous that his predictions would prove inaccurate. Some withdrew their capital out of caution. However, Burry's predictions eventually panned out, and he earned a personal profit of $100 million and a profit of over $700 million for his remaining investors. Moreover, Scion Capital had returns of 489.34% between 2000 and 2008.
By April of 2008, Burry had liquidated his credit default swap shorts, and so did not benefit from the 2008 and 2009 economic bailouts. He then liquidated his company to focus on personal investments.
Further Investing Career
Burry reopened his hedge fund as Scion Asset Management in 2013, filing reports as an exempt reporting adviser. Subsequently, he turned his primary attention to investing in gold, water, and farm land. His fund has also made large investments in Facebook and Google parent company Alphabet Inc.
In late 2020, Burry initiated short positions on Tesla, predicting that the company would collapse as the housing bubble did. He reportedly holds put options on more than 800,000 Tesla shares. Burry also reportedly holds put options on nearly $31 million of the firm ARK Investment Management.
In Popular Culture
Burry has been written about and depicted in books and on film. In 2009, he was talked about in journalist Gregory Zuckerman's non-fiction book "The Greatest Trade Ever," which primarily focused on hedge fund manager John Paulson's role in the subprime mortgage crisis.
Burry had a bigger part as one of the subjects of Michael Lewis' 2010 non-fiction book "The Big Short: Inside the Doomsday Machine," which chronicled the build-up to the housing bubble collapse and covered the main players who profited from it by betting against the market. The book was adapted into a 2015 film directed by Adam McKay and starring Brad Pitt, Ryan Gosling, Steve Carell, and Christian Bale as Burry. The film received widespread acclaim, receiving five Academy Award nominations and a win for Best Adapted Screenplay. Bale was also nominated for Best Supporting Actor for his portrayal of Burry.
Personal Life
Burry resides in Saratoga, California with his wife and son. His son was diagnosed with Asperger syndrome; after reading up on the disorder, Burry believes he might have it himself.
