What’s The Net Worth of Michael Burry, The Investor Who Predicted The 2008 Housing Market Crash?

Michael Burry's net worth

Michael Burry, a US physician, investor, and hedge fund manager with a $300 million net worth (per Celebrity Net Worth), gained fame as the founder of Scion Capital LLC. He accurately predicted the 2008 real estate market crash, resulting in substantial wealth. Scion Capital LLC, established in 2001, achieved a 55% return by making strategic bets against tech stocks before the internet bubble. By 2004, Burry was managing assets exceeding $600 million.

Michael Burry's sources of income

Subprime mortgage bet

Michael Burry rose to prominence after making a $1 billion bet against the subprime mortgage industry before the 2008 Great Recession. He convinced Goldman Sachs to sell him "credit default swaps" that bet against subprime deals, a unique move for a relatively small fund manager. He initiated these bets in 2005, which initially resulted in losses. Before the real estate market crisis, Scion had to make regular payments to cover these swaps, leading to investor dissatisfaction and withdrawal requests.

Burry's prediction eventually proved correct, yielding $700 million in returns for his investors and a personal gain of $100 million. The event was chronicled by Michael Lewis in his bestseller "The Big Short: Inside the Doomsday Machine", which was adopted as a film in 2015. Christian Bale played him in "The Big Short", directed by Adam McKay.

In an April 2010 op-ed in The New York Times, Burry argued that anyone closely following the financial markets from 2003 to 2005 could have easily identified the risks associated with the subprime markets.

GameStop

Another noteworthy investment by Burry involved the video game retailer GameStop. In March 2020, he disclosed that he had purchased 3 million shares of GameStop. He then urged the company's management for changes through an open letter. Over the following six months, he gradually reduced his stake to 1.7 million shares. In January 2021, GameStop's stock price experienced a remarkable surge, largely due to a coordinated effort by Reddit users. On January 28, 2021, GameStop briefly reached $480 per share. At that level, Michael's 1.7 million shares would have been valued at $816 million. He most likely acquired his stake in 2020 at an average cost of $4 per share.

Investment career

While at Stanford, Burry ventured into financial investing, excelling in value investing. His stock-picking abilities garnered attention from major players like White Mountains Insurance Group, Vanguard, and investors like Joel Greenblatt. Burry's investment philosophy, heavily influenced by the 1934 book "Security Analysis," centers on the concept of margin of safety. In the late 2000s, Burry founded Scion Capital, using a combination of inheritance and family loans as capital. His investment acumen quickly paid off with a reported 55% gain in his first full year in 2001 while the S&P 500 saw an 11.88% drop. He continued outperforming the market in subsequent years, achieving a 50% increase in investments in 2003 by shorting overvalued tech stocks. By the end of 2004, he was managing a portfolio of roughly $600 million.

In 2013, Burry relaunched his hedge fund as Scion Asset Management, and he filed reports as an exempt reporting adviser. His focus shifted toward investments in gold, water, and farmland. Additionally, his fund made significant investments in tech giants like Facebook and Google's parent company, Alphabet Inc. Towards the end of 2020, Burry took short positions on Tesla, anticipating a collapse similar to the housing bubble. He is said to hold put options on over 800,000 Tesla shares. Burry also reportedly holds put options on nearly $31 million shares in ARK Investment Management.

Michael Burry's personal life

Michael Burry, born on June 19, 1971, in San Jose, California, faced a significant health challenge at the age of two when he lost his left eye to retinoblastoma. He has used an artificial eye ever since. He currently lives in Saratoga, California, with his wife and son. His son was diagnosed with Asperger syndrome, and upon researching the disorder, Burry has contemplated the possibility of having it himself.

FAQs

How much did Michael Burry make in "The Big Short"?

Michael Burry, the central character in "The Big Short" made $100 million for himself and $725 million for his investors by shorting market-based mortgage-backed securities and accurately predicting the 2007 housing.

What happened to Michael Burry?

Following the closure of Scion Capital in 2008, Burry reopened the hedge fund but rebranded it as Scion Asset Management in 2013 and appointed himself the manager.

What stocks is Michael Burry buying?

Burry is buying stocks like Warner Bros. Discovery, Inc., Signet Jewelers Limited, Vital Energy, Inc., Stellantis N.V., and MGM Resorts International.