It's no secret @michaeljburry is my investing hero.
Here's my 3 favorite Burry resources:
- MSN Message Boards: bit.ly/2S2PtVJ
- Scion Capital Letters: bit.ly/2RE48I1
- Panda Water & Ag Fund: bit.ly/3e5ZavZ
Let's look at his strategy
[THREAD]
Here's my 3 favorite Burry resources:
- MSN Message Boards: bit.ly/2S2PtVJ
- Scion Capital Letters: bit.ly/2RE48I1
- Panda Water & Ag Fund: bit.ly/3e5ZavZ
Let's look at his strategy
[THREAD]
1) A Simple Investing Strategy
Burry's strategy is simple: He buys stocks when they look like roadkill and sells them when they've been "polished up a bit."
Where To Find Roadkill:
- 52 week lows
- All-time lows
- Post-bankruptcy
How To Find: bit.ly/2ymmjuZ
Burry's strategy is simple: He buys stocks when they look like roadkill and sells them when they've been "polished up a bit."
Where To Find Roadkill:
- 52 week lows
- All-time lows
- Post-bankruptcy
How To Find: bit.ly/2ymmjuZ
2) Burry's Weapon: Research
Burry *must* understand a company's value before investing a dime.
100% of his strategy is based on the concept of Margin of Safety.
Important: Burry took Graham's teachings and made them his own!
Graham's Teachings: catdir.loc.gov/catdir/samples…
Burry *must* understand a company's value before investing a dime.
100% of his strategy is based on the concept of Margin of Safety.
Important: Burry took Graham's teachings and made them his own!
Graham's Teachings: catdir.loc.gov/catdir/samples…
3) No-Limits Approach To Stock Selection
- He invests in micro-caps as easily as mega-caps.
- He isn't afraid of tech.
- Sheer, outrageous value is enough for him.
Prefers: Babies thrown out with bathwater (out of favor industries)
- He invests in micro-caps as easily as mega-caps.
- He isn't afraid of tech.
- Sheer, outrageous value is enough for him.
Prefers: Babies thrown out with bathwater (out of favor industries)
4) Burry's Thoughts on Valuation & Screening
- Focus on free cash flow & Enterprise Value
- Ignores Price/Earnings Ratio
- ROE is deceptive and dangerous
- Prefers minimal debt
- Screens on EV/EBITDA (High-level screen)
- Focus on free cash flow & Enterprise Value
- Ignores Price/Earnings Ratio
- ROE is deceptive and dangerous
- Prefers minimal debt
- Screens on EV/EBITDA (High-level screen)
5) Types Of Businesses Burry Likes To Own
Burry's portfolio reminds me of the Buffett Partnership days:
- Rare birds: asset plays, net-nets, arbitrage
Mixed with...
- Blue-chips: Moats, competitive advantages, etc.
Burry's portfolio reminds me of the Buffett Partnership days:
- Rare birds: asset plays, net-nets, arbitrage
Mixed with...
- Blue-chips: Moats, competitive advantages, etc.
6) Portfolio Construction
- Burry prefers 12-18 stocks at any given period
- Tends to be fully invested
- 12-18 positions smooths out volatility (which ISN'T risk)
Burry: "But you see, I have this heartburn problem anddon't need theextra stress."
- Burry prefers 12-18 stocks at any given period
- Tends to be fully invested
- 12-18 positions smooths out volatility (which ISN'T risk)
Burry: "But you see, I have this heartburn problem anddon't need theextra stress."
7) When To Buy: Barebones Technical Analysis
- Prefers to buy w/in 10-15% of a 52wk low that has shown itself to have support
- If a stock breaks a new low (except for rare birds), most cases Burry cuts for a small loss
- Cutting losses saves from one pos. blowing up portfolio
- Prefers to buy w/in 10-15% of a 52wk low that has shown itself to have support
- If a stock breaks a new low (except for rare birds), most cases Burry cuts for a small loss
- Cutting losses saves from one pos. blowing up portfolio
8) Investing: The Scientific Art
- To Burry, investing isn't a science or an art, but a combination of the two
"The road of empiric discovery towards interesting stocks will lead to rewards and profits that go beyond mere money."
Love it.
- To Burry, investing isn't a science or an art, but a combination of the two
"The road of empiric discovery towards interesting stocks will lead to rewards and profits that go beyond mere money."
Love it.
