Key Takeaways

In 1996 while being a medical intern Burry started a blog where he posted his stock-market trades and his arguments for making the trades.

He quickly gained a following, and his blog became known as one of the most insightful and prescient investment blogs on the Internet.

In 2000, Michael Burry established his own hedge fund, Scion Capital and got his first investment ($1,000,000) from Joel Greenblatt (Gotham Capital) who was following his blog.

In 2005 he made a bet against the subprime mortgage market, which paid off handsomely (Burry made $100 million for himself and $ 725 million for his investors) when the market crashed in 2007-2008.

In 1996, Michael Burry was a medical intern on a cardiology rotation at Saint Thomas Hospital in Nashville, Tennessee. One night, he logged on to a hospital computer and went to a message board called techstocks.com. There he created a thread called “value investing”. 

On August 26, 1998 Burry started running his own website valuestocks.net. On his blog, Burry posted his stock-market trades and his arguments for making the trades. He also wrote about his investment philosophy, which was based on the value investing principles of Benjamin Graham and Warren Buffett.

VALUESTOCKS.NET www.valuestocks.net
Supposedly for value investors, though Warren Buffett might not agree with this definition of value. Run by a 28-year-old neurology resident Dr. Michael Burry, Valuestocks.net showcases Burry’s own $50,000 portfolio, which includes some surprising choices including Pixar, the maker of Toy Story. Has good information on how to identify net-net stocks (trading for less than assets minus all conceivable liabilities). Accompanying all this are Burry’s incisive reports, as good as anything from Wall Street. One of the site’s best features is a list of essential finance texts, including thumbnail reviews and links to Amazon.com (Burry’s only source of revenue, since he doesn’t accept banner ads).
BEST: Original analysis, links to great finance sites, and a must-read book list for value investors.
WORST: Limited content is sometimes dated. – Forbes May 22, 2000

Burry’s blog quickly gained a following, and he soon became known as one of the most insightful and prescient investors on the Internet. In 2000, he established his own hedge fund, Scion Capital. The name Scion Capital was inspired by Terry Brooks ‘novel “The Scions of Shannara”, one of Burry’s favorite books. Burry initially funded Scion Capital with his own savings and contributions from his family (His mother contributed $ 20,000 and his three brothers $ 10,000 each). However, he soon attracted the attention of other investors, including Joel Greenblatt and Jack Byrne. Greenblatt was a value investing guru, and Byrne was a member of Warren Buffett’s inner circle. Both Greenblatt and Byrne were impressed with Burry’s investment acumen, and they offered to invest in Scion Capital. Burry accepted their investments, and Scion Capital was officially launched. In its early years, Scion Capital was a small hedge fund with just a few million dollars in assets. However, Burry’s investment performance was outstanding. He consistently generated returns that beat the market, and he quickly gained a reputation as a top-performing hedge fund manager.

In 2001, the S&P 500 index fell by 11.8% but Michael Burry’s hedge fund, Scion Capital, gained 55%. The following year, the S&P index fell again by 22.1%, but Scion Capital gained 16%. In 2013, the stock market finally turned around and rose by 28.69%, but Burry beat the market again, with returns of 50%. By the end of 2004, Michael Burry was managing $600 million in assets. In 2005, Burry began to focus on the subprime mortgage market. He believed that the market was unsustainable, and he started shorting mortgage-backed securities 

” By mid-2005, I had so much confidence in my analysis that I staked my reputation on it. That is, I purchased credit default swaps — a type of insurance — on billions of dollars worth of both subprime mortgage-backed securities and the bonds of many of the financial companies that would be devastated when the real estate bubble burst.” -MICHAEL BURRY

 When the housing market crashed in 2008, Burry’s bet against the subprime mortgage market paid off handsomely. Michael Burry made over $100 million for himself and $725 million for his investors. From November1, 2000 to June 30, 2008, the Scion Capital had impressive net 489.34% gain (the gross gain had been 726%)