Poor Charlie

These are the articles I mentioned above. They're accounts of how he made his first fortune. Well worth a read. The Grave Dancer - http://www.valuewalk.com/2014/07/the-grave-dancer-sam-zell/ Return of the Grave Dancer - http://www.cre.org/memberdata/pdfs/Zell_Grave_Dancer.pdf

My understanding is he was introduced to RE in college managing and owning student housing. After college he spent something like a week in law and quit to start investing in RE full time. He then made a ton of money in the 70s and early 80s taking title to under-performing commercial RE, renting them up, and selling them to institutional buyers (pensions/insurance/etc). He was able to buy the RE with almost no equity because the banks knew that if he could work them out they wouldn't have to write down the loans. If you're looking for more information, he wrote some great articles talking about his experiences that are well worth a read. The two that come to mind are the grave dancer articles he wrote for, I believe, a real estate trade journal. You can probably find the articles with some googling. If not PM me and I can email them to you. Someone also mentioned to me that he's currently writing a autobiography/memoir but I don't know if this is correct or not.

It would be interesting to ask a question about their early investment days. Something to the effect of 'Warren what investments did Charlie make in Wheeler-Munger that you admired and did you copy any of them?' Would also ask about the influence certain investors had on Warren when building BRK. He mentioned investors like Gurdon Wattles (Eltra Corp.) and Pritzker (Marmon & Rockwood) having an influence but never really talked about the specifics.

Is there anyone on this board who has, and would be willing to post, the old (pre-1997) Thomson Corp annual reports. TIA!

I take it from your comment that I'm off the mark and Scion has done very well. In that case I stand corrected. Thanks Nate.

Try finding a water ETF. lol no. Try reading the article that ni-co post. The water thing, IMO, has been blown way out of proportion. Farmland in general has, up to last year, done well. I would be very surprised if there was a material difference in appreciation of Cali farmland w/ water onsite vs plain old high yield Midwestern farmland. BTW, if you want a cheap way to invest in California water there are a few public companies to do it through. JG Boswell would be the most direct.

Dangerous? Didn't know making an educated guess as to what Burry's IRR was should come with a warning label. And strategy? I don't think Burry (or any other good manager) is going to make huge changes to his 'strategy' year-to-year. A look at Burry's investments, past and present, speaks to this. I agree. Makes no sense at all to base someone's investment performance on #s from a fund that is (a) managed in a fiduciary capacity, (b) audited, and © includes enough capital to merit filing with the SEC. Next time I'll go off his fantasy E-Trade account. Kidding aside, it's not like he's going to run a hugely different 'strategy' in his PA. And to think he's crushed his personal investments when his fund investments have not done well is naive. As I mentioned earlier, I don't want to get into his personal investments but I'll share a few that are publicly available. Consider the following: http://www.sec.gov/Archives/edgar/data/1086142/000095012309059102/f53413b4e424b4.htm That's a 2009 prospectus for Duoyuan Printing. DP was a Chinese RTO that (as with many other Chinese RTOs) turned out to be a fraud. You'll notice on page 145/146 Burry was involved with the issue. Also consider: http://www.institutionalinvestor.com/gmtl/3183653/Asset-Management-Hedge-Funds-and-Alternatives/Article/2800911/Following-The-Hedge-Fund-Money.html#.VwWhV5wrJ9M Chalksteam's performance has been poor for almost a decade now. Does this make Burry a poor investor? Not at all! The point I'm trying to make (tried to make in my original post) is that his returns are not outperforming to the extent they were when he was managing Scion Capital.

Does anyone have his letters? The MF links do not have them up any longer. Thanks.

Storming The Magic Kingdom by John Taylor Book is mostly about a run people made in the 80s to gain control of Disney. Includes some interesting characters (Dismey family / Rainwater - Bass family / Saul Steinberg). Great inside account of a high-profile company during an activist raid.

Thanks for your response! Sent you a PM.

Anyone have Arlington's older letters (pre-2013)?

Forgot to mention this above- If you want to read the book it's free for those with a Kindle Unlimited subscription. If you don't have Kindle Unlimited they have a 30-day free trial.

The SEC website has a 10-K from 1994 that has financial data for the years 1983-1993: http://www.sec.gov/Archives/edgar/data/17109/0000950130-94-000530.txt I saw those, thanks. I'd like to find the ARs from the earlier years if possible (pre-ABC merger). Book was good. I went in thinking this is just going to be another long-winded book about the life of a mid-level company man. That wasn't the case at all. While the book did go into his personal (non-business) life a bit, it was mostly about his time at Cap Cities. Also, as the first hire by Murphy, a lifer, and fairly senior during most of his tenure it's told from a pretty unique perspective. Not too many books by a guy who had a front row seat at one of the greatest compounding machines in history. I will say this: it's not an investing/finance book at all. The author is not a finance type as his jobs were mostly in sales and later operations. Other than stuff like "murphy liked cash flows" and "murphy was cheap" (paraphrasing) you won't find much relating to the quantitative side. That's why I was hoping someone might be able to share the old ARs

Just got done reading the 'Limping On Water' book. Was wondering if someone on this board has the old Cap Cities ARs and would be kind enough to post them? Thanks in advance!

I’m long only and don’t get into this stuff but I do believe there’s opportunity here. For instance: What about CDS on negative yielding sovereign debt derivatives? From what I understand about synthetic CDOs the yield comes from (a) the CDS premiums and (b) the yield on the high quality collateral backing the CDO. Burry paid the CDS premiums until the reference mortgages defaulted and was then paid from the underlying collateral. Why can’t you create synthetic CDO sovereign debt equivalents? Someone looking to buy say German Bunds buys the synthetic instead. He deposits cash, the cash gets parked in something like treasuries (or a basket of sovereign bonds with the same maturity, credit risk, and a positive yield) and you (the short) pay premiums (and maybe post extra collateral) to assume the fx risk. If things go bad you get paid out the same way Burry did. Can’t imagine this (or a similar variant) would cost more than the sub-prime trade.

I don’t really want to discuss the non-public investments he’s made on a forum like this. A google search will give you a good idea of his personal investments, both good and bad. I didn’t mean to criticize Burry’s investing abilities in any way. As I mentioned he’s one of only a few managers I would give money which, in my mind, is the ultimate endorsement. He’s also something of an inspiration to me. What I meant to say was I doubt his new fund (Scion Asset Management) has generated the kind of relative returns his old fund (Scion Capital) did. I say this for two reasons: -Over the roughly 8 years he ran Scion Capital (ending in Q3 2008) Burry made 6X (gross) when the indexes were down. This is a record better than BPL, maybe even Appaloosa. Will be very tough to match. -Returns came largely from investments in very distressed equities. As you know, he coined the term ‘ick investing’ to describe stocks people don’t want to own at any price. This investment style tends to produce large winners and losers. Pre-crisis it produced more winners than losers. Post-crisis things have changed. I know of very few deeply distressed contrarian ideas that have worked, but I can think of plenty of land mines (I’ve stepped on a few myself). I’m not saying contrarian distressed ideas haven’t worked, just saying it has been a tougher game. Once again, this is not a criticism of Burry. I feel like telling some of you Burry hasn’t crushed the S&P is like telling a kid there’s no Santa. Everybody has a tough time now and then, even the very best.

For me the macro comes down to opportunity cost: will I be able to find better investments (higher returns with less risk) in the future or today? While others may be able to find good investments today, I'm finding very few that get me excited. Said differently, my opportunity cost of being invested is pretty low. I weigh that against the high likelihood of having another panic situation and it's pretty clear to me that I should have some investable cash around. Maybe it's because I started investing during the crisis, but I find even the off chance of panic and forced selling too irresistible to pass up. I've been deploying cash more recently but am still well above 50%.

It is normal for a very large percentage of the world’s investors to be paying borrowers to take their money? Is it normal for a major economy to be creating almost 10% of GDP in credit in a single month when their current credits are deteriorating rapidly? Not saying you can’t find good investments but why be so quick to dismiss people who bring up these (and other) important issues as crazy perma-bears (especially Dalio, who isn’t even making a long or short case, just stating the facts)? I'm certainly not a perma-bear, but I'm also not willing to just stick my head in the sand either.

Scion Asset Management began around Q4 2013. I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital. This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis. He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis. A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc). As far as I know only Cornwall Capital have maintained their impressive returns. I still think there are very few investors of Burry’s caliber. He's one of only a handful of managers I would invest with. Do you mind sharing Cornwall's returns ? Thank you in advance Cheers GK 52% gross / 40% net Where do you find information on cornwall post crisis/do they file? There was a very good interview with Jamie Mai where he mentioned his returns over the last 9 year period (since they started taking outside capital). I read the book (Market Wizards series) around early 2014 so the returns would not include the last few years.

I find it odd how people on this board are so quick to dismiss any perceived negative data as crazy and the person delivering that data as a "perma-bear." Maybe it's because things have gone so good for so many for so long. Maybe it's because of the almost universal cheerleading and government sponsorship of assets prices. Or maybe it's just the human condition. Whatever it is the bullishness is indeed willful.

Scion Asset Management began around Q4 2013. I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital. This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis. He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis. A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc). As far as I know only Cornwall Capital have maintained their impressive returns. I still think there are very few investors of Burry’s caliber. He's one of only a handful of managers I would invest with. Do you mind sharing Cornwall's returns ? Thank you in advance Cheers GK 52% gross / 40% net

Scion Asset Management began around Q4 2013. I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital. This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis. He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis. A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc). As far as I know only Cornwall Capital have maintained their impressive returns. I still think there are very few investors of Burry’s caliber. He's one of only a handful of managers I would invest with.

My understanding is Burry does take outside money. No date ? Filing is FYE 2015. This is his first 13F since closing down Scion Capital in 2008. I thought it interesting to see all the TBTF banks. I remember him saying in an interview he doesn't invest in large financials because they're impossible to analyze.

13F link below http://www.sec.gov/Archives/edgar/data/1649339/000114036116052634/xslForm13F_X01/form13fInfoTable.xml

Thanks!