Michael Burry’s current holdings

[ValueArb]

22 minutes ago, Sweet said:

Only if you are using technical analysis to trade and invest.

 

If you are using a fundamental filter, like value, then that’s your predictive tool.

 

In this case, the technicals are NOT trying to predict the future, your valuation is doing that.  The technicals just get you in and maybe out.

 

 

Look I'm always willing to admit I'm wrong. If TA works I'd be a fool not to use it. 

 

But so far you haven't given me any reason why you think TA works or any specific ways you use it.  I can "get in and out" of a position without TA at all, they are called buy and sell orders. 

 

TA can only help if it provides me a reasonably accurate reason to believe today is a bad time to buy or sell, and it can only do that if it has some level of predictive value about what the price will do tomorrow or anytime in the near future. Show me how it does this, or how it is useful without predicting future price action, and I'll become TA's biggest cheerleader.

 

Edit: And a "value screen" isn't predicting price action, either short term or long term. You are trying to find companies trading well below their true value, which means if I buy company A for $60 believing the present day value of its future owner earnings are $100, and it the stock price does nothing but decline to zero and the company goes out of business, I still win if I'm paid $100 in present day value dividends before it does.

Edited August 23, 2023 by ValueArb

[Saluki]

I'm embarrassed to say that in my young and foolish 20s I dabbled a bit in this and couldn't get it to work. I studied various things including books on technical analysis methods like japanese candlesticks and other TA stuff.  I subscribed to Investor's Business Daily and studied the CANSLIM method.  

 

One problem with technical analysis is that it's subjective. It looks like a head and shoulders pattern, but it doesn't work. So afterwards, some wizard will point out why it LOOKS like a head and shoulders, but actually it isn't. This is "no true Scottsman" fallacy. If there was something objective about it you could program some computer to do it for you. 

 

Another problem is that if you are looking for a pattern, whether you are using a daily, weekly, or monthly price chart will give you different answers. So which one are you supposed to use? what if they give different answers?

 

The biggest problem is that people who subscribe to this are usually not lone alchemists sitting in front of their screens trying to create their own magic.  They either share with other members of the true religion or pay for trading signals where a master tells the Jedi trainee what to buy and sell.  And if you have a lot of people buying / selling at the same time, it looks like it's working, but it's just a bunch of pikers getting bad fills and slippage and thinking the magic beads work. 

 

The arguably good counterpoint is that IF you have already done the fundamental work and your technical analysis makes you more confident in your work, that might be a benefit. "It looks cheap, but I was not sure whether to buy today. However, the magic squiggles give me confidence."  In Thai kickboxing, the fighters wear magic headbands and armbands and do a ritual dance before a bout.  I can assure you it does nothing to protect you (especially since the other guy has the same thing), but if it gives you the courage to see the ring and a scary guy waiting to kick you in the face, and not turn around and head back to the locker room, then it's done it's job. 

[Sweet]

43 minutes ago, ValueArb said:

 

Look I'm always willing to admit I'm wrong. If TA works I'd be a fool not to use it. 

 

But so far you haven't given me any reason why you think TA works or any specific ways you use it.  I can "get in and out" of a position without TA at all, they are called buy and sell orders. 

 

TA can only help if it provides me a reasonably accurate reason to believe today is a bad time to buy or sell, and it can only do that if it has some level of predictive value about what the price will do tomorrow or anytime in the near future. Show me how it does this, or how it is useful without predicting future price action, and I'll become TA's biggest cheerleader.

 

Edit: And a "value screen" isn't predicting price action, either short term or long term. You are trying to find companies trading well below their true value, which means if I buy company A for $60 believing the present day value of its future owner earnings are $100, and it the stock price does nothing but decline to zero and the company goes out of business, I still win if I'm paid $100 in present day value dividends before it does.

My only point about TA is that you initially said they always work at cross purposes to each other.  That depends entirely how it is used, for the most part I would agree but there are systems that combine them.

 

Regarding value investing, and predictions.  I think in many cases we are predicting future price through valuation.  Some companies don’t pay a dividend so we depend on the market quoting a reasonable price.  Unlike the Buffetts of the world we plebs aren’t buying entire companies and are at the mercy of management and market quotes.

 

Edited August 23, 2023 by Sweet

[Sweet]

6 minutes ago, Saluki said:

I'm embarrassed to say that in my young and foolish 20s I dabbled a bit in this and couldn't get it to work. I studied various things including books on technical analysis methods like japanese candlesticks and other TA stuff.  I subscribed to Investor's Business Daily and studied the CANSLIM method.  

 

One problem with technical analysis is that it's subjective. It looks like a head and shoulders pattern, but it doesn't work. So afterwards, some wizard will point out why it LOOKS like a head and shoulders, but actually it isn't. This is "no true Scottsman" fallacy. If there was something objective about it you could program some computer to do it for you. 

 

Another problem is that if you are looking for a pattern, whether you are using a daily, weekly, or monthly price chart will give you different answers. So which one are you supposed to use? what if they give different answers?

 

The biggest problem is that people who subscribe to this are usually not lone alchemists sitting in front of their screens trying to create their own magic.  They either share with other members of the true religion or pay for trading signals where a master tells the Jedi trainee what to buy and sell.  And if you have a lot of people buying / selling at the same time, it looks like it's working, but it's just a bunch of pikers getting bad fills and slippage and thinking the magic beads work. 

 

The arguably good counterpoint is that IF you have already done the fundamental work and your technical analysis makes you more confident in your work, that might be a benefit. "It looks cheap, but I was not sure whether to buy today. However, the magic squiggles give me confidence."  In Thai kickboxing, the fighters wear magic headbands and armbands and do a ritual dance before a bout.  I can assure you it does nothing to protect you (especially since the other guy has the same thing), but if it gives you the courage to see the ring and a scary guy waiting to kick you in the face, and not turn around and head back to the locker room, then it's done it's job. 

Largely my own experience.  I tried it for years.  There are small edges in the market but it’s god awful boring and it doesn’t suit my personality.  I gave up on it and just only do investing now.

 

Some people just can’t buy on big drops they like confirmation signals.  It’s not for me.  It clear some guys like Druckenmiller use technical analysis alongside their fundamental analysis.

[Gregmal]

Technical analysis is also synonymous with gut feelings. It’s just two things happen in finance. First is that these folks need to manufacture intelligent sounding rhetoric to explain everything even when it’s simple. And two, they’re all pricks who have superiority complexes and need to nitpick and diminish what others do which leads back to number one. Hence, “technical analysis” which as has been mentioned, is subjective. It does work for some. But if those folks were asked how they arrived at their conclusions for trading and simply said “it’s oversold on heavy volume and I think it bounces a few percent” the clipboard crowd would say it doesn’t count and they need something more quantifiable. So really, everyone should just do what works for them. 
 

I do find charts helpful to a degree because they show sentiment, psychology, and trends. If I see a multi year ski slope chart top left to bottom right, I don’t even look at stuff more often than not. Especially if there’s dilution. Whereas if I see a serial performer typically there’s something to it. 

[Value_Added]

1 hour ago, ValueArb said:

 

Again, if it can't predict the future TA is worthless. That doesn't mean it has to be 100% accurate, but it has to be accurate enough to give you a positive future expectation or it can't help you at all. 

 

What positive expectation means is that your TA "entry signal" has to indicate when the price change you want is more likely to occur than the price change you don't want. That could mean its more likely the stock price increases in the near future than it decreases. So for example, if you find a signal says its more likely the stock price will increase in the next two weeks than it will decrease, if that signal was 55% accurate (55% of the time it occurs the stock price is higher in 2 weeks and 45% of the time it's the same or lower), then you have an actionable entry signal telling you its more likely than not the stock has bottomed out.

 

Problem is signals that strong don't exist. Academia and Wall Street have looked for them for decades and they find nothing but the most tenous relationships that are usually impossible to trade and the exceptions either don't last or don't offer a large enough edge to overcome transaction costs to produce market beating returns.

 

So all TA involves predicting price action, ie the future. That's why Buffett doesn't believe it. But if I'm misunderstanding you, please give me a detailed example of a TA signal you use and explain how it's useful while not predicting the future.

 

You aren't misunderstanding me nor are you wrong.  I think you're very correct in that most applications of TA would underperform and lose money.  But like @Sweet has mentioned, its when you pair it with the normal analysis you would typically perform to gather the story and value the stock.  You still need to understand where the company's been, where you think its going, how its going to get there and most importantly, does it's current price offer a margin of safety and if so how big?  You could leave it at that, buy the stock if it fit your investing guidelines and noone would say that was silly otherwise.  If you're right eventually the market should agree but sometimes Mr. Market isn't always agreeable which is what allows you to average down after an initial purchase.  The TA's I use help put the market sentiment into perspective and better gauge when I would like to enter.  I implemented this after my BABA mistake because it was an eye opening example that sentiment can make you wrong for a lot longer than you plan (and I may still be way wrong in BABA and I probably deserve to be wrong for letting another investor to override my initial work and valuation). 

 

TA's don't predict the price going up or down and they certainly wouldn't override my decision to enter into a stock I wouldn't be buying anyways.  They simply act as a means to enter a stock when there isn't hugely negative sentiment.  I don't really classify myself as a buy and hold forever investor.  I like to have some sort of event driven decline that isn't permanently detrimental to the business.  When this happens sentiment can be very negative for a long time and it's easy to enter a position with a lot of downside left - even with a mostly right valuation. I believe they work well for this type of investing. 

Edited August 23, 2023 by Value_Added

[tnp20]

It very possible Blurry swapped his BABA and JD to HK exchange shares in which case they would not show up in 13F. There are number of advantages of holding it on HK exchange especially as BABA spins off and does IPO on HK exchange - not sure what would happen to shares held as ADRs ...may be they get cash. I doubt he got cold feet in 1-2 quarters.

Edited August 23, 2023 by tnp20

[Value_Added]

32 minutes ago, tnp20 said:

It very possible Blurry swapped his BABA and JD to HK exchange shares in which case they would not show up in 13F. There are number of advantages of holding it on HK exchange especially as BABA spins off and does IPO on HK exchange - not sure what would happen to shares held as ADRs ...may be they get cash. I doubt he got cold feet in 1-2 quarters.

 

Very possible but I think he more likely got out of them what he wanted, sold and moved on.  I love seeing what Bury does but I never put much thought into his investments because he's so unpredictable. I view it as an impossibility to frame why he made an investment and its catalyst or timeline to make an exit.

[Fundmanagerthrwawy]

Does anyone know what sort metrics Burry uses to screen opportunities? I keep seeing different possibilities but unsure what is the legitimate one.

Any tips are appreciated!

Cheers

[mjm]

36 minutes ago, Fundmanagerthrwawy said:

Does anyone know what sort metrics Burry uses to screen opportunities? I keep seeing different possibilities but unsure what is the legitimate one.

Any tips are appreciated!

Cheers

 

[Sweet]

Burry should take his own advice.

[Guest]

Wanted to post this a few day ago and then forgot...but the new posts reminded me. Business Insider which is usually Pro-Burry is now going against him. 

 

https://finance.yahoo.com/news/investors-made-more-money-buying-234312599.html

[Sweet]

I can’t remember the last time Burry wasn’t bearish on the market.  He’s turned into one of these guys that spends his time trying to call market tops or predicting the economy is going into a recession.

 

Edited September 17, 2023 by Sweet

[Gregmal]

Most appropriate summary of Burry I’ve heard is “glass eye, not crystal ball”. He’s turned into one of the “got 1/100 right but marketed it well” dudes.

[Guest]

55 minutes ago, Gregmal said:

Most appropriate summary of Burry I’ve heard is “glass eye, not crystal ball”. He’s turned into one of the “got 1/100 right but marketed it well” dudes.

 

I don't think that's fair. He had a tremendous track record prior to 2008 too (as did other value type of managers). Most value managers got absolutely crushed in 2008 though...while he prospered. 

 

 

[dealraker]

On 9/15/2023 at 3:31 PM, Fundmanagerthrwawy said:

Does anyone know what sort metrics Burry uses to screen opportunities? I keep seeing different possibilities but unsure what is the legitimate one.

Any tips are appreciated!

Cheers

Buy stuff.  Whenever media begins to publish that you own that stuff then sell it.  

[Gregmal]

18 minutes ago, stahleyp said:

 

I don't think that's fair. He had a tremendous track record prior to 2008 too (as did other value type of managers). Most value managers got absolutely crushed in 2008 though...while he prospered. 

 

 

I don’t consider one dimensional investors who missed one of the most prosperous decades in history being arrogant and stubborn to be good money managers. 

[Poor Charlie]

4 hours ago, Gregmal said:

Most appropriate summary of Burry I’ve heard is “glass eye, not crystal ball”. He’s turned into one of the “got 1/100 right but marketed it well” dudes.

That's indeed the impression I get following him on Twitter. But I've seen all his old letters. They're off-the-charts accurate with both macro and company-specific details (this includes his other fund: Scion Asia Opportunities). It's some of the most thoughtful stuff I've read (I can see why Greenblatt called him the best analyst he'd ever seen).

 

I have a hard time reconciling the Burry you see on Twitter with the Burry that wrote those letters.

[Guest]

19 hours ago, Gregmal said:

I don’t consider one dimensional investors who missed one of the most prosperous decades in history being arrogant and stubborn to be good money managers. 

 

One dimensional? You could say that about Paulson but I don't think it's true for Burry. Paulson had a very mild record up until 2008 and killed it...based on someone else's idea.

 

Burry had an excellent track record until 2008 and, best that I know, was the first person to make the subprime trade. I think there is an decent chance that if you gave $10,000 to Burry and $10,000 to Buffett that Burry would turn it into $1 million first. If you started off with a $10 billion though, I think Buffett would handily beat Burry in managing that. I think Buffett is a superior businessman. Buffett is also more likely to blow up, I'd think. 

[Gregmal]

6 minutes ago, stahleyp said:

 

One dimensional? You could say that about Paulson but I don't think it's true for Burry. Paulson had a very mild record up until 2008 and killed it...based on someone else's idea.

 

Burry had an excellent track record until 2008 and, best that I know, was the first person to make the subprime trade. I think there is a decent chance that if you gave $10,000 to Burry and $10,000 to Buffett that Burry would turn it into $1 million first. If you started off with a $10 billion though, I think Buffett would handily beat Burry in managing that. I think Buffett is a superior businessman. Buffett is also more likely to blow up, I'd think. 

I’m personally kind of a fan of Burry. His early stuff was awesome. I just have no clue what the obsession with him by folks is. His Twitter stuff is bizarre. Although you kinda have to question anyone who’s on a place like that. But Burry especially. I mean when you look at the stuff he buys, it’s largely highly speculative junk with a bit of a retail shareholder base that also coincidentally happens to move a good bit when it gets out that “Michael Burry” is buying. As I’ve said here before, I just don’t think much of what he does is replicable or even worth following for a half intelligent investor.

[Guest]

2 minutes ago, Gregmal said:

I’m personally kind of a fan of Burry. His early stuff was awesome. I just have no clue what the obsession with him by folks is. His Twitter stuff is bizarre. Although you kinda have to question anyone who’s on a place like that. But Burry especially. I mean when you look at the stuff he buys, it’s largely highly speculative junk with a bit of a retail shareholder base that also coincidentally happens to move a good bit when it gets out that “Michael Burry” is buying. As I’ve said here before, I just don’t think much of what he does is replicable or even worth following for a half intelligent investor.

 

Yeah man, I think he's a little over the top (as I've noted in this thread previously, I believe) but I find him as one of the few that actually thinks for himself and doesn't follow/copy others. I appreciate that. 

[Gregmal]

7 minutes ago, stahleyp said:

 

Yeah man, I think he's a little over the top (as I've noted in this thread previously, I believe) but I find him as one of the few that actually thinks for himself and doesn't follow/copy others. I appreciate that. 

You can appreciate it, but in order to be a good investor it has to end up being profitable lol. That’s one of the simplest ways to judge. I had a whole list of these rockstars I used to follow from like 2010-2014 or so and after awhile you’d be shocked how many have like 70%+ miss rates. Or you find out they only made money trading fluctuations and their thesis had no merit. That’s where thinking for yourself as an individual is crucial as well.

Edited September 18, 2023 by Gregmal

[Spekulatius]

I think the "Big short" episode in 2007/2008 changed him and at the end may have cost him a lot of mental sanity and money as well. He has changed a lot from his earlier days.

 

He may have done better losing money in 2008 like every one else and just keep doing what he has been doing before.

[Sweet]

What is his track record over the last 10 years - is if public?

 

He is no hero, he rolled the dice with his investors money.  He has been top picking and recession predicting ever since.  As Spek says, probably would have been better to stay away from the macro stuff.

[Guest]

My understanding is that Burry became bearish (at least publicly) in 2019 with his "index funds are causing a stock market bubble" thing. I didn't agree with that stance, personally. I have no idea what his returns were for 10 years though. 

Edited September 18, 2023 by stahleyp