Some weeks back I was on my couch watching Bloomberg TV and the particular show that was on was Risk Takers. I’m a fan of the TV show and was excited to know who was being profiled this time around as I was expecting to see someone I knew and who is a big shot. Ironically, I didn’t know the person being profiled but you are damn right the story was exhilarating and I was perplexed at the success niche this man built gradually for himself and his Company.
Who else will I be talking about if not Dr Michael Burry (Born 1971), a physician turned hedge fund manager (A hedge fund is an investment fund that can undertake a vast range of investments and trading activities and its usually open to certain investors). He successfully and single-handedly built a hedge fund which made high return on investments (ROI) both for his investors and also for himself. In his early childhood, he developed a tumour in one of his eyes and it was operated on which later led to the loss of that eye making only one eye of his functional. He was always this atypical kid who didn’t really follow the crowd and the norms of the majority. He said he likes to stand out from any group and then prefers to analyse that group instead of being in it; in short, he is what we call nowadays as a man who thinks and operates outside the box. It is not just enough for you as a visionary, a manager, businessman, innovator to think outside the box, you also have to operate outside the box. Significant and lasting successes are built on both of these qualities and not just one.
After his high school, he attended Vanderbilt School of Medicine where he graduated from as a certified and licensed medical personnel. During his undergraduate days he fell in love with financial investments and started studying the trends in the capital market. This became his passion as he then started a blog where he made advises and comments on which stocks will improve and those which will decline as time goes by. Unknown to him, there were some top financial investors apart from other traders who had taken keen interest in him mainly because his predictions about stock value were nearly always if not just always correct. People were reading his blog and trading on this advises and in the process was making profits based on what he advised.
Upon graduation, he did his residency at Stanford hospital at their neurology department and during that period he still created some time (after working hours late in the night) to study more about the financial markets and to operate his blog site. In 2000, he quit his job as a medical doctor in order to pursue his passion and hobby. Prior to him quitting his job he was strongly advised not to by his superiors as they felt he didn’t know what he was doing. Funny enough and truthfully this still happens in a lot of places as people are so comfortable with their status quo and are afraid to leave the known and certain and delve into the unknown. Success doesn’t come cheap as one has to take risks which might either make or break us but if we still summon enough courage to take these risks, the sky will only be our starting point. People tend to say that the sky is one’s limit, this is absurdly wrong as one man once said; ‘don’t tell me the sky is my limit when there are footprints on the moon’.
During his initial days as a new hedge fund manager, he got calls from Joel Greenblat, another hedge fund manager and an investor and also White Mountains Insurance Group and they invested in his company reason being that they’ve been following his blog site and noticed the accuracy of his financial market predictions. From 2000 to 2008, his hedge fund company Scion Capital recorded returns of 489.34 percent (net of fees and expenses) during the time S & P 500 just recorded only about 2 percent returns over the same period. Once your are creative, gifted and skilled in something, people will invest in that which you are as they will believe in what you do and what you stand for. He was also one of the first people to predict the then impending financial crisis that erupted in 2007 way back around 2003 to 2005. He claimed he studied the real estate market appropriately and predicted that when the real estate market values reset, the financial bubble will finally burst leading to financial doom and chaos. He then bet against the Subprime mortgages ( Subprime mortgage is a means of lending money to people who may have difficulty in maintaining repayment schedule) though that period was a difficult and trying one for him as he faced challenges from some of his investors and also criticism from some major makers in the financial market.. The bet finally paid off in 2007 when financial bubble finally burst and Scion Capital made about 800 million dollars as profit with about 700 million dollars going to the investors and 100 million dollars going to Dr Michael Burry personally.
In 2008, he liquidated his company and then closed it down to focus more on his own personal financial trading and investments. He currently has investments in almond farms (California) and sits on the board of some institutions. He says now he has time to focus on his family more and also to do financial trading without restrictions and questioning by investors. He is married and with children and they currently reside in California where he runs his work from.