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2025 |
In the interim, the value of these credit default swap contracts should fluctuate.
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It will never be my purpose to sell stocks short as part of a risk management program, contemporaneously defined.
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Typically there would’ve been different dates from when we purchase those.
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Loss severity is the average percentage loss realized on mortgages
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2025 |
Burry said that, as a physician with "(seemingly)" no prior experience, he found the negotiations difficult and met tremendous pushback when he tried to get terms similar to those offered to better clients.
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It is my opinion that we have yet to find fantastic undervaluation on any scale of depth or breadth comparable to the overvaluation…
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Whatever extra return this Fund will earn will be borne of buying absurdly cheap rather than selling dearly smitten.
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Factual |
2025 |
Michael Burry said "we" purchased $10,000,000 of protection on the nine tranche of the deal discussed, and still held $10,000,000 of protection as of January 4, 2007.
Factual · 2025 |
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2025 |
Of course, when full liquidity becomes available, the side pocket will terminate and cash and/or securities will be distributed back into…
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It would be the definition of bad analysis to inadequately account for all competitive threats, yet at current prices, the market has done…
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I believe now as I did then that there is a reasonable fundamental basis for these higher oil prices.
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No member need write a check as a result of this year’s activities.
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Actually, no, I did no such thing.
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Our rights to have our positions collateralized by the counterparty are our single most significant protection against counterparty failure.
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it is imperative that I as manager respond only to the value of an individual investment when making capital allocation decisions.
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confidently buy more than $5,894,000 in credit default swap protection on this tranche.
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I have no view on whether the market, broadly defined, will fall or rise during the coming year.
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2025 |
For instance, we can take a look at PPSI 2005-WLL1, an early 2005 mortgage deal.
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| Unresolvable |
Factual |
2025 |
As of the time of the interview, Scion held none of the listed positions.
Factual · 2025 |
Their own work or organisation |
| Unresolvable |
Prediction |
2025 |
The Scion Value Fund's expense ratio will continue to fall as its equity, now over $14.7 million, grows.
Prediction · 2025 |
Their own work or organisation |
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2025 |
Consider it revisited, and affirmed.
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It does appear to me that this is creating opportunities.
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that has put Scion back on firm footing.
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So I launch a hedge fund that will only short mortgages via credit default swaps.
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It’s a good year to be long.
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The Fund fared comparatively well, but I have to say such comparisons are not necessarily valid.
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On the contrary, I am enthused that the market is offering up values on a scale not seen previously during the Fund’s existence.
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In the case of 5-10 year options that are subject to re-issuance and re-pricing in tougher times, volatility means little to the value of…
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One hedges when one is unsure.
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The less definition offered, the less positions revealed, the less statistics applied – all the better for the portfolio that aims for…
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As is always the case, timing is therefore important for an investor short-selling tranches
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Hence, the expense ratio for most funds is generally doomed to be higher than 1%.
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Factual |
2025 |
The typical private fund charges a 1% asset management fee that does not necessarily include accountants', lawyers' and other expenses borne by the fund.
Factual · 2025 |
Economics and markets |
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2025 |
My fundamental, personal investment goal is to earn reasonable returns on my invested capital, such that these returns, compounded over a…
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It also ignores the impact of share repurchases and share issuances relative to intrinsic value.
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So these are RMBS, residential mortgage backed security.
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It is painful, no doubt, but a deep and lasting recession will be beneficial in the long run, as only such a consequence can scrub the…
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This degree of outperformance over short time periods will be an extremely poor guide as to future relative performance.
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| Mostly true |
Factual |
2025 |
Scion's agreements with counterparties required daily collateral valuation in both directions.
Factual · 2025 |
Their own work or organisation |
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2025 |
The deterioration is in fact already substantial.
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I have found markets to be anything but random, and I find many of the future events that are bound to be dismissed as random or…
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The reason that I demanded daily collaterals is because I thought to these could disappear very quickly overnight
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The correct view remains that risk is minimized not through the alchemy of volatility calculus but rather through respectful business…
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It is a tenet of my investment style that, on the subject of common stock investment, maximizing the upside means first and foremost…
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The main accomplishment of the Fund, in my opinion, was not grossing 8.24% in two months but rather avoiding such debilitating devaluations…
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This PPSI deal is a particularly nasty example, but yes, nasty examples exist among our shorts.
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It is not clear that, given current corporate governance abuses, such a circumstance would repeat in the future.
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Calculating risk is about the most brainless brainy endeavor one can imagine.
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This investment has proceeded as expected since inception.
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I will not reveal the name of this company here, as I do hope it continues to fall – thereby providing the Fund an opportunity to add to…
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The incentives in place for public bank executives and middle managers are even more contrary to safety.
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and it is not meant to be representative.
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Symetra’s business itself is performing well.
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Our diversification among counterparties is also a significant protection.
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Emotion may produce short-term market bottoms just as it may produce short-term market tops, yet logic that attempts to peg valuation…
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The full impact of the subprime mortgage-induced contagion is hitting Wall Street and Main Street simultaneously.
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In short, volatility is on sale because 99+% of the institutions out there are doing their best to avoid it – under the mistaken but Nobel…
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Sometimes, markets err big time.
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I intend for this Fund to be populated primarily by investors with a longer view, rather than by speculators attempting to catch a brief…
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2025 |
It is my belief that one constant in the stock market is human nature.
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I am much more concerned with maximizing long-term compounded returns than maximizing the return in any given period, whether the period be…
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2025 |
I do not know a soul who has ever admitted to buying into the bubble.
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| Unresolvable |
Prediction |
2025 |
Without an automatic 1% asset management fee, the Scion Value Fund's expense ratio will generally be no greater than 1%.
Prediction · 2025 |
Their own work or organisation |
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2025 |
It was me protecting against counterparty risk.
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2025 |
Servicers are themselves rated and in my view would have little incentive
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2025 |
I occasionally short a common stock in the Fund because I believe the stock will decline, resulting in a profit.
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| Not researched |
Factual |
2025 |
Michael Burry started the hedge fund Scion Capital after his residency and ran it until 2008.
Factual · 2025 |
Their own work or organisation |
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2025 |
Many, and probably most, technology companies are therefore private companies in the public domain – existing for themselves, not for their…
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The goal here should be neither to take profits when the Fund is up significantly nor to cut losses when the Fund is down significantly.
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The prudent view, in my opinion, is no view.
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I would emphasize that our long portfolio has been conservatively managed from the get go.
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I do believe trends such as these validate the proprietary criteria upon which I selected
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It would be disingenuous of me to state that the Fund’s performance relative to the S&P 500 Index does not appear startling.
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2025 |
I hold no plans to offer transparency into these positions, nor do I expect to compromise the opportunity to trade out of these positions…
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2025 |
I would argue that if I am the only one that thinks in this manner, and if I am correct, then my understanding becomes a competitive…
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2025 |
A side pocket is not necessary.
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2025 |
The deleterious effect of permanent capital loss on portfolio returns cannot be overstated.
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| Mostly true |
Factual |
2025 |
Michael Burry earned a bachelor's degree in economics at UCLA and then an MD at Vanderbilt School of Medicine.
Factual · 2025 |
Their own work or organisation |
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2025 |
As long as the Fund exists, it will be my only investment.
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2025 |
I have written before of my similar belief that many of our financial institutions are simply becoming too big to save without consequence.
Not checkable · 2025 |
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| Not researched |
Factual |
2025 |
The Scion Value Fund's minimum initial investment for new members is $250,000.
Factual · 2025 |
Their own work or organisation |
| Not checkable |
Not checkable |
2025 |
Intrinsic value is created whenever shares are issued at a price per share in excess of intrinsic value per share.
Not checkable · 2025 |
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| Not researched |
Factual |
2025 |
Burry said that Intech (as transcribed) is a data provider for mortgage pools, and that the identifier in question is an Intech deal number.
Factual · 2025 |
Economics and markets |
| Not researched |
Factual |
2025 |
Word of mouth is the primary method by which the Scion Value Fund is marketed.
Factual · 2025 |
Their own work or organisation |
| Not checkable |
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2025 |
But short of deciding to mark our own book, the marks used will continue to come from the counterparties, as no third party agent offers…
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2025 |
As it turns out, we did not have to wait five years, or even a year or two.
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2025 |
I would caution against reading too much into what is widely reported.
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2025 |
I trust investors have noticed the improvements.
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2025 |
While many see a commodities bubble, I see a federal mandate to inflate commodities prices in dollar terms.
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2025 |
Let me be the first to tell you that this is no small anomaly – it is a quite large anomaly.
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2025 |
Manipulating capital adequacy appearances does nothing to change the underlying economic requirement.
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2025 |
I alone will retain the majority economic interest in Scion Capital as well as the entire managing member interest.
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2025 |
Securities attract an investment from the Fund when they stand alone as tremendous values – there are simply no other criteria.
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2025 |
In truth, for now, please ignore the S&P 500 Index with respect to the relative performance of the Fund.
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2025 |
As I have noted before, whatever excess return the Fund earns will be the result of my natural inclination to buy cheaper rather than any…
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| Not researched |
Factual |
2025 |
Michael Burry said the agreement under discussion was not very standard and that its terms were negotiated specifically to protect his side.
Factual · 2025 |
Their own work or organisation |
| Not checkable |
Not checkable |
2025 |
I must point out the terrific job done by the Scion Capital back office this year, as our K-1s and audits were completed in timely fashion.
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2025 |
At the end of the day, we have the contractual right to receive cash when these tranches deteriorate to the requisite level, and that is a…
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| Not researched |
Factual |
2025 |
The Symetra Financial IPO has been delayed due to market conditions.
Factual · 2025 |
Their own work or organisation |
| Not checkable |
Not checkable |
2025 |
I do not view volatility as being in any manner a measure of risk, and hence the Fund is not managed to minimize volatility.
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