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The Big Short Portfolio!

The first question you probably have is what the heck the Big Short Portfolio and why should I care right? Michael Burry is the guy portrayed by Christian Bale in the movie called The Big Short, its a movie about one of the few documented guys who correctly called the 2009 financial crisis, in fact he was so sure it was gonna happen he went and had institutions create a new investment offer just for him to essentially short the sub-prime market. They laughed at him, everyone gave him hell, his investors threaten him, tried to sue, embarrassed him, and in the end he was right and made his investors very wealthy.

After that happened he was so disgusted with the whole thing that he disappeared and pretty much shut down his fund Scion Asset Management LLC. In fact nobody really knew what was going on with him until Q4 of 2018 when Scion popped back on the map because of a 13F filing that is required by all funds that manage $100M or more. That was the first time we got a look at the investments Burry holds since 2009.

This guy has NO social media, he isn’t an “influencer” who has a podcast, he is a guy who knows how to pick companies and make money, thats it! This is a guy who has 0 desire to be famous or known publicly, that is the kind of guy you follow.

Here is a look at the current holdings…

Right click, view image in new tab for full size

Understand that the list above doesn’t tell you if he is long or short position, just tells you that he has a position open on that ticker. Below is the new positions and position sizes he has added to Scion in Q1 2019

Company (symbol)Shares HeldMarket ValueNew Stock? (JD)300,000$9,045,000Yes
Alibaba (AABA)46,775$3,047,391No
Western Digital (WDC)50,000$2,033,500No
Tailored Brands (TLRD)231,195$2,797,459 No
GameStop (GME)113,138$1,379,152 No
Sportsman Warehouse (SPWH)32,250$141,577No
Greensky Inc (GSKY)272,021$3,519,951Yes
Pet IQ (PETQ)106,232$3,337,000Yes

Here are the stocks he dumped completely for Q1 2019

Company (symbol)Shares Held% Change
Mckesson Corp (MCK)40,000100%
Biogen Inc (BIIB)10,000 100%
Mohawk Industries (MHK)18,809 100%
Celgene (CELG)45,000 100%
Alex & Baldwin Holdings (ALEX)500,356 100%

I think its important to bring up a part of the original 2001 investor letter that Burry wrote so you understand what sort of stocks and positions he goes for with the fund.

As much as the Fund is a value fund, its an opportunistic fund. And as much as I enthusiastically explore the value of each business behind every stock, I seek the pockets of the market that are the most inefficient, the most temporarily imbalanced in terms of price. Whatever extra return this Fund will earn will be borne of buying absurdly cheap rather than selling dearly smitten. I certainly have proven no ability to pick tops, and I do not anticipate attempting such a feat in the future. Rather, fully aware that wonderful businesses make wonderful investments only at a wonderful prices, I will continue to seek out the bargains amid the refuse.

Michael Burry 2001

His style of investing is very much ecompassed in the quote above, after all that is what led him to go after the sub-prime market. Using that lens of thinking, check out the positions he has open and see how you can apply this style of thinking to your own strategy.

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