Michael Burry, of ‘Big Short’ fame, made a fortune from the 2008 financial crisis by being one of the few investors savvy enough to pick up on the trouble that was brewing ahead of time. The investor secured roughly $100 million for himself and another $700 million for his clients by correctly diagnosing the United States housing bubble.
He hasn’t rested on his laurels since then, however — Burry remains an active investor, and his commentary and predictions move markets and attract the attention of investors even today. But as impressive as some of the returns that he has secured since 2008 have been, like any investor, Burry is not infallible.
Most recently, his hedge fund, Scion Asset Management, missed out on more than $14 million by selling Geo Group (NYSE: GEO) stock early.
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Avoiding our own biases is sometimes a tall order — a Burry tends to be bearish. On the last day of January 2023, amidst a strong bull market, the famed investor delivered a simple yet resounding recommendation — sell.
Following Burry’s recommendation blindly would have led to significant missed profits
On the day, the S&P 500 benchmark index stood at approximately 4,076 points, having marked a 1.5% rise in the preceding 24 hours. At press time on January 17, 2024, the index had risen to 6,003 — equating to a 47.20% rally.
However, credit where credit is due — the Scion Asset Management CEO admitted that he had made a mistake on March 30, 2023 — at the time, the S&P 500 had risen to 4,109.
While some might argue that Burry is losing his touch, throughout 2024, his portfolio has netted an approximate return of 74.24%. Still, this notable misstep is a much-needed reminder that nothing, not even predictions from some of Wall Street’s best, can replace research and due diligence.
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