Michael Burry Explained: A Clear Guide for Investors

Michael Burry Explained: A Clear Guide for Investors

Michael Burry is the physician-turned-hedge-fund-manager who correctly predicted the collapse of the U.S. housing market in 2008 and bet $1.3 billion of his investors' money against it through credit default swaps. He is not a market commentator. He is a systematic, data-driven stock picker who built his reputation through quantitative analysis long before the Big Short trade. Today he runs Scion Asset Management as a private fund, managing only his own capital and filing quarterly 13Fs that investors study closely for signals about where concentrated deep value is emerging.

Key Takeaways

• Michael Burry trained as a neurologist and built his early investing reputation posting stock analysis on finance message boards during his medical residency in the late 1990s.
• He launched Scion Capital in 2000, returned 55% in year one while the S&P 500 fell 9.1%, and beat the market for eight consecutive years through 2007.
• The Big Short trade netted roughly $100 million for Burry personally and $700 million for Scion Capital clients.
• After returning outside capital in 2008, he relaunched as Scion Asset Management in 2013, managing only his own money.
• His current investment approach is concentrated deep value: 10-15 positions, each trading at significant discounts to tangible book value with high free cash flow yields.
• His macro concerns since 2020 include passive investing index concentration, global debt levels, and water scarcity as a long-term structural theme.

Background: Physician to Fund Manager

Michael James Burry was born in 1971. He completed a medical degree at Vanderbilt University, then a neurology residency at Stanford Medical Center. During the residency he posted stock research on Silicon Investor and other finance forums late at night after shifts, building a following for the quality and specificity of his analysis.

A key early observation from his message board posts: he was applying quantitative screens from Benjamin Graham's The Intelligent Investor and Security Analysis to find small-cap companies trading below their net asset value. This was not a novel methodology. It was rigorous application of a well-established framework to stocks that institutional investors ignored because of size.

He attracted seed capital from investors including Joel Greenblatt, the fund manager and author who had read Burry's online analysis. With that backing, he launched Scion Capital in November 2000.

Scion Capital: The Early Track Record

The early years of Scion Capital established the methodology that Burry applies to this day. He focused on:

• Companies trading below tangible book value (P/B below 1.0)
• Businesses generating consistent free cash flow despite depressed prices
• Industries or companies that institutional investors avoided due to size, sector stigma, or temporary earnings change
• Catalysts that would force price to converge with value

The returns through 2003 were among the best of any fund operating through the dot-com bust:

By 2004, Scion was managing over $600 million. Burry had demonstrated that systematic application of Graham-style screens to ignored segments of the market produced returns that were both high in absolute terms and negatively correlated with broad market drawdowns.

The Big Short: How the Trade Actually Worked

In 2004 and 2005, Burry shifted attention from equities to the mortgage bond market. He read thousands of pages of subprime mortgage-backed security prospectuses and identified that the underlying loans had characteristics the rating agency models did not capture: adjustable-rate structures that would reset to unaffordable levels, minimal documentation requirements, and geographic concentration in bubble markets.

He began buying credit default swaps (CDS) in 2005. A CDS is an insurance contract: the buyer pays a premium periodically and receives a large payout if the referenced bond defaults. Burry paid approximately $80 million in premiums over two years before the trade paid out.

When the U.S. housing market began collapsing in 2007 and the bonds Burry had bought protection on started defaulting, the swaps paid out at face value. Scion Capital returned approximately $700 million to investors. Burry himself received roughly $100 million.

The trade required holding an unpopular position for over two years while it lost money. Burry's investors threatened to redeem, hired lawyers, and demanded he unwind the positions. He refused because the data supported the thesis. That discipline, the willingness to hold a quantitatively supported contrarian position through extended paper losses, is the character trait that the Big Short trade demonstrates most clearly.

How Michael Burry Invests Today

After returning outside capital in 2008, Burry closed Scion Capital. He relaunched as Scion Asset Management in 2013, a private vehicle managing his personal capital. Because he manages over $100 million, he is required to file quarterly 13Fs disclosing U.S.-listed long positions.

His current methodology has several consistent features:

Concentration. Scion's 13F filings typically show 10-20 positions. Burry does not believe in diversification for its own sake. Each position is a high-conviction bet on a specific mispricing.

Deep value criteria. His disclosed positions consistently show low P/E ratios (typically below 15), low price-to-book ratios (often below 1.0 on tangible book), and high free cash flow yields (typically above 8%). These are not growth stocks. They are businesses where the price is substantially below what the assets and cash flows are worth.

Geographic diversification. Since around 2018, his filings have included non-U.S. names, particularly South Korean equities and Chinese ADRs. This reflects his view that U.S. market valuations have become disconnected from underlying business value in ways that make international markets relatively more attractive.

Macro hedges. Alongside his long equity positions, Burry has periodically disclosed large put option positions against broad market ETFs including SPY and QQQ. These are not directional macro bets in the Soros sense. They are portfolio hedges against a scenario he considers underpriced by the market.

What Michael Burry Is Investing in Now

As of the most recent 13F filing cycle (early 2026), Burry's disclosed positions reflect the same deep value approach with a current focus on:

• Companies in sectors that have underperformed the broader market by 30%+ over the prior two years
• Businesses with net cash positions or net debt below 1x EBITDA
• Industries with pricing power that has not yet been reflected in earnings estimates

He has publicly commented on what he views as index bubble risk: the concentration of passive index fund flows into a small number of mega-cap stocks (AAPL at P/E 28.3, MSFT at P/E 32.1) creates a structural distortion where everything else in the market trades at discounts simply because it is not in the top 10 of the S&P 500 by weight. His positions typically exploit that discount.

The water thesis, which he first articulated publicly in 2010, remains a long-term structural view. He has not disclosed direct water company positions in recent filings, but his agricultural land holdings (which are not disclosed in 13Fs, as they are not publicly listed securities) are understood to include water rights.

The Screening Framework Behind His Investments

Burry's investment process, reconstructed from his investor letters, public interviews, and message board archives, follows a five-step sequence:

1. Scan for cheap assets: Filter for P/B below 1.0 on tangible book. This removes the majority of the market.
2. Check cash generation: Require free cash flow yield above 8%. This removes asset-heavy businesses that cannot monetize their assets.
3. Verify solvency: Require net debt below 2x EBITDA. This removes companies that could be impaired in a credit tightening.
4. Identify a catalyst: Look for a reason the price will converge to intrinsic value. Share buybacks, management changes, spinoffs, and sector rotation all qualify.
5. Size the position: Allocate 5-10% of the portfolio to positions that pass all four prior tests.

This process is systematic but not purely quantitative. Steps one through three are screens. Step four requires reading filings. Step five requires discipline about position sizing.

The screener we built at ValueMarkers handles steps one through three across 120+ indicators on 73 exchanges. You can run Burry-style filters on international markets in the same interface you use for U.S. equities.

Why Investors Follow His 13F Filings

Burry's 13Fs attract disproportionate attention for a fund of his size. Scion Asset Management's reported AUM is typically between $200 million and $400 million, which is small by institutional standards. The attention is not because of the size. It is because of the track record.

A manager who beat the market by 60+ percentage points in 2001 and 2002, then correctly identified and profited from the single largest financial crisis since the Great Depression, has a demonstrated ability to find mispricings that the consensus misses. The 13Fs are evidence of where that analysis points currently.

The 45-day lag is the standard caveat. By the time a 13F is filed, the position may have been partially or fully exited. Burry himself noted in 2021 that mimicking his disclosures is counterproductive for this reason. The value in reading his filings is not in copying his trades. It is in understanding the screening logic that produced them.

Further reading: SEC EDGAR · Investopedia

Why michael burry scion Matters

This section anchors the discussion on michael burry scion. The detailed treatment, formula, and worked examples appear in the body of this article above. The points below summarize the most important takeaways for value investors who want to apply michael burry scion in real portfolio decisions. ValueMarkers exposes the underlying data on every covered ticker via the screener and stock profile pages, so the concepts in this article translate directly into actionable filters.

Key inputs for michael burry scion

See the main discussion of michael burry scion in the sections above for the full treatment, including the inputs, the calculation methodology, the typical sector benchmarks, and the most common pitfalls to avoid. The ValueMarkers screener lets value investors filter the full universe of 100,000+ stocks across 73 exchanges using michael burry scion alongside the rest of the 120-indicator composite, with sector percentiles and historical trends shown on every stock profile.

Sector benchmarks for michael burry scion

See the main discussion of michael burry scion in the sections above for the full treatment, including the inputs, the calculation methodology, the typical sector benchmarks, and the most common pitfalls to avoid. The ValueMarkers screener lets value investors filter the full universe of 100,000+ stocks across 73 exchanges using michael burry scion alongside the rest of the 120-indicator composite, with sector percentiles and historical trends shown on every stock profile.

Related ValueMarkers Resources

• DCF Intrinsic Value — DCF captures how cheaply a stock trades relative to its fundamentals
• Pe Ratio — Glossary entry for Pe Ratio
• Roe — Glossary entry for Roe
• Michael Burry Net Worth — related ValueMarkers analysis
• Michael Burry Letter — related ValueMarkers analysis
• Dividend Growth Investing Strategy Explained — related ValueMarkers analysis

Frequently Asked Questions

how much money did michael burry make

Michael Burry personally netted approximately $100 million from the Big Short trade in 2007-2008. His fund, Scion Capital, returned approximately $700 million in profits to outside investors. Since relaunching as Scion Asset Management in 2013, his personal gains are not separately disclosed, but his estimated net worth of $300 million reflects continued compounding of his 2008 proceeds through concentrated deep value investing.

how to invest in water like michael burry

Burry's water investment thesis is executed primarily through agricultural land with water rights, which is not accessible to retail investors. The publicly listed equivalent includes water utility companies, water infrastructure ETFs such as PHO (Invesco Water Resources ETF), and agricultural companies with significant irrigated land holdings. Screening those companies for free cash flow yield and tangible book value using the same criteria Burry applies to equities generally is the closest retail approximation.

how much is michael burry worth

Michael Burry's net worth is estimated at approximately $300 million as of 2026. This figure is built primarily from the $100 million he personally netted from the 2008 Big Short trade and subsequent returns from Scion Asset Management, which has managed only his personal capital since 2013. Unlike Ray Dalio ($15.4 billion) or Howard Marks ($2.1 billion), Burry's wealth reflects his investment returns alone, not management or performance fees on large AUM.

what is michael burry investing in now

As of early 2026 13F filings, Burry's disclosed positions include equities in sectors trading at significant discounts to the broad market, with consistent characteristics of low P/E, low price-to-tangible-book, and high free cash flow yield. He has also disclosed put positions against broad market index ETFs as hedges. His exact current positions change quarterly; our guru tracker shows the most recent disclosed holdings.

what is michael burry investing in

Burry's long-term investment themes span three areas: deep value equities (global, not U.S.-only), agricultural land and water rights, and macro hedges against what he views as overvalued equity market indices. At the individual stock level, his positions are typically companies in unfashionable sectors that trade at discounts to their net asset value with strong free cash flow generation. He avoids high-multiple growth stocks as a rule.

What is michael burry?

Michael Burry is a former physician and hedge fund manager, best known for correctly predicting the 2008 U.S. housing market collapse and profiting from it through credit default swaps. He founded Scion Capital in 2000, grew it to over $600 million in assets through consistently strong returns, and then relaunched as the private Scion Asset Management in 2013 after returning all outside capital. He is widely studied among value investors for his quantitative screening methodology and his willingness to hold contrarian positions through extended periods of underperformance.

Follow Michael Burry's latest disclosed positions alongside 40+ other major value investors with our guru tracker, updated within days of each quarterly 13F filing.

Written by Javier Sanz, Founder of ValueMarkers. Last updated April 2026.

Ready to find your next value investment?

ValueMarkers tracks 120+ fundamental indicators across 100,000+ stocks on 73 global exchanges. Run the methodology above in seconds with our stock screener, or see today's top-ranked names on the leaderboard.

Related tools: DCF Calculator · Methodology · Compare ValueMarkers

Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.