Michael Burry Letter Checklist: Never Miss a Key Step
A Michael Burry letter is one of the most information-dense documents in value investing, covering not just current positions but the specific analytical reasoning and macroeconomic warnings that drove each one. Burry wrote detailed investor letters throughout Scion Capital's history from 2000 to 2008. Those letters are now widely studied because they document, in real time, the thinking that led to both his extraordinary early stock returns and the Big Short trade. This checklist tells you exactly what to look for when you read any of them.
Key Takeaways
- Burry's investor letters from 2000 to 2008 are primary source documents for understanding his methodology, not marketing materials.
- Each letter contains specific stock theses built on quantitative screens for low price-to-book, high free cash flow yield, and identified catalysts.
- His macro warnings appear consistently from 2003 onward, building the housing thesis that culminated in the 2007-2008 credit default swap payout.
- Reading the letters in sequence reveals how he updated his thesis as data changed, which is more valuable than any single letter in isolation.
- His short letters after 2013 are public posts rather than formal investor communications, but they follow the same analytical structure.
- The checklist below extracts the recurring analytical patterns so you can apply them to any stock you evaluate today.
Where to Find Michael Burry Letters
Burry's original Scion Capital investor letters from 2000 to 2008 circulate widely across finance forums and have been compiled on several value investing archive sites. They are not published on any official Scion Asset Management website because the current entity does not take outside investors and has no investor communications to publish.
The most complete set available includes letters from:
- 2001 (Q1-Q4 letters explaining early position theses)
- 2002 (letters during the dot-com crash explaining his avoidance of tech)
- 2005 (the first letter disclosing credit default swap positions)
- 2006 (letters explaining why he held through premium losses)
- 2007 (the letters during the trade's validation phase)
His post-2013 communications take the form of public social media posts and rare interview statements. These are shorter and less formal but use the same analytical vocabulary.
The Michael Burry Letter Checklist
Use this checklist each time you read a Burry letter, whether original Scion Capital communications or reconstructed post-2013 analysis.
Section 1: Macro Framework Check
- What economic environment does Burry describe as current? (credit expansion, contraction, neutral)
- Does he identify a structural mispricing at the macro level? (housing in 2005, passive investing in 2020-2021)
- What is his stated time horizon for the macro thesis to resolve?
- Does he reference specific data sources? (Federal Reserve publications, mortgage prospectuses, BIS data)
- Has the macro thesis changed from the prior letter? If so, what new data drove the change?
Section 2: Individual Position Theses
- What is the stated reason for each position entry? (cheap relative to tangible book, high FCF yield, specific catalyst)
- Does each position thesis include a specific price target or intrinsic value estimate?
- What is the identified catalyst for price convergence to value?
- Is the position sizing disclosed? Large positions (5%+) indicate highest-conviction ideas.
- Does he acknowledge the downside risk explicitly? (Burry's letters consistently include what could go wrong)
Section 3: Balance Sheet Signals
- Does he reference debt levels as a concern for any position?
- Does he flag any accounting quality issues? (GAAP earnings diverging from free cash flow)
- Does he mention book value adjustments? (tangible vs. reported book, goodwill haircuts)
- Is there a reference to net working capital or net-net value?
Section 4: Portfolio Construction Signals
- How many positions does he describe? (Burry typically runs 10-15 concentrated holdings)
- Is there sector concentration? If so, is it intentional (sector thesis) or coincidental (screening result)?
- Does he mention any hedges? (put options, short positions, CDS)
- Has he added to or trimmed existing positions? The direction of sizing changes matters.
Section 5: Market Commentary Signals
- Does he compare current valuations to historical precedents? (his letters frequently cite 1929, 2000 analogies)
- Does he call out specific valuation metrics as stretched? (P/E, P/B, Shiller CAPE)
- Does he mention investor behavior as a signal? (his passive investing criticism from 2019-2020 is the clearest example)
How to Map His Letter Criteria to Modern Screens
The recurring analytical patterns in Burry's letters translate directly into screener filters. Here is the mapping:
| Burry Letter Criterion | Screener Filter | Typical Threshold |
|---|---|---|
| "Trading below tangible book" | Price-to-tangible book | Below 1.0 |
| "Strong free cash flow" | Free cash flow yield | Above 8% |
| "Earnings quality concerns" | FCF vs. net income divergence | FCF above 90% of net income |
| "Conservative balance sheet" | Net debt / EBITDA | Below 2.0 |
| "Overlooked by institutions" | Market cap | Below $2B |
| "Management aligned" | Insider ownership | Above 5% |
| "Catalyst present" | Recent buyback authorization or spinoff | Announced within 12 months |
You can run all quantitative criteria from the first five rows simultaneously in our screener. The last two require checking company filings directly, as Burry does in his letter research process.
The 2005-2008 Letters: What Made Them Different
The letters covering Scion Capital's credit default swap positions are distinct from the earlier stock-picking letters. Several features set them apart and explain why they have been studied so extensively.
Specificity of the thesis. Burry did not describe a general concern about housing. He described specific tranches of specific mortgage-backed securities, identified by prospectus reference number, that he believed were misrated. The level of primary source research was unusual for a stock-oriented fund manager.
Acknowledgment of ongoing losses. The 2006 letters acknowledge that the CDS positions were losing money in mark-to-market terms as premiums accumulated and the housing market had not yet turned. He explains why the thesis remains intact despite the paper losses. This is the model for how any investor should communicate about a position that is underperforming.
Transparency about investor pressure. Burry disclosed in later letters that investors had threatened legal action and demanded redemptions. His response was to explain the data-driven basis of his conviction and offer redemptions to those who wanted them. Several took the offer and missed the payout.
Applying the Letter Framework to Your Own Research
The value in Burry's letters is not the specific trades they describe. It is the research process they model. Before buying any stock, run the same checklist he applied:
- What is the quantitative basis for cheapness? (P/B, FCF yield, P/E)
- What is the specific catalyst that will close the gap between price and value?
- What is the downside scenario if the thesis is wrong?
- What data would change your mind?
The last question is the most important. Burry's letters from 2006 show he had explicitly modeled what would need to be true for his housing thesis to be wrong. Because he had thought through the falsification criteria in advance, he could distinguish between noise (the ongoing premium payments) and a genuine thesis failure (if housing prices had continued rising past his modeled tipping point with the loan structure he had identified).
Further reading: SEC EDGAR · Investopedia
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 — related ValueMarkers analysis
- Cheap Stocks To Buy Now Under 1 Dollar — 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 between 2007 and 2008, when his credit default swap positions against subprime mortgage-backed securities paid out. His fund, Scion Capital, returned approximately $700 million in profits to outside investors. His estimated personal net worth of $300 million reflects those 2008 proceeds compounded over 15+ years of private investing at Scion Asset Management.
how to invest in water like michael burry
Burry's water investment thesis centers on agricultural land with embedded water rights, which is not directly accessible to retail investors. The publicly listed approximations include water infrastructure ETFs (PHO, FIW), water utility companies, and agricultural REITs with significant water-intensive land holdings. Apply the same free cash flow yield and tangible book value screens you would use for any Burry-style equity screen when evaluating listed water companies.
how much is michael burry worth
Michael Burry's estimated net worth is approximately $300 million as of 2026. This is built almost entirely from investment returns, not management fees, because he has managed only his own capital at Scion Asset Management since 2013. His wealth figure is modest relative to his media profile because he chose to step away from the AUM-based fee model that produced much larger fortunes for managers like Ray Dalio and Howard Marks.
what is michael burry investing in now
Based on the most recent 2026 13F filings, Burry's disclosed positions reflect his consistent deep value criteria: low price-to-tangible-book, high free cash flow yield, and sectors trading at multi-year discounts to the broader market. He has also disclosed put positions against broad equity index ETFs as portfolio hedges. Exact current positions are available through our guru tracker, updated after each quarterly filing deadline.
what is michael burry investing in
Burry's long-term investment themes include concentrated deep value equities (increasingly global, not U.S.-only), agricultural land and water rights outside listed markets, and periodic macro hedges against broad market overvaluation. His letters consistently identify companies that institutional investors avoid due to size or sector unfashionability, trading at discounts to net asset value with strong free cash flow.
What is michael burry letter?
A Michael Burry letter is an investor communication written by Burry during his time running Scion Capital (2000-2008), detailing his current investment theses, macro outlook, and portfolio construction logic. The letters are significant because they document, in real time, the quantitative research process that produced exceptional returns and, ultimately, the trade that correctly anticipated the 2008 housing collapse. They are now primary source references for understanding deep value investing methodology.
Follow Michael Burry's latest disclosed positions in real time with our guru tracker, which tracks Scion Asset Management 13F filings alongside 40+ other major value investors.
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.