Scion Asset Management

[turar]

For what it's worth, 5 years ago I took a look at his VIC ideas (assuming michael99 is him), and most didn't work out well in the end.

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/learning-from-michael-burry/msg54757/#msg54757

[Graham Osborn]

Not just coat tailing Burry. Saudi Arabia and other "water poor" countries are buying US farmland and shipping the crops home.

 

Great info, thanks.  Land is so ubiquitous it would seem there would be a way to play it if you looked broadly (including internationally) and long term.  I do think land values could take a hit in a credit crunch along with everything else, but populations are growing and the true value of basic food/ water commodities (particularly those without a futures market) could be vastly different than nominally believed.  I've been thinking of the Saudi purchases along with Canada/ other EMs as partly a currency hedge but that may well be missing the broader picture.

 

As Mitchell wrote:

 

"land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts"

 

The nice thing about land is its quantity and general properties are clearly known (unlike precious metals or oil for instance).  There will always be less of it per capita until the world's aggregate population starts declining, and at that point we'll have bigger problems to worry about.

 

I might even go so far as to say that if I had 100 billion and wanted to do no work for the rest of my life, buying land in 3-5 years once the next commodity bull market begins might be the most logical secular trade.  But I would definitely wait for a credit crunch to get some good prices.

 

 

[undervalued]

Not just coat tailing Burry. Saudi Arabia and other "water poor" countries are buying US farmland and shipping the crops home.

 

Great info, thanks.  Land is so ubiquitous it would seem there would be a way to play it if you looked broadly (including internationally) and long term.  I do think land values could take a hit in a credit crunch along with everything else, but populations are growing and the true value of basic food/ water commodities (particularly those without a futures market) could be vastly different than nominally believed.  I've been thinking of the Saudi purchases along with Canada/ other EMs as partly a currency hedge but that may well be missing the broader picture.

 

As Mitchell wrote:

 

"land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts"

 

The nice thing about land is its quantity and general properties are clearly known (unlike precious metals or oil for instance).  There will always be less of it per capita until the world's aggregate population starts declining, and at that point we'll have bigger problems to worry about.

 

I might even go so far as to say that if I had 100 billion and wanted to do no work for the rest of my life, buying land in 3-5 years once the next commodity bull market begins might be the most logical secular trade.  But I would definitely wait for a credit crunch to get some good prices.

 

I am pretty sure if I have 100 billion, SPY will do me just fine for the rest of my life also.

[Homestead31]

i have no idea what burry's performance has been over the last few years, but he has made comments in interviews indicating that he has remained bearish since the crisis.

 

its been a tough couple of years to make money if you're bearish.

[randomep]

i have no idea what burry's performance has been over the last few years, but he has made comments in interviews indicating that he has remained bearish since the crisis.

 

its been a tough couple of years to make money if you're bearish.

 

I recall either in the Big Short or The Greatest Trade Ever, he felt bearish in 2001-2003 period when he made big gains. He said it didn't matter he was still picking great stocks.

[ZenaidaMacroura]

Not just coat tailing Burry. Saudi Arabia and other "water poor" countries are buying US farmland and shipping the crops home.

 

Great info, thanks.  Land is so ubiquitous it would seem there would be a way to play it if you looked broadly (including internationally) and long term.  I do think land values could take a hit in a credit crunch along with everything else, but populations are growing and the true value of basic food/ water commodities (particularly those without a futures market) could be vastly different than nominally believed.  I've been thinking of the Saudi purchases along with Canada/ other EMs as partly a currency hedge but that may well be missing the broader picture.

 

As Mitchell wrote:

 

"land is the only thing in the world worth working for, worth fighting for, worth dying for, because it's the only thing that lasts"

 

The nice thing about land is its quantity and general properties are clearly known (unlike precious metals or oil for instance).  There will always be less of it per capita until the world's aggregate population starts declining, and at that point we'll have bigger problems to worry about.

 

I might even go so far as to say that if I had 100 billion and wanted to do no work for the rest of my life, buying land in 3-5 years once the next commodity bull market begins might be the most logical secular trade.  But I would definitely wait for a credit crunch to get some good prices.

 

I am pretty sure if I have 100 billion, SPY will do me just fine for the rest of my life also.

 

100 billion in most things would equal "being fine" the rest of your life.

[Green King]

neither will be a good bet since there is a lot of black swan risk in those assets. Communism, taxation, populism, advancement of technology making the asset less or no longer productive. Like what happened to textile looms for Berkshire Hathaway. 

 

The best asset would be to improve your skill in something. Since it cannot be take away from bankruptcy. preferably something cognitive based.

 

The second would be to do great things or heroic acts for society and people around you as an whole since the good will generated from them could last generations. 

 

Third would be a mix or productive businesses, portable wealth, and land.

[argonaut]

Perhaps this is addressed elsewhere, but the actual manager listed for this report is not burry but his cfo from when he ran scion so perhaps these are not burry's picks??

[muscleman]

Does anyone know why Mike Burry bought heavily into COTY? Over 30% of his portfolio into this name.  :o

 

What's good about it?

I read a few articles but can't find any. Expensive on P/E and EV/EBITDA. No growth. Maybe a little bit of synergy but don't see much upside.

Am I missing something obvious?

[bonkers]

Muscleman,

 

I believe this is essentially a story of experienced management working their magic on a partially neglected business. So evaluating how much good they get done is harder than in most cases. At least I find their plan quite impressive.

 

I assume you have already reconstructed the financials to reflect the merged entity. My pro forma is something like adj.NI 749, adj.EBITDA 1777, and net debt of 6158. So today it's selling at P/E = 19, EV/EBITDA = 11.5.

 

The comps are trading already higher, around P/E = 26-27, but that does not help if you consider them overvalued. And as you say, growth is very weak, +2-3 % p.a. unless they are going to take significantly market share.

 

However, there are synergies promised to 2020, at least 400 + something in distribution. Also, I believe they have guided EPS of 1.53 in 2020, that times a fair multiple - say P/E = 23 if you think the management is exceptional - plus the cash flow generated on the way...and you get IRR of 20+ % for a few years.

 

The integration will depress profits during first year or two, but the mgmt is well invested to make the plan work.

[CorpRaider]

Could have also been running the arb spread, right? Given the delay in the reporting.  Pretty sure this was recently discussed in another thread.  Definitely can't just use the simple trailing anything; they just bought like 60%+ of the go forward company.

[meiroy]

 

 

Here we go, 13F:

 

https://whalewisdom.com/filer/scion-asset-management-llc#tabholdings_tab_link

[UK]

https://www.bloomberg.com/news/articles/2019-08-28/the-big-short-s-michael-burry-sees-a-bubble-in-passive-investing

[fareastwarriors]

Big Short’s Michael Burry Reveals His Picks of Undervalued Japanese Companies

 

 

https://www.bloomberg.com/news/articles/2019-09-05/burry-s-picks-of-undervalued-japanese-companies-rise-in-tokyo?srnd=premium-asia

[Paarslaars]

https://www.bloomberg.com/news/articles/2019-08-28/the-big-short-s-michael-burry-sees-a-bubble-in-passive-investing

 

Don't really understand why he believes ETF's are a bubble.

It's simply a shift from actively managed funds... no reason to expect all the money to suddenly pour out without new money pouring in.

 

Unless there is a panic but then I don't see why this would be any different than a general stock market crash.

[RuleNumberOne]

If you look at S&P 500 stocks with a small average daily volume traded, you will see they have very high betas.

 

This is true of all recent IPOs (IPOs within the last 5 years). They deliberately float a small number of shares and watch the price shoot up on low volume.

 

These low-float stocks haven't been tested in a bear market when employees throw in the towel and sell.

 

Right now, most employees of companies that have gone IPO are still holding onto their pre-IPO shares. If they capitulate during a bear market, there will be a huge amount of stock put onto the market compared to average daily volume.

 

 

https://www.bloomberg.com/news/articles/2019-08-28/the-big-short-s-michael-burry-sees-a-bubble-in-passive-investing

 

Don't really understand why he believes ETF's are a bubble.

It's simply a shift from actively managed funds... no reason to expect all the money to suddenly pour out without new money pouring in.

 

Unless there is a panic but then I don't see why this would be any different than a general stock market crash.

[RuleNumberOne]

My guess: S&P 500 has this problem to a very small degree. Russell1000 and NASDAQ should be having the problem though. Every IPO makes it into Russell 1000.

 

News articles focus on the S&P 500, but there is a lot of bubbly in the Russell 1000 that has not been allowed into the S&P 500.

 

Needless to say, DJIA would not have the low-float problem at all. Probably nobody buys the DJIA index funds.

 

If you look at S&P 500 stocks with a small average daily volume traded, you will see they have very high betas.

 

This is true of all recent IPOs (IPOs within the last 5 years). They deliberately float a small number of shares and watch the price shoot up on low volume.

 

These low-float stocks haven't been tested in a bear market when employees throw in the towel and sell.

 

Right now, most employees of companies that have gone IPO are still holding onto their pre-IPO shares. If they capitulate during a bear market, there will be a huge amount of stock put onto the market compared to average daily volume.

 

 

https://www.bloomberg.com/news/articles/2019-08-28/the-big-short-s-michael-burry-sees-a-bubble-in-passive-investing

 

Don't really understand why he believes ETF's are a bubble.

It's simply a shift from actively managed funds... no reason to expect all the money to suddenly pour out without new money pouring in.

 

Unless there is a panic but then I don't see why this would be any different than a general stock market crash.

[stahleyp]

new (very brief) interview with Burry:

 

https://finance.yahoo.com/news/big-short-michael-burry-bearish-101844573.html

[Foreign Tuffett]

Burry is now on Twitter.

 

@michaeljburry

 

And yes, it is actually him

 

https://www.bnnbloomberg.ca/big-short-s-michael-burry-joins-twitter-with-pleas-to-end-covid-19-lockdown-1.1417820

[mccole72]

Burry is now on Twitter.

 

@michaeljburry

 

And yes, it is actually him

 

https://www.bnnbloomberg.ca/big-short-s-michael-burry-joins-twitter-with-pleas-to-end-covid-19-lockdown-1.1417820

 

Have you done any digging into whether this is really Burry? The pics on this twitter page scream fake to me. I know Bloomberg "confirmed" it was really him, but all they said was that they had an email exchange with him. Idk how foolproof that is.

[CorpRaider]

According to his brother it is him.  I am pretty sure it is him.  He's on the spectrum, so maybe not perfectly equipped to evaluate the response of the public (he is also reportedly very long GME and Jos A Bank, so highly conflicted), I am looking to Gates for much better (while still exceptionally rational) analysis on the topic.

[sundin]

According to his brother it is him.  I am pretty sure it is him.  He's on the spectrum, so maybe not perfectly equipped to evaluate the response of the public (he is also reportedly very long GME and Jos A Bank, so highly conflicted), I am looking to Gates for much better (while still exceptionally rational) analysis on the topic.

 

It's him

 

https://www.bnnbloomberg.ca/big-short-s-michael-burry-joins-twitter-with-pleas-to-end-covid-19-lockdown-1.1417820