Last week, we wrote a quick post on Michael Burry of Scion Capital. Because of that post I received about 50 requests to share any information I had on Dr. Burry. A few years ago, a friend told me about Michael Burry's archive on Silicon Investor. To all those interested, you can find the various threads and messages here (Michael Burry's Archive). It is amazing to me that he wrote 3304 posts in the span of 5 years. Over the next few months, I will try to add some commentary here and there from what I've learned from Dr. Burry. In the meantime though, I'd like to speak of two quotes I found from his archives that I think are particular provoking. (As an aside, I have no idea if Dr. Burry would agree with his own commentary 12 or so years after he wrote these in the last 90s).
"Wow, this is getting really interesting. People (read: more than one) are taking time out of their day to come the value investing thread and tell us how irrelevant value investing is. At about the same time, friends and acquaintances are losing all patience with my talk about value but perk up when someone says "this one will double by December." These are the same ones that say, "I'm making 40%" and expect it to continue. Recently two people approached me about helping them do commodities for even bigger gains - 30-40% in stocks isn't enough. One of them thinks commodities aren't enough, he wants options on S&P futures.As I run a value investing web site, I can also tell you that I approach 200 hits/day when the market shakes out like in October and January, but am down to 60-70 hits/day now. People don't need ideas - they know to just pile into the stocks everyone talks about, a strategy that has worked well the last 15 years.I tell my editor that Dell at 140 is an albatross that has just been shot, and he says no way, the money flow is just too strong. That money flow brought it to around 122 pre-split within a few days.Certainly is interesting...last year I was bearish on valuation, but never before have I had so many people slap me in the face with their impatience with value investing."
Last year I told you that we would also promptly complete a succession plan for the investment job at Berkshire, and we have indeed now identified four candidates who could succeed me in managing investments. All manage substantial sums currently, and all have indicated a strong interest in coming to Berkshire if called. The board knows the strengths of the four and would expect to hire one or more if the need arises. The candidates are young to middle-aged, well-to-do to rich, and all wish to work for Berkshire for reasons that go beyond compensation.
"IMO, the biggest impediment to investing in the spirit of Buffett is the idea that somehow we can be a 100% imitator of him and see the same success. That anyone could be a perfect imitator of his approach strikes me as ridiculous. Try compounding the 10% difference between even your best imitator and Buffett over 30 years.I don't have it down yet. But in terms of investing in the spirit of Buffett (rather than in his mirror image), neither does anyone else here that I can see. I'm young. I'm reading a lot and continuously reviewing and updating my approach as new revelations occur. Remember I said "Buffett-like stock for me," not you. If it was that easy for you to see, I'd be disappointed. I'm certainly glad I can't find anyone to agree with me on this. If anything, it indicates I'm headed in the right direction."