Author Topic: Scion Asset Management  (Read 33485 times)

Poor Charlie

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Re: Scion Asset Management
« Reply #20 on: February 17, 2016, 04:15:12 PM »
The filing is as of 12/31/15, so that's before the big 30% drop in BAC.

Its possible that its leftover from investments made in 2012

Scion Asset Management began around Q4 2013. 



I think anyone who has read Burry will find that portfolio as stated very disturbing.  How can he be long BAC and C now?  There is something else going on here.

I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital.  This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis.  He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. 

More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis.  A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc).  As far as I know only Cornwall Capital have maintained their impressive returns.   

I still think there are very few investors of Burry’s caliber.  He's one of only a handful of managers I would invest with.

Do you mind sharing Cornwall's returns ? Thank you in advance
Cheers
GK

52% gross / 40% net


ZenaidaMacroura

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Re: Scion Asset Management
« Reply #21 on: February 17, 2016, 10:11:01 PM »
The filing is as of 12/31/15, so that's before the big 30% drop in BAC.

Its possible that its leftover from investments made in 2012

Scion Asset Management began around Q4 2013. 



I think anyone who has read Burry will find that portfolio as stated very disturbing.  How can he be long BAC and C now?  There is something else going on here.

I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital.  This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis.  He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. 

More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis.  A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc).  As far as I know only Cornwall Capital have maintained their impressive returns.   

I still think there are very few investors of Burry’s caliber.  He's one of only a handful of managers I would invest with.

Do you mind sharing Cornwall's returns ? Thank you in advance
Cheers
GK

52% gross / 40% net
Where do you find information on cornwall post crisis/do they file?

Green King

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Re: Scion Asset Management
« Reply #22 on: February 17, 2016, 10:20:26 PM »
The filing is as of 12/31/15, so that's before the big 30% drop in BAC.

Its possible that its leftover from investments made in 2012

Scion Asset Management began around Q4 2013. 



I think anyone who has read Burry will find that portfolio as stated very disturbing.  How can he be long BAC and C now?  There is something else going on here.

I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital.  This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis.  He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. 

More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis.  A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc).  As far as I know only Cornwall Capital have maintained their impressive returns.   

I still think there are very few investors of Burry’s caliber.  He's one of only a handful of managers I would invest with.

Do you mind sharing Cornwall's returns ? Thank you in advance
Cheers
GK

52% gross / 40% net

Thanks Poor Charlie.  Sounds like what one should expect if what they say they are doing is still working.
GK

Graham Osborn

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Re: Scion Asset Management
« Reply #23 on: February 18, 2016, 10:19:51 AM »
Just answered my own question - these are high cost shares :)

What do you mean these are high cost shares? You don't think Burry could see value in
BAC and Citi at huge discounts to tangible book value?

Like most of my thinking (:)) this is purely hypothesis-driven - Burry has consistently generated remarkable returns over the TR which can be reliably tracked.  Therefore I hypothesize he has continued to do so, and tried to reconcile that with the 13F which is admittedly just part of a single time point.  I asked myself why I would hold that portfolio.  And during 2008-09 I would have bought BAC and C (or think I would have - my dad did at least :)) because I would have assumed they'd be bailed out.  And leverage would work in my favor in that case.  Same for things like CYH/ HCA.  These are highly leveraged and inconsistent with Burry's classic aversion to debt.  My assumption is that this basket was a secular bet on US QE policy and a rebound in highly leveraged sectors that were beaten down during the dislocation.  Of course, it's also possible he's just been drinking heavily since "Big Short" times and is now buying up the same institutions he publically decries just to pass the time..

Graham Osborn

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Re: Scion Asset Management
« Reply #24 on: February 18, 2016, 10:26:30 AM »
As to the current attractiveness of BAC and C, while I think their capital position and asset quality are somewhat improved post-crisis, they are now caught up in the typical reflexive regulatory backlash that closes a credit cycle.  The derisking climate is going to substantially reduce the ROE and scope of operations for the megabanks.  Concurrently they will have greater difficulty seeking a second bailout which is why their stocks are in decline - secular credit close and no parachute.  Burry knows all of this, and has likely sold off his megabanks positions by now along with his almond farms and heaven knows what else.

dabuff

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Re: Scion Asset Management
« Reply #25 on: February 18, 2016, 10:28:38 AM »
Nice thoughts.

Remember, cloning without thinking (halo effect) can kill - think ZINC, CHK, PKX.
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Poor Charlie

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Re: Scion Asset Management
« Reply #26 on: February 18, 2016, 10:59:10 AM »
The filing is as of 12/31/15, so that's before the big 30% drop in BAC.

Its possible that its leftover from investments made in 2012

Scion Asset Management began around Q4 2013. 



I think anyone who has read Burry will find that portfolio as stated very disturbing.  How can he be long BAC and C now?  There is something else going on here.

I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital.  This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis.  He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. 

More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis.  A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc).  As far as I know only Cornwall Capital have maintained their impressive returns.   

I still think there are very few investors of Burry’s caliber.  He's one of only a handful of managers I would invest with.

Do you mind sharing Cornwall's returns ? Thank you in advance
Cheers
GK

52% gross / 40% net
Where do you find information on cornwall post crisis/do they file?

There was a very good interview with Jamie Mai where he mentioned his returns over the last 9 year period (since they started taking outside capital).  I read the book (Market Wizards series) around early 2014 so the returns would not include the last few years. 

Graham Osborn

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Re: Scion Asset Management
« Reply #27 on: February 18, 2016, 01:04:07 PM »
The filing is as of 12/31/15, so that's before the big 30% drop in BAC.

Its possible that its leftover from investments made in 2012

Scion Asset Management began around Q4 2013. 



I think anyone who has read Burry will find that portfolio as stated very disturbing.  How can he be long BAC and C now?  There is something else going on here.

I have nothing to back this up but I doubt Burry is generating anything close to the returns he did at Scion Capital.  This is not an indictment of his investing abilities, it's more a reflection of the market environment post financial crisis.  He tends to invest in very distressed equities and resource companies (a la fairfax) which have not done as well as they did pre-crisis. 

More generally, it’s interesting to observe all the sub-prime 'heroes' post-crisis.  A surprising number have performed poorly over a multi-year period (Bass/Paulson/Whitney/Eisman/Whitebox/etc).  As far as I know only Cornwall Capital have maintained their impressive returns.   

I still think there are very few investors of Burry’s caliber.  He's one of only a handful of managers I would invest with.

I don't know much, but what I do know at least suggests that Burry is generating returns comparable to the Scion years, if less lumpy.  Examples:

1. Almond farms - look at farmland prices especially in Cali and the price of almonds relative to other commodities
2. Tech startups - VC since the crisis was one of the ultimate secular bets, and just one unicorn would put you in a very good place
3. Real estate and banking - I read somewhere that he turned around and bought these right after the implosion.  A buy and hold strategy would have played out well

If you are imaginative enough and willing to sacrifice liquidity returns can be generated under any market conditions.  He's a bit like a Soros or macro guy in that respect - he'll trade a market up and then trade it down again.  He has no allegiances.  The most interesting questions for me are:

1. What does the Asia-Pacific fund hold?
2. Has he reentered the CDS market?

The outsize profits generated by CDS holders in the last crisis have produced a wider appreciation and suspicion of CDS holders (even those who hold the bonds outright).  Interesting about the Novo Banco sovereign CDS which were effectively cancelled.  I wonder whether how he feels about domestic vs sovereign CDS, what he thinks about shorting CMBS in energy-exposed REITs.  I wonder many things, but given where the market has led me of late I would say there is a 99% probability he holds CDS of some type - if he has found a way to buy without the seller knowing its counterparty :)

Poor Charlie

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Re: Scion Asset Management
« Reply #28 on: February 18, 2016, 05:00:15 PM »

I don't know much, but what I do know at least suggests that Burry is generating returns comparable to the Scion years, if less lumpy.  Examples:

1. Almond farms - look at farmland prices especially in Cali and the price of almonds relative to other commodities
2. Tech startups - VC since the crisis was one of the ultimate secular bets, and just one unicorn would put you in a very good place
3. Real estate and banking - I read somewhere that he turned around and bought these right after the implosion.  A buy and hold strategy would have played out well


I don’t really want to discuss the non-public investments he’s made on a forum like this.  A google search will give you a good idea of his personal investments, both good and bad.  I didn’t mean to criticize Burry’s investing abilities in any way.  As I mentioned he’s one of only a few managers I would give money which, in my mind, is the ultimate endorsement.  He’s also something of an inspiration to me. 

What I meant to say was I doubt his new fund (Scion Asset Management) has generated the kind of relative returns his old fund (Scion Capital) did. 

I say this for two reasons:

-Over the roughly 8 years he ran Scion Capital (ending in Q3 2008) Burry made 6X (gross) when the indexes were down.  This is a record better than BPL, maybe even Appaloosa.  Will be very tough to match.

-Returns came largely from investments in very distressed equities.  As you know, he coined the term ‘ick investing’ to describe stocks people don’t want to own at any price.  This investment style tends to produce large winners and losers.  Pre-crisis it produced more winners than losers.  Post-crisis things have changed.  I know of very few deeply distressed contrarian ideas that have worked, but I can think of plenty of land mines (I’ve stepped on a few myself).  I’m not saying contrarian distressed ideas haven’t worked, just saying it has been a tougher game.

 
Once again, this is not a criticism of Burry.  I feel like telling some of you Burry hasn’t crushed the S&P is like telling a kid there’s no Santa.  Everybody has a tough time now and then, even the very best.

Parsad

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Re: Scion Asset Management
« Reply #29 on: February 18, 2016, 05:16:24 PM »
I feel like telling some of you Burry hasn’t crushed the S&P is like telling a kid there’s no Santa.

WHAT DO YOU MEAN THERE'S NO SANTA!  F**K YOU!  :)
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