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Rupert Hargreaves
Rupert Hargreaves
Articles (687)  | Author's Website |

5 Lessons From Michael Burry

Lessons from Burry's early blogs to help you improve your investing process

September 14, 2016

About the author:

Rupert Hargreaves
Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors.

Rupert holds qualifications from the Chartered Institute for Securities & Investment and the CFA Society of the UK. He covers everything value investing for ValueWalk and other sites on a freelance basis.

Visit Rupert Hargreaves's Website


Rating: 5.0/5 (22 votes)

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Comments

fung9815
Fung9815 - 2 years ago    Report SPAM

I read somewhere before on his "technical" approach, it puzzled me alot. Burry has been an inspiring figure to me because his approach makes a lot of sense, except for this.

A true value investor shouldn't be fear of share price breaking support. If we believe in our investment thesis, lower price means even better value for us to grab.

If I have to guess, I think Burry's accumulating method is very much one-off. He typically allocates a portion of his portfolio to a stock, which he believes it is very safe fundamentally and technically (support base), he will hit it hard and has no intention to average down because he has fully utilized his bullets. With that approach, he is tend to invest fully in his portfolio. His approach is very aggressive as compared to Seth Klarman (Trades, Portfolio)'s one.

Klarman is a much more conservative investor. He keeps cash and accumulate stocks slowly, thinking that no one knows how the market will behave. So he can always buy at lower price. That said, both Klarman and Burry run very concentrated portfolio, and most importantly, deliver great returns.

Lateral Capital Management
Lateral Capital Management - 2 years ago    Report SPAM

It turns out that there are quite a few value managers with impressive track records who incorporate technical analysis to different degrees. I have personally met or worked with several. They just don't write books about it or mention it to the media.

The main argument in favor of a value investor applying some sort of technical analysis is that it can protect the fund against the negative information which is not yet publicly disclosed by a company. Even in the age of Reg FD there is still often a time lag between price movements and information releases. (The flip-side being, of course, that it may cause a value investor to miss out on lucrative opportunities and/or reduce their overall gains). Even so, many value investors view the application of technical analysis as equivalent to buying relatively cheap insurance on their investments.

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