Michael Burry

Burry is a pure fundamental analyst. He reads the actual documents.

Not the analyst summary. Not the ratings agency report.

The actual prospectus, the loan files, the footnotes. For the Big Short trade, he read thousands of individual mortgage loan documents.

Nobody else was doing that. Analysts were looking at aggregate statistics.

The aggregate statistics looked fine. The individual loans were a disaster.

His basic method: find something everyone is ignoring, do the work to understand why it''s mispriced, take a position, and wait. The waiting is the hard part.

He was short the housing market for two years before it collapsed. During those two years his investors were losing money on paper and threatening legal action.

He locked redemptions to prevent forced liquidation. He was right and it cost him two years of misery to prove it.

David Einhorn

Einhorn is a long/short fundamental investor. On the long side, he looks for cheap, misunderstood businesses where the market has gotten the story wrong.

On the short side, he looks for companies with accounting irregularities, unsustainable business models, or management teams making misleading claims. His edge historically was doing the detailed work that others skipped: actually reading the footnotes, actually questioning the numbers, actually calling the bluff in public.

He goes public with his short theses, which most short-sellers avoid. He presents at conferences.

He names names. This is controversial — critics say it''s market manipulation, supporters say it''s journalism.

The Allied Capital and Lehman Brothers situations suggest it''s at least occasionally correct.

Michael Burry

Read the documents. That is basically the whole philosophy.

Not the summary. Not the analyst report.

The actual documents. Most investors don''t do this because it''s tedious and slow and it requires a tolerance for complexity that most people don''t want to develop.

His second rule: be willing to be lonely. His housing short was a deeply contrarian position that most finance professionals thought was ridiculous.

He didn''t need their validation. He needed the math to work.

His third: factor in time when sizing a position. The housing market stayed wrong for two years.

Size your position so you can survive being right too early.

David Einhorn

Einhorn believes the market frequently misprices securities because most investors are lazy or short-term focused. His philosophy is that detailed, patient fundamental research creates an edge — not access, not algorithms, not macro calls.

He also believes that companies with accounting problems eventually get found out. He has framed his public short campaigns as a form of market policing: if management is lying, someone needs to say so.

He''s been called a hero and a villain for the same trade.

Michael Burry

He concentrates heavily. When he has a thesis, he puts a large portion of the fund into it.

He also used leverage on the housing trade — borrowing to buy credit default swaps amplified both the wait and the eventual payoff. His risk tolerance is high in the sense that he can hold a losing position for years if the fundamental analysis is intact.

It is low in the sense that he won''t touch anything he doesn''t deeply understand. He doesn''t trade momentum or narratives.

If the math doesn''t work, he''s not interested.

David Einhorn

Einhorn runs a concentrated long/short book with meaningful leverage. He''s comfortable holding short positions for years and absorbing paper losses while waiting for a thesis to play out.

He has described his approach as being comfortable with uncertainty as long as the fundamental analysis is sound. The problem is that being fundamentally right and being market-right are two different things, and the gap between them can be expensive.

Michael Burry

He lives in Saratoga, California. He is notoriously private — he has opened and deleted social media accounts multiple times after his market commentary attracted more attention than he wanted.

He occasionally posts about market risks and then goes quiet for months. He has a son with Asperger''s syndrome, and the experience led him to recognise similar traits in himself and pursue his own autism diagnosis as an adult.

He doesn''t do conferences. He doesn''t do interviews.

He files his quarterly 13F and lets the positions speak.

David Einhorn

Einhorn is known for being relatively frugal for a hedge fund manager of his stature. He''s a serious poker player, not a yacht person.

He has donated millions to various causes, including a significant amount through his winning poker tournament proceeds. He lives in New York.

He''s notably down-to-earth compared to the hedge fund world''s flashier personalities — no famous cars, no tabloid drama.

Michael Burry

The housing trade. In 2005, Burry read thousands of subprime mortgage loan documents and concluded the US housing market was built on loans that would eventually default in large numbers.

He persuaded Goldman Sachs and Deutsche Bank to sell him credit default swaps on mortgage-backed securities — essentially insurance that paid out when the mortgages defaulted. The banks thought he was wrong.

They were happy to take his premiums. In 2007–2008 the mortgages defaulted.

His investors made $700 million. Burry personally made about $100 million.

The banks that sold him the swaps needed government bailouts to survive.

David Einhorn

The Lehman Brothers short is the definitive win. Einhorn began shorting Lehman''s stock in early 2008.

He presented his thesis publicly at a Ira Sohn Conference in May 2008, citing specific accounting concerns about how the firm was valuing its real estate exposure. Lehman''s stock fell immediately.

The firm''s CEO famously called Einhorn a "short and distort" operator. On September 15, 2008, Lehman Brothers filed for bankruptcy.

Greenlight made over $1 billion on the trade. It is one of the most vindicated public short positions in financial history.

Michael Burry

The trade nearly destroyed him before it paid off. He locked investor redemptions to prevent forced liquidation of his position — probably the right call, but it created a legal and emotional nightmare that he''s described as one of the worst periods of his life.

He also closed Scion to outside investors after winning, which in hindsight was leaving behind an institutional money management career after one of the greatest trades in history. He''s never explained that decision fully.

It may have been the right one. It may not have been.

David Einhorn

The post-2015 period is where the story gets complicated. Greenlight significantly underperformed from 2015 onward.

The fund lost money in 2015, 2018, and 2020. Part of this was a structural problem: value investing broadly underperformed during the growth stock boom.

Part of it was specific bets that went wrong. His short of Tesla was particularly costly — Tesla''s stock rose dramatically while Einhorn remained convinced the company was overvalued, costing the fund hundreds of millions.

He compared Tesla to the fraud companies he''d exposed previously. Tesla kept going up anyway.

The difference between "fundamentally wrong" and "stock going up" is an expensive distinction to make.

Michael Burry

Michael Burry was born in San Jose, California in 1971. He lost his left eye to retinoblastoma as a child and has worn a prosthetic eye since.

He studied economics at UCLA and then went to Vanderbilt University School of Medicine. During his medical residency at Stanford, he posted detailed stock analysis on investor message boards between midnight and 3 AM.

The quality was consistently good enough that people in finance started paying attention.

He left his residency in 2000 — one year from finishing — to start Scion Capital with $1.1 million in loans from his family. No finance credentials.

Just a public track record and conviction. In his first full year, the S&P 500 fell 11.9%.

Scion returned 55%. From 2001 to 2008, Scion returned over 489% against the S&P 500's 3%.

Then he made the trade.

David Einhorn

David Einhorn grew up in Demarest, New Jersey, in a family of academics and professionals. He attended Cornell University, graduating summa cum laude with a degree in government.

After a brief stint at Donaldson, Lufkin & Jenrette, an investment bank, he started Greenlight Capital in 1996 at age 27 with $900,000 raised from family and friends.

The fund performed well from the start. Einhorn built a reputation for meticulous fundamental research — reading SEC filings obsessively, questioning management in earnings calls, and occasionally going public with short theses that embarrassed companies.

His 2002 short of Allied Capital, a business development company he argued was mismarking its loan book, started a years-long battle with the company and eventually the SEC. He wrote a book about it.

He was ultimately right.

Michael Burry

Scion Capital ran from 2000 to 2008. He closed it to outside investors after the Big Short trade — partly because managing money for clients who were screaming at him to reverse a position he knew was right was a genuinely miserable experience, and partly because he didn't need to anymore.

He relaunched as Scion Asset Management, a personal vehicle he still runs today. His current investing is more conventional — value picks, occasional activist positions, portfolio bets that get attention when his 13F filings come out.

He bought GameStop before Reddit did. He shorted Tesla.

He has positioned in water rights and farmland. He tends to be early, which is both his gift and his problem.

David Einhorn

Greenlight Capital is his hedge fund, managing approximately $1.5 billion today — down significantly from its peak of over $12 billion before a decade of underperformance. Greenlight runs a long/short equity strategy, meaning it simultaneously bets on stocks going up and stocks going down.

The short side is where Einhorn has built his public reputation.

He is also deeply involved in poker. He has finished in the money at the World Series of Poker multiple times, made the final table of the Main Event in 2012, and has won over $4 million in tournament poker.

He donated his 2006 World Series earnings to charity. He has said publicly that poker and investing require the same skills: reading information, managing uncertainty, and knowing when to fold.

Michael Burry

BA in Economics, UCLA. MD, Vanderbilt University School of Medicine, 1999.

He completed three years of his medical residency at Stanford before leaving to start Scion Capital. He is technically a licensed physician who never practiced.

David Einhorn

Cornell University, BA in Government, summa cum laude, 1991. He was a member of the Telluride Association, an honors society that placed particularly sharp students in a semi-independent living and learning program.

He has described his Cornell education as teaching him how to think, not what to think — which is, coincidentally, what good investing requires.