Who made the most money off The Big Short?
Summary.
Key Takeaways. Michael Burry is an investor who profited from the subprime mortgage crisis by shorting the 2007 mortgage bond market, making $100 million for himself and $700 million for his investors.
While this is an impressive sum, and Burry is widely credited with being the first to predict the collapse of the red-hot housing market, Steve Eisman, upon which the Big Short character Mark Baum (played by Steve Carell) was based, made a staggering $1 billion shorting collateralized debt obligations (CDOs), a type of ...
His unconventional investment strategy and steadfast confidence in his convictions have established his reputation as a savvy and non-traditional investor. Burry's current net worth is estimated to be somewhere near $300 million.
Eventually, Burry's analysis proved correct: He made a personal profit of $100 million and a profit for his remaining investors of more than $700 million. Scion Capital ultimately recorded returns of 489.34% (net of fees and expenses) between its November 1, 2000, inception and June 2008.
Advance Auto Parts, Inc.
(NYSE:AAP) is a key part of Michael Burry's 2024 portfolio as the investor bought a new stake in Advance Auto Parts, Inc. (NYSE:AAP) in the last quarter of 2023, worth $4.3 million. Out of the 933 hedge funds in Insider Monkey's database, 32 hedge funds had stakes in Advance Auto Parts, Inc.
The Scion Asset Management founder — whose prediction of the 2008 subprime mortgage crisis and shorting the housing market earned him a portrayal by Christian Bale in “The Big Short” — was an aggressively bearish voice during the months leading up to last April.
The deal was made in late April 2007 and several months later the bonds began to default and Paulson eventually made about $1 billion total from those investors' losses. In total Paulson reportedly earned $15 billion on $12.5 billion of investment in 2007—a return of over 100%.
In the mid-2000s, Burry was famous for placing a wager against the housing market and profited handsomely from the subprime lending crisis and the collapse of numerous major financial entities in 2008.
In 2005, Michael Burry's attention shifted to the subprime market, where he astutely identified irregularities that would ultimately trigger the 2008 financial crisis.
How much money did the characters in The Big Short make?
Michael Burry made $100 million by predicting the housing market crash in The Big Short. Mark Baum, based on Steve Eisman, earned $1 billion from the market crash depicted in the film. Jared Vennett, based on Greg Lippmann, made $47 million from swap sales as shown in the movie.
After drawing attention last year for holding bearish puts against the S&P 500, the Nasdaq-100 and a basket of semiconductor stocks, Burry apparently sold the last of these puts and instead added more long positions to his portfolio in the fourth quarter.
Michael Burry's Scion closed short positions on SOXX, a semiconductor ETF, while adding long positions in HCA, ORCL, BABA, and JD to its portfolio 4Q23.
In the film, hedge fund manager Mark Baum is devastated by a family tragedy in the middle of the impending financial crisis, which turns out to be the death of his brother by suicide. The real-life Steve Eisman did face a similar tragedy. However, it involved the death of his infant son, Max.
The movie takes creative liberties with some events and condensed conversations for storytelling purposes but still portrays the flawed and corrupt nature of the mortgage market.
Mark Baum is based on a real person who asked his name to be changed for the film, Steve Eisman. While at FrontPoint Partners LLC, which was a trust fund of Morgan Stanley, Eisman managed more than $1 billion.
Scion Asset Management, LLC is a fee-only firm headquartered in Saratoga, California. This firm does not manage money for individual clients – it provides advisory services to investment funds.
Transporting water is impractical for both political and physical reasons, so buying up water rights did not make a lot of sense to me… What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas.
| Stock | Company Name | % of Portfolio |
|---|---|---|
| JD | Jd.com Inc | 6.11% |
| HCA | Hca Healthcare Inc | 5.72% |
| ORCL | Oracle Corp | 5.57% |
| C | Citigroup Inc | 5.44% |
Several individuals who bet against or “shorted” the market became rich or richer. Percy Rockefeller, William Danforth, and Joseph P. Kennedy made millions shorting stocks at this time. They saw opportunity in what most saw as misfortune.
What stock did Michael Burry short?
Uncovering the Big SOXX Short
30, Michael Burry opened a massive, 100,000-contract put trade against semiconductor ETF SOXX for an undisclosed amount in his private equity fund, Scion Asset Management.
Michael Burry's investment approach
A margin of safety is a difference between a company's stock price and its intrinsic value. The idea is that if a company is worth more than its current stock price, then it's a safe investment because the price will eventually rise to match its value.
Subprime mortgage crisis
Sometimes referred to as the greatest trade in history, Paulson's firm made a fortune and he earned over $4 billion personally on this trade alone.
The protagonists in The Big Short made a lot of money by famously betting against the big banks before the financial crisis of 2008. Charlie and Jamie reasoned that either the company was a fraud, in which case the stock was probably worth zero, or the company was as honest as ...
