The Blogger Who Made His Readers Wealthy

by Russ Hill on April 25, 2011

Michael Burry Blog

He was only 27 years old.

Healthcare was his chosen profession.

His day job was at Stanford Hospital where he was doing his residency in neurology.

At night he spent hours online. Reading everything he could find. About finance. Or more specifically, investing.

After a while he decided to contribute to the conversation. He began by posting a few comments on investment message boards. Eventually, he decided he wanted to say more so he created a blog.

Those were the early days of social media.

The year was 1999. It was the year the word blog was born.

A few of you know Michael Burry’s story. Most of you do not.

One of the amazing things about the internet is the voice it gives to any and all individuals who seek the opportunity to say something.

WHAT MICHAEL BURRY DISCOVERED

Michael Burry had something to say. And, he used his keyboard late at night to say it.

Most people never heard him.

His blog was virtually invisible to all except perhaps a few dozen people.

But, that handful of readers discovered they had found something remarkable.

Michael Burry BloggerYou see, Michael Burry, used his website to broadcast dire warnings about something he had uncovered in the investment world. This socially awkward man with a fake eye had been reading hundreds of financial documents and discovered something terribly wrong in the housing market. Or, more specifically in the funding of subprime mortgage loans.

Everything he found he shared. On his blog.

Burry became so convinced that the subprime mortgage industry was going to collapse that he talked Goldman Sachs into allowing him to bet against the market in something he developed called credit default swaps.

A few of Burry’s readers emailed him. They asked if he would invest their money in these so-called swaps for them.

These few people had a lot of money. Enough to convince Burry to trade his scrubs and lab coat for a keyboard and calculator. He decided to open a small brokerage firm.

BURRY’S READERS MADE MILLIONS

This long and captivating story made short and simple is that Burry was right.

And, those who found his blog and put their money in his hands hit paydirt.

When the housing market collapsed and the subprime mortgage industry went bust Michael Burry made a ton of money. $100 million to be exact.

His blog readers collectively banked more than $725 million.

Michael Burry’s story has become folklore in investment circles. Many have read Michael Lewis’ amazing book that made Burry a celebrity among those who study spreadsheets.

But Burry has never gotten his due in the blogging world.

His name is unknown to those whose careers revolve around posting to pages like this one.

BURRY’S CHANGED THE MEDIA

Techies and Twits are unaware of Burry’s contribution to the changing of the guard from old to new media, analog to digital, and broadcasting to narrowcasting.

Those who were watching CNBC or reading the Wall Street Journal in 2007 and 2008 were doubling down on subprime mortgages. Those reading Michael Burry’s blog were not.

I’m confident Burry wondered whether he was wasting his time writing blog posts in the middle of the night.  He was a nobody.  With no readers.  Or, so he thought until some of the Titans of Wall Street emailed him and revealed they were not only reading his posts, but wanted to give him their money.

Years from now when we write the history of the current media revolution let’s make sure we don’t forget to include the story of Michael Burry.

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