nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Michael Burry – Betting on the blind side

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This article was actually included as part of our Business Strategy readings, but if you (like me) generally neglect these readings, you may have missed it. The article tells the story of Michael Burry, a medical doctor and hedge fund manger who was among the first people, perhaps even the first, to spot the systematic flaws which resulted in the 2008 subprime crisis. Burry profited hugely from this by purchasing credit default swaps on specifically targeted tranches of certain CDOs – he however first had to convince large investment banks to create these products and sell them to him. It’s a long read but well worth it.

http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-201004

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