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Category: Reflexion

Michael Burry, a manager as atypical as he is brilliant.

Our friend Marc Garrigasait, manager of Koala Capital SICAV y Panda Agriculture & Water Fund FI,has posted on his blog Investors Conundrum what is probably the most complete compendium of data and reflections compiled by Dr. Michael J. Burry, famous for his more than brilliant investments against the US mortgage market at the height of the bubble a decade ago. Many will remember him as the main character in the film «The Big Short», an essential film for both professionals and financial neophytes.

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In his article, Garrigasait comments on very interesting aspects of the character, such as his origins far removed from the financial sector and the overwhelming world of Wall Street, since he abandoned his profession as a neurologist in California to devote himself to managing his own and other people's money. His deeply - not stubbornly - contrarian profile and his conviction that it is not only perfectly possible for the rest of the world to be wrong, but also very likely, make Dr Burry an exceptional manager in every sense of the word. As you will see in the next paragraph, his passion for being right in the long run, against the stupid market consensus, outweighs his eagerness to make money: I might even make an error. Hey, I admit it. But I don't let it kill my returns. I'm just not that stubborn. In the end, investing is neither science nor art - it is a scientific art. Over time, the road of empiric discovery toward interesting stock ideas will lead to rewards and profits that go beyond mere money-”.”

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Among the notes and commentary in this compendium of Burry's thoughts, you will find reviews of real estate, technology and all types of stocks. Complex conclusions covering company analysis and market valuations. He talks about macroeconomic analysis, market timing, investor behaviour, mistakes, fundamentals and a very long etc. Always with his vehement vision and founded on the basis of value investing and the margin of safety. In short, a privileged mind that has permanently drunk from Graham's fountain, but who is also capable of recognising that value investing is not infallible, and that it only reduces the probabilities of failure in the jungle of the markets.

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Here you have the complete document in pdf to learn from an exceptional master. It is not to be missed: Learning from Dr. Michael J. Burry's Investment philosophy 2016 10 18

 

Democracy Changed the World: More America and less Europe.

In just a few months the world, or at least the Western world, has turned 180 degrees. And it has not been caused by any particular war or cataclysm, but rather by the result of two votes. That is the way it is, whether we like the decisions taken or not, Democracy has changed the world. Indeed, who else would be best placed to change the course of the world's most influential countries? Both votes have set the stage for what will be a turnaround as dizzying as it is unmistakable: More America and less Europe.

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The first vote was held on 23 June, in which 17,410,742 The British decided to leave the EU, thus breaking all the schemes that up to that moment the Eurobureaucrats still defended tooth and nail, i.e. the Troika and the single currency. Even though it proved to be economically and politically unviable, the slogan of the European leaders was, until that very moment, more Europe, more Union and less sovereignty for the member states. Let's say that Brexit - against the realisation of which the defenders of an impossible EU are still fighting - opened the eyes of many leaders and also the ban on officially saying and planning such things as these o these, without being branded as pariahs or losing their positions. Because regardless of the timing and the traumas of Brexit, the break-up of the EU into at least two sub-unions of states is not only an officially recognised prospect, it is the only viable one. You can read more in «Europe's USA is taking shape«.

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The second vote took place across the pond the day before yesterday. The reality of the ballot box was, once again, stubborn. Y 59,692,974 of people have voted for Donald Trump despite fierce opposition from virtually the rest of the world. The president-elect is still a melon to be opened, as his racism, homophobia, sexism and other Hitlerian leanings during the campaign may well be moderated to mere vehemence and political heterodoxy during his term in office. The reason is simple: from the very moment he was elected he no longer needs to ask for anyone's vote. And this will lead him to show the real Trump president, which time will tell if he is worse or better than the Trump candidate shown in the campaign. His uncertain policies have even Republicans themselves on edge. And his personal relationships with other presidents such as Enrique Peña, Merkel, May, Putin or Xi Jinping have the whole world on edge. But his nationalist, protectionist and authoritarian idiosyncrasies go in the unmistakable direction of the «More America» or «Make America Great Again» concept. And that is a radical departure from the openness/modernism/globalism of the Obama era.

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Notice that in both the Brexit referendum and Trump's presidential election the result of the ballot box was against the odds. Curious, isn't it? Perhaps it is not that the polls are so shoddy or that the respondents are lying, but that they are pre-cooked by the establishment: Politicians and Euro-bureaucrats here; and politicians and Democrats (and even part of the Republicans) there. Faced with the risk of groundbreaking results that would annihilate the current (bad, yes, but familiar) course of the developed world, the mobilisation of the media to prevent Trump and Brexit has been enormous. It is clear that this establishment intended at all costs generating opinion among the population and not generate information for the population. But they have failed. And today the world is different on both sides of the Atlantic.

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A priori, a more inward-looking USA and a more Europe split in two, The two sides do not have to be loser scenarios, nor do they have to be winners. In any case, one winner is indisputable: Democracy. Only time will tell whether those 17 million Britons and 59 million Americans will have led us to a better or worse world. Because their sovereign decision will affect us all, and very much so. That's the thing about influential economies in a globalised world.

Winter is coming...

This is the famous recurring phrase that most of us have heard throughout all the seasons of the hit series «Game of Thrones».

It is always pronounced as a reminder of the hard times the protagonists are going to face, but also as an irrefutable argument for taking measures, which are no less drastic than necessary, in the face of the darkness, severe cold and shortages that are already looming.

Well, we would say that winter is also coming for the financial system.

All that is missing is a catalyst to unleash the tremendous consequences of the distortions to which central banks have subjected their balance sheets and markets. (more…)

The United States of Europe is taking shape...

As we have already advanced in «The secret Franco-German Superstate project« and in «The two-speed EU is here«In fact, more and more voices are speaking openly about Europe's hard core project. Moreover, these voices are not merely rumours in the press from dubious sources, but are as significant as the foreign ministers of France and Germany, or the elected representative by the European Parliament to deal with Brexit issues - former Belgian Prime Minister Guy Verhofstadt himself.

As it says in this article, This month, Verhofstadt defined the 6 points on which the new European superstate should be based. The timing for starting work in this direction has been set at just 6 months, far short of the multi-year period that some have talked about.. And the timing of Brexit, whether it is more or less agile, will hasten the path towards the creation of a true United States of Europe, where a hard core of countries will converge, ceding almost all their sovereignty on issues such as the army, a joint FBI, a government with only one president and a dozen ministers, etc. (more…)

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