After shorting subprime, hedge fund is moving on

Discussion in 'Wall St. News' started by ASusilovic, Oct 26, 2007.

  1. One of the hedge funds that made a killing by short-selling the subprime-mortgage universe has decided to look elsewhere for its next opportunity.
    Michael Burry, head of the $621 million Scion Capital LLC, has informed investors that he's unwinding a massive bet against subprime mortgages after generating a more than four-fold return.
    "The opportunity in 2005 and 2006 to short subprime mortgages was an historic one," Burry wrote in a letter to investors. "With continued hard work and a bit of luck, we will latch onto another opportunity like the subprime short. But I am not counting on it happening anytime soon."

    At the beginning of this year, Silicon Valley-based Scion Capital held $1.7 billion worth of short positions on parts of subprime mortgage securities. A short position increases in value as the security in question falls.
    But by mid-October, those short positions had been whittled down to $479 million, according to a letter that Burry sent to investors this month. A spokesman for the firm declined to comment on the letter, which was obtained by MarketWatch.{C0948F1E-F0BB-4553-BFFD-EBD78052209A}

    Cool !:cool:
  2. His Halloween and Christmas parties should be nice.