Michael Burry's 2008 1st Quarter Letter

Thanks to Dang for reminding me about these letters being online, which prompted me to go back and read this one, which is full of great insights.

Earlier this month, I took my family on our first extended vacation far away from California, and we ran headlong into a flock of black swans. Real, breathing black swans. You’ve got to be kidding me. One cannot make this stuff up. Or so I thought.

But, of course, this was indeed predictable. We were visiting Leeds Castle in Kent, England, and if I had done the work, I would have known about the flock of black swans that reside at this castle. And that is about how I view Mr. Taleb’s premise of the Black Swan. I have found markets to be anything but random, and I find many of the future events that are bound to be dismissed as random or explainable only in hindsight in fact can be foretold in time with the rhythm of history. If one does the work.

My father, a mechanical engineer, used to dismiss random chance. The harder you work, the luckier you get, he’d say. I am convinced there is hardly a better rule by which to live.