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The World of 'Ick' Investing - Views on News from Equitymaster
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The World of 'Ick' Investing
Mar 6, 2017

Have you seen the movie 'The Big Short'?

Apart from being a fun movie, it is full of investing lessons.

The movie is about the US subprime crisis of 2007-08, the buildup to it, and the story of a very small handful of people who made tons of money calling the mortgage market's bluff.

And of course, about the rest of the financial world that snickered behind their backs while the bubble still lasted. And then lost their shirts thereafter.

Among others, it features the story of a physician turned hedge fund manager - Michael Burry. He's said to be one of the first to recognize the outrageous stupidity going on in the mortgage securities' market at the time. The Emperor was indeed naked, and Burry called it out.

But Burry didn't stop there. He bet against the market, and bet big. When pin finally met the bubble, he made buckets of money.

While that may be one of his most fabled investment bets, that certainly isn't his only. He is credited with earning some fabulous returns for his investors over a long period of years.

As for his investing style, Burry is a value investors and a self-confessed Ben Graham aficionado. He takes a lot of his inspiration from Graham's book Security Analysis.

You may find one concept from Burry's way of investing quite interesting indeed. He calls it 'Ick investing'. Here's Burry himself:

  • Ick investing means taking a special analytical interest in stocks that inspire a first reaction of 'ick.' I tend to become interested in stocks that by their very names or circumstances inspire unwillingness - and an 'ick' accompanied by a wrinkle of the nose on the part of most investors to delve any further.
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