Mohnish Pabrai: The Time I Met Michael Burry

During this interview with the mint-Equitymaster Investor Hour, Mohnish Pabrai discusses the time he met Michael Burry. Here’s an excerpt from the interview:

Pabrai: So in 2008 I’m making a trip to San Jose, California. Michael Burry’s fund and Michael Burry is based in San Jose, California.

And I don’t know him, but I know of him. So I contact him and say hey Michael you don’t know me but I’m a fund manager and I’m going to be in San Jose, and do you want to grab coffee.

He says yeah, just come by my office.

So this is like October of 2008 and I go to Michael Burry’s office. And you’ve seen the guy playing the drums. I go to Michael Burry’s office and he’s got these huge stacks of paper.

And he doesn’t even say hello, welcome, or any of that, he launches straight into CD assets.

He says do you know what a credit default swap is?

I said no, I have no idea, and I’m not even looking to know what it is. I’m not really interested.

Then he goes into this huge detailed drill down with me on CDS’ and CDS squared and you know the tranches and how to short it, and how real estate it’s going to blow up, and everything’s gonna blow up, and the whole Western world is going to blow up. And this is the way you play it.

So now all God could do is he could take the horse to the water. He took the horse to the epicenter of the best lake.

The horse was too dumb to drink.

So the horse was taken to the water but the horse did not drink.

So I came out of Burry’s office saying okay that was weird, what the hell, we’re gonna kind of move on and of course then exactly what he was saying proceeds to happen.

So it was a very interesting experience.

You can watch the entire discussion here: