The Big Short_ Inside the Doomsday Machine - Michael Lewis [93]
And Greenblatt had a point. It was wildly unconventional to side-pocket an investment for which there was obviously a market. There was clearly some low price at which Michael Burry might bail out of his bet against the subprime mortgage bond market. To some meaningful number of his investors, it looked as if Burry simply did not want to accept the judgment of the marketplace: He'd made a bad bet and was failing to accept his loss. But to Burry, the judgment of the marketplace was fraudulent, and Joel Greenblatt didn't know what he was talking about. "It became clear to me that they still didn't understand the [credit default swap] positions," he said.
He was acutely aware that a great many of the people who had given him their money now despised him. The awareness caused him to (a) withdraw into his office and shout "Fuck" at the top of his lungs even more than usual; (b) develop a new contempt for his own investors; and (c) keep trying to explain his actions to them, even though they quite clearly were no longer listening. "I would prefer that you talk less and listen more," his lawyer, Steve Druskin, wrote to him, in late October 2006. "They are strategizing litigation."
"It was kind of interesting," said Kip Oberting, who had arranged for White Mountains to become Burry's other original investor, before leaving for other ventures. "Because he had explained exactly what he was doing. And he had made people a bunch of money. You would have thought people would stick with him." They weren't merely not sticking with him but fleeing as fast as he would allow them. They hated him. "I just don't understand why people just don't see that I don't mean any harm," he said. Late on the night of December 29, Michael Burry sat alone in his office and typed a quick e-mail to his wife: "So incredibly depressing; I'm trying to come home, but I'm just so mad and depressed right now."
And so in January 2007, just before Steve Eisman and Charlie Ledley headed gleefully to Las Vegas, Michael Burry sat down to explain to his investors how, in a year when the S&P had risen by more than 10 percent, he had lost 18.4 percent. A person who had had money with him from the beginning would have enjoyed gains of 186 percent over those six years, compared to 10.13 percent for the S&P 500 Index, but Burry's long-term success was no longer relevant. He was now being judged monthly. "The year just completed was one in which I underperformed nearly all my peers and friends by, variably, thirty or forty percentage points," he wrote. "A money manager does not go from being a near nobody to being nearly universally applauded to being nearly universally vilified without some effect." The effect, he went on to demonstrate, was to make him ever more certain that the entire financial world was wrong and he was right. "I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind."
Then he returned, as he always did, to the not so small matter of his credit default swaps: All the important facts pointed to their eventual success. In just the last two months, three big mortgage originators had failed...The Center for Responsible Lending was now predicting that, in 2007, 2.2 million borrowers would lose their homes, and one in five subprime mortgages issued in 2005 and 2006 would