Burry was the guru behind Scion Capital. He was a great stock picker and later made $100 million buying credit default swaps, investing against the housing bubble.

I am not going to recount the article. Read it if you are interested in what great investors do. It is a great read. I am just going to share with you the what I take away from the article.

1) Do not Follow. That means Warren Buffett, Seth Klarman or Mike Burry. You must come up with your own investment stategy. It has to work for you , if you want to be successful. Understand the principles of Ben Graham, but don’t be a slave to his ideas. “To succeed in a spectacular fashion you had to be spectacularly unusual.”

2) Use your differences to your advantage. Burry felt he was different because he only had one eye (although it turned out not to be his real difference). That is a good metaphor for most investors. We are all a little different. Understanding our differences and utilizing it to our investing advantage is imperative. I know this sounds a little self-helpy, but what the hell.

3) Bargains are found in the discard bin not on display at Tiffany’s. To be a value investor you must keep looking when others give up, or don’t understand something. Use your understanding of an industry, or circle of competence to your advantage. Burry referred to the “ick” factor. That is he ended up buying stocks of companies, where his initial reaction was “Ick.” But subsequent research revealed a value opportunity.

4) Never stop expanding your circle of competence. Burry taught himself investing. He taught himself about bonds, then the securities that were packages of subprime loans. He went where others simply did not tread, either because it was two difficult to understand, or assumed that since all the smart people were creating these issues, that betting against them was not a good idea.

5) don’t be afraid to short. I am of course not referring to actual shorting of a stock. Too much risk. But Burry found a way in Credit Default Swaps (CDS) to invest against the mortgage bonds.

6) just because someone tells you an investing idea is bad, even if they can articulate why, doesn’t mean you shouldn’t invest in it. Some investors like Monash Pabrai like to attach probabilities to an investment. If the probability of success is high, make a larger investment proportionally. I won’t call it probability, because I don’t believe anyone can accurate assess the probability of success in the investing world. There are simply too many unknowns. But that does not mean we cannot assess whether or not our investment thesis is stronger than another investment idea.

7) Don’t get emotional about your investments. I have stated this before on this blog. But it is always worth remembering and I am reminded of it from Parker’s comment.

If you read the Vanity Fair article, please let me know if you culled something interesting that I missed, particularly if it was really obvious.

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