On reading The Big Short by Michael Lewis

• How to be a stock market genius - Goldblatt (1997), a value investor, read by Burry and Cornwall Capital
• Burry outperformed market through sheer hard work - reading all publicly available documents for companies
• Ick investing is the concept of looking for investments that often have had bad news associated with it, leading to poor public expectation of the stock and thus is made cheap.
• Burry found the subprime mortgage bond crisis through being curious about the discrepancy between the salaries of people in San Jose (which should have been impacted by the burst of the Internet Bubble) and the cost of houses
• Cornwall Capital also did the same but gathered information from on-the-ground sources, such as industry conferences, sought out people who knew key management.
• Steve Eisman found the big short through thoroughly understanding what he was allocated to study - mortgage bonds - but also questioning data that did not make sense
• In essence the heroes of The Big Short capitalised on information asymmetry generated groupthink, complexity of financial instruments and thus the misplaced trust of investors in the entire system to price risk accordingly.
• People working for government and regulatory bodies may, if the situation is too complex, not understand the full picture
• Statistics lie - the devil is in the details, and in finance be wary of statistics as Wall Street is often a zero sum game and no-one is working in your best interest
• In today's world of specialisation, the macro view is often lost as most people only look at what they know