Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Quantitative Analysis

Michael Burry, does he still have the magic in him? I don't know about that. But at least in Korea, he always seems to be drawing a lot of public attention for what he trades. Yesterday again, the article about his recent trades was the most read news article on Naver Finance.On March 18, Burry made the first regulatory filing about his recent 5+% stake purchase in the two stocks: <a href="https://www.smartkarma.com/entities/vitzrocell-co-ltd" target="_blank" data-smartkarma-citation="entities:4885:1" rel="noopener">Vitzrocell (082920 KS)</a> and <a href="https://www.smartkarma.com/entities/chosun-steel-wire-co-ltd" target="_blank" data-smartkarma-citation="entities:9280:1" rel="noopener">Chosun Steel Wire (120030 KS)</a>. He now has 5.14% in Vitzrocell and 5.32% in Chosun SW. Last month on April 26, he submitted a regulatory filing saying that his shareholding in <a href="https://www.smartkarma.com/entities/ezwelfare-co-ltd" target="_blank" data-smartkarma-citation="entities:19045:1" rel="noopener">Ezwelfare (090850 KS)</a> rose from 5.64% to 7.16%.Any common link between these three names? First, they are small-caps. The largest one is Vitzrocell, which has a market cap of a little more than ₩300bil. The other two are measly ₩100bil stocks. Any particular sector? Well, I don't find any commonality. Then, style? Umm, there is one thing in common between the three. All of them are extremely low in debt. It seems that Burry is sticking to the most fundamental principle that low-debt companies thrive in a market downturn.<figure class="editor-figure mceNonEditable"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/126/059/original/1.png?1585786407" class="editor-image img-responsive" data-smartkarma-image-id="126059"></figure><img src="https://static-prod.smartkarma.com/images/media/000/126/058/original/2.png?1585786325" class="editor-image img-responsive" data-smartkarma-image-id="126058"></figure>

Michael Burry, does he still have the magic in him? I don't know about that. But at least in Korea, he always seems to be drawing a lot of public attention for what he trades. Yesterday again, the article about his recent trades was the most read news article on Naver Finance.On March 18, Burry made the first regulatory filing about his recent 5+% stake purchase in the two stocks: Vitzrocell (082920 KS) and Chosun Steel Wire (120030 KS). He now has 5.14% in Vitzrocell and 5.32% in Chosun SW. Last month on April 26, he submitted a regulatory filing saying that his shareholding in Ezwelfare (090850 KS) rose from 5.64% to 7.16%.Any common link between these three names? First, they are small-caps. The largest one is Vitzrocell, which has a market cap of a little more than ₩300bil. The other two are measly ₩100bil stocks. Any particular sector? Well, I don't find any commonality. Then, style? Umm, there is one thing in common between the three. All of them are extremely low in debt. It seems that Burry is sticking to the most fundamental principle that low-debt companies thrive in a market downturn.

Trade like Michael Burry on Korean Small-Caps? Here Are Candidate Names

South Korea

Chosun Steel Wire Co., Ltd. manufactures and markets welding rods for the shipbuilding, automobile, and iron construction industries.  The Company also produces steel wires, galvanized wires, and other construction materials.

Trade like Michael Burry on Korean Small-Caps? Here Are Candidate Names

Michael Burry, does he still have the magic in him? I don't know about that. But at least in Korea, he always seems to be drawing a lot of public...

Sanghyun Park