Deep Value Net-Net Working Capital & Liquidation Discounts

Long before achieving global fame for shorting subprime mortgages, Michael Burry built his elite track record as a classic Benjamin Graham “net-net” deep value investor. Equity screening architectures within the Michael Burry Scion 13F portfolio tracker evaluate the mechanics of buying equities trading below their net current asset value (NCAV).

A classic net-net is defined as a company whose market capitalization trades at a substantial discount (often 33% or more) to its current assets minus all total liabilities (both short-term and long-term), assigning zero value to property, plant, equipment, or intangible assets.

To avoid lethal value traps where chronic operating losses erode corporate cash before catalysts materialize, Burry meticulously screens for low cash burn rates, positive operating cash flow, and aggressive management share repurchases, unlocking asymmetric upside when market pricing converges to liquidation value.