How Much Did Mark Baum Make

Hannah Arendt

2 min read

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16-12-2024

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Mark Baum, the character portrayed by Steve Carell in the Oscar-winning film The Big Short, is a fictionalized version of Dr. Michael Burry. While the film dramatizes the events, it leaves many wondering about the actual financial gains of the real-life investors who correctly predicted the 2008 subprime mortgage crisis. Determining precisely how much Mark Baum or Michael Burry made is difficult due to the complexities of the financial instruments involved and the lack of publicly available, detailed transaction records.

The Complexity of Calculating Profits

The film simplifies the intricacies of the investments made, focusing instead on the narrative of uncovering the impending crisis. Baum's (and Burry's) strategy involved betting against the housing market through complex financial derivatives known as credit default swaps (CDS). The profits weren't derived from a single, clear transaction but accumulated over time as the housing market declined.

Furthermore, any calculation of "profit" needs to account for:

• Initial investment: The amount originally invested to purchase the CDS contracts.
• Transaction costs: Fees and commissions associated with the complex financial transactions.
• Timing of sales: The specific point at which the CDS contracts were sold would significantly impact the final profit. Selling early might have yielded less than holding until the market hit its lowest point.

Michael Burry's Known Gains

While precise figures for Mark Baum's fictional earnings remain undisclosed, we can look to Michael Burry's actual returns as a reasonable proxy. Publicly available information suggests Burry's fund, Scion Capital, generated substantial profits from its bets against the subprime mortgage market. Reports indicate his fund's return was in excess of 489%, though the exact figures are not universally confirmed. This means that for every dollar invested, Scion Capital earned approximately $4.89.

However, this impressive return doesn't translate directly into Burry's personal wealth. The fund's profits were distributed to its investors, including Burry himself. The precise percentage of the profits he personally received remains private information.

Beyond the Numbers: The Bigger Picture

The story of Mark Baum/Michael Burry isn't solely about the financial gains. The film emphasizes the ethical implications of their actions, highlighting the contrast between immense personal profit and the devastating consequences faced by millions due to the subprime mortgage crisis. The substantial financial rewards generated through accurate prediction serve as a stark reminder of the risks and potential rewards inherent within high-stakes financial markets, as well as the complexity of fully understanding such gains.