Dan Loeb at SALT Conference on Japan, Yum Brands, China & More ~ market folly

Thursday, May 7, 2015

Dan Loeb at SALT Conference on Japan, Yum Brands, China & More

Skybridge's Alternatives Conference, otherwise known as SALT, is underway in Las Vegas.  Dan Loeb of Third Point spoke last night with Anthony Scaramucci and here's a summary of his comments.

Dan Loeb's Comments at SALT Conference

- Loeb seems constructive on Japan, says the Abe administration was very encouraging when they were involved with Sony (SNE) pushing for change.  Says Third Point probably exited that name "too soon" and probably left $1 billion on the table there as Japanese businesses are starting to focus on changing their ways.  They're more receptive to activism/suggestions and starting to focus more on shareholder return.  Thinks there will probably be more activist opportunities in the country but "they will become their own activists".

- Yum Brands (YUM) isn't really an activist play for them, it's an emerging markets opportunity.  They saw a play and as the food safety issues are taken care of, there's "enormous" upside.  There's basically 3 pillars to his investment here: turnaround potential (undervalued), franchising, and possible China spin-off.  You can read Third Point's thesis on YUM in their Q1 letter.

- Activism can help power the 'powerless' by helping other shareholders.

- On China (paraphrase): I don't know anyone who's gotten rich betting against China.

- Loeb thinks markets will more likely than not be higher over the next 1-3 years from now.  2 rules: Don't fight the Fed and don't fight the 'godfather' (David Tepper).

- On Warren Buffett: "I love reading Warren Buffett's letters.  I love contrasting his words with his actions ... I love his wisdom.  He's a very wise guy.  But I also love how he criticizes hedge funds, yet he really had the first hedge fund.  He criticizes activists, yet he was the first activist."

- Also talked about how the lack of educational opportunities here in America is a big issue.

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