What We're Reading ~ Hedge Fund Links 4/26/13

David Tepper builds stake in Energy Holdings debt [ValueWalk]

Mark Anson's formula for choosing a good hedge fund for your portfolio [CFA]

How hedge funds need to adapt [All About Alpha]

The mind of DoubleLine's Jeffrey Gundlach [Crossing Wall Street]

George Soros' European solution to the Eurozone's problem [George Soros]

JANA Partners says Rockwood worth $80 in possible takeover [Bloomberg]

ValueAct takes $2 billion Microsoft (MSFT) stake [Yahoo News]

John Paulson says he's staying the course on gold [Hedgeworld]

Rob Arnott: most hedge funds disappoint [Term Sheet]

Hedge fund managers mixed on 2013 outlook [HedgeCo]

Billionaire Carl Icahn's tale of aggression [Forbes India]

Hedge fund gold wagers defy worst slump in 33 years [Bloomberg]

Hedge funds plowed into gold as market looked vulnerable [Hedgeworld]

Devitt sees consolidation in outlook for fund of funds [Investment Europe]

Hedge funds find new Swiss rules good for business [Reuters]

Singapore will replace Switzerland as wealth capital [CNBC]

Nelson Peltz's Trian Fund Decreases Family Dollar Stake

Nelson Peltz's investment firm Trian Fund Management today filed an amended 13D with the SEC regarding shares of Family Dollar (FDO).  Per the filing, Trian has disclosed a 7.35% ownership stake in FDO with 8,444,597 shares.

This means that Trian has reduced the number of FDO shares they own by around 6%.  In total, they sold 524,260 shares at a price of $63.5090.  The 13G filing was reported portfolio activity on April 25th.

Per Google Finance, Family Dollar "operates a chain of more than 7,000 general merchandise retail discount stores in 44 states, providing primarily consumers with a selection of merchandise in neighborhood stores. The Company merchandise assortment includes Consumables, Home Products, Apparel and Accessories, and Seasonal and Electronics. A Family Dollar store is between 7,500 and 9,500 square feet, with an average of approximately 7,100 square feet of selling space."

In other recent activity from this firm, we recently highlighted Trian's new stakes in Mondelez and PepsiCo.

Senator Investment Group Discloses Taminco Position

Alexander Klabin and Doug Silverman's hedge fund Senator Investment Group filed a 13G with the SEC regarding shares of Taminco (TAM).  Per the filing, Senator has revealed an 8.82% ownership stake in Taminco with 5,750,000 shares.

The filing was required due to portfolio activity on April 18th as the company went public.  According to IPO materials, Taminco is the "world’s largest pure play producer of alkylamines and alkylamine derivatives."

In other recent portfolio activity from the hedge fund, we posted about how Senator added to its International Paper stake.

Soros Fund Starts J.C. Penney Stake

George Soros' family office Soros Fund Management filed a 13G with the SEC late yesterday afternoon regarding shares of J.C. Penney (JCP).  Per the filing, Soros Fund has revealed a 7.9% stake in JCP with almost 17.4 million shares.

This is a brand new position for the family office as they did not disclose a stake at the end of 2012 in their most recent 13F filing.  The 13G just filed was required due to portfolio activity on April 15th.

CEO Ron Johnson was recently fired from JCP and shares have risen since then.  He was originally recommended by Pershing Square's Bill Ackman and the company will now turn to new management.

We've highlighted how Bill Ackman has a large stake in J.C. Penney and have posted up Ackman's presentation on JCP before.  There's also one coincidence here: both Pershing Square and Soros Fund share the same New York office building address.  Perhaps Ackman recently gave an elevator pitch?

Shares of JCP have fallen from $35 down to around $16 over the past year as they have struggled amidst a turnaround plan involving the company's stores.

Per Google Finance, J.C. Penney is "a retailer, operating 1,102 department stores in 49 states and Puerto Rico as of January 28, 2012. Its business consists of selling merchandise and services to consumers through its department stores and through its Internet Website at jcp.com. It sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside jcpenney and home furnishings."

Jim Chanos on His Tech Longs/Shorts, China & the Art of Short Selling: CNBC Interview

Kynikos Associates founder Jim Chanos was on CNBC today talking his short positions, China, and even some of his longs.  Here's the key takeaways from his talk:


Chanos' Technology Longs & Shorts

One of the main takeaways here is that he's long leading players in the mobile smartphone/tablet arena: Apple (AAPL) and Samsung (KRX:005930).  At the same time, he's short the slowly dying PC makers like Dell (DELL) and Hewlett Packard (HPQ).  While the trade hasn't been working well as of late, he still thinks the fundamentals will win out over time.  He thinks printers, ink and PCS all face secular declines.


On China

A few days ago, we posted up Jim Chanos' presentation on China from the Wine Country Conference.  On CNBC today, he talked about why he feels China's economic situation has actually gotten worse.  He points to the rapid credit expansion over there and sees a potential bubble. He likes to be short companies related to real estate and construction in China and also pointed out steelmakers and iron ore players.  Greenlight Capital's David Einhorn has also said to short iron ore.


On What He Looks For in Shorts

The Kynikos manager says that "timing is not my forte" and the ever-rising markets of today can be difficult for a short-seller.  He says, "It's problematic because it's more frustrating, but on the other hand you're given more opportunities."  He feels that ultimately, the fundamentals will win out because these rallies have also propped up the 'leaky boats'.  He also somewhat joked that they like to look at companies that put their names on sports team arenas.

Chanos looks for an edge in something that everyone's not focused on.  Two simple indicators he likes: wholesale executive departures and large amounts of insider selling from multiple individuals.  He says, "Those two indicators together are about as big of red flag as you can get."


Embedded below are the videos of Chanos' interview on CNBC:

Video 1 on China

Video 2 on tech stocks

Video 3 on natural gas and coal

Video 4 on what he looks for in short selling


For more from this hedge fund manager, head to Chanos' recent China presentation.

What We're Reading ~ Analytical Links 4/24/13

12 rules of goldbuggery [The Big Picture]

On Africa's economic prospects [The Economist]

Nate Silver: confidence kills predictions [IndexUniverse]

Leverage: financial versus operating [MicroFundy]

The endgame is forced liquidation [Hussman Funds]

P/C insurance industry overview and outlook [Insurance Information Institute]

Twitter is becoming the first and quickest source of investment news [Guardian]

Shameless plug: if you don't already, follow @MarketFolly on Twitter

An economic analysis of cable TV pricing [Colorado.edu]

Paying for sports programming [The Sports Economist]

Here comes Amazon's (AMZN) Kindle TV set-top box [BusinessWeek]

eBay (EBAY) fighting online sales tax [Dealbook]

Public speaking: how to shine on the soapbox [Anthony Scaramucci]

A quant finance reading list [Quantstart]

For aspiring investment managers: Kaplan's Series65 exam prep .pdf [Kaplan]

Bitcoin investors hang on for the ride [WSJ]

Lone Pine Capital Ramps Up Workday Stake

Steve Mandel's hedge fund firm Lone Pine Capital on Monday filed a 13G with the SEC regarding shares of Workday (WDAY).  Per the filing, Lone Pine has disclosed a 9.35% ownership stake in WDAY with 3,522,285 shares.

This marks a 259% increase in the hedge fund's position size since the end of the fourth quarter when they owned just over 980,000 shares.  The 13G was required due to portfolio activity on April 10th.

In other activity from the hedge fund, last week we pointed out that Lone Pine boosted its Lululemon stake.

About Workday

Per Google Finance, Workday is "a provider of enterprise cloud-based applications for human capital management (HCM), payroll, financial management, time tracking, procurement and employee expense management. It is focused on the consumer Internet experience and cloud delivery model. Its applications are designed for global enterprises to manage complex and dynamic operating environments. The Company provides its customers the applications to manage critical business functions for their financial and human capital resources."

Other Hedge Funds Involved

Workday went public in October of 2012 and numerous hedge funds participated in its initial public offering.  At the end of 2012, some of the largest holders of WDAY shares included the likes of Blue Ridge Capital, Lone Pine Capital, Tiger Global, and Dorsal Capital.  The largest disclosed owner seems to be venture capital firm Greylock Partners.


Steve Mandel was recently named one of the top 10 highest paid hedge fund managers of 2012.  You can see additional portfolio activity from Lone Pine here.

Scout Capital Discloses New Position in Post Holdings

Adam Weiss and James Crichton's hedge fund firm Scout Capital this week filed a 13G with the SEC regarding shares of Post Holdings (POST).  Per the filing, Scout has revealed a 6.94% ownership stake in the company with 2,266,972 shares.

This is a brand new position for the fund as they did not disclose owning any shares in their last 13F filed with the SEC which detailed positions at the end of the fourth quarter.   Their new disclosure was required due to portfolio activity on April 11th.

Post Holdings was created as a result of a spin-off from Ralcorp Holdings (RAH), which took place at the beginning of 2012 and shares have rallied furiously since then, almost doubling from $24 to current prices just shy of $44.


Other Funds Involved in POST

Parsing through 13F filings from Q4, we see that while a large portion of POST's top holders are 'vanilla' institutional plays, a few hedge funds held Post Holdings at the end of 2012: Paulson & Co and Highfields Capital.  New 13F filings are due out in the middle of May and we'll be able to see who else might have scooped up shares of POST in Q1. 


About Scout Capital

Scout was founded and is co-managed by James Crichton and Adam Weiss. Before founding Scout, Crichton worked at Zweig-DiMenna and received his MBA from Harvard. Weiss, on the other hand, worked at Dan Loeb's Third Point and received his MBA from Columbia. 


About Post Holdings

Per Google Finance, Post Holdings is "a manufacturer, marketer and distributor of branded ready-to-eat cereals in the United States and Canada. The Company’s portfolio of brands includes Honey Bunches of Oats, Pebbles, Great Grains, Grape-Nuts, Shredded Wheat, Raisin Bran, Golden Crisp, Alpha-Bits and Honeycomb. It markets and sells ready-to-eat cereal products in three different categories: sweetened, balanced and unsweetened. Its sweetened products include Pebbles, Honeycomb, Golden Crisp, Alpha-Bits and Waffle Crisp. Its balanced products include Honey Bunches of Oats, Post Selects, Great Grains and Shreddies. The Company’s unsweetened products include Post Shredded Wheat, Post Raisin Bran and Grape-Nuts."

For more on this hedge fund, we've highlighted some of their thoughts on their other positions.

Connect with Family Offices at Events in New York & Los Angeles

The Family Offices Group would like to invite you to attend one of their two family office workshops in Los Angeles (Friday May 10th) and New York at the Harvard Club (Friday June 7th).  These events allow you to meet face-to-face with a few dozen single and multi-family offices while also being trained by multiple single family office executives and some of the top multi-family offices in the world: http://FamilyOfficesGroup.com/Workshops






Here is the speaker line up for the Family Office Workshop Series:

- John Johnson, Capricorn Investment Group, LLC ($5B Multi-Family Office) [LA Workshop]
- Paul Tramontano, Constelaltion Wealth Advisors (Top 30 Multi-Family Office) [NYC Workshop]
- Jonathan Bergman, TAG Associates, LLC (Top 30 Multi-Family Office) [NYC Workshop]
- Richard C. Wilson, Family Offices Group (#1 Family Office Association) [LA&NYC Workshops]
- George Isaac, GAI Capital LTD (Single Family Office) [LA Workshop]
- Michael Connor, Consolidated Investment Group ($1B+ Single Family Office) [NYC Workshop]
- John Bishop, Bishop Office, LLC (Single Family Office) [LA & NYC Workshops]
- Lee Hauser, PhD., First Foundation (Multi-Family Office) [LA Workshop]
- Todd Ganos, Integrated Wealth Counsel, LLC (Multi-Family OFfice) [LA Workshop]
- Bill Malloy, Malloy & Company (3rd Generation Single Family Office) [LA & NYC Workshops]


Benefits of Attending One or Both of These Family Office Training Workshops:

1) Get trained directly from $1B+ single family offices and top 50 multi-family office executives on how to operate, grow, and invest capital as a family office.  Learn about and take advantage of the rapidly growing family office industry.

2) Connect face-to-face with peers, ultra-wealthy families, and family offices that you can share resources or partner with in the future. (From our last family office workshop, negotiations are under way for three joint venture deals worth 7 and 8 figure potential.)

3) Come away with the top 20 fund management selection criteria that most family offices apply to their fund manager research process.  Plus, listen to a presentation on quick character analysis tools you can use to evaluate potential business partners, investors, or fund manager executives.

Reserve your seat today: http://FamilyOfficesGroup.com/Workshops

If you have any questions please call them at (212) 729-5067 or email them at Events@FamilyOffices.com

P.S. If you missed their invite to download their free family office report last week, you may still do so here today: http://familyofficesgroup.com/family-office-book

Jim Chanos' Presentation on China From The Wine Country Conference

Jim Chanos' of hedge fund Kynikos Associates recently gave a presentation entitled "China: The Edifice Complex" at the Wine Country Conference which benefits the Les Turner ALS Foundation.

Chanos has held a negative view on China for a while now, largely focused on the property market.  His presentation this time of course focuses on that as well but also highlights rising wages and a wealth gap.

Embedded below is Jim Chanos' China presentation from the Wine Country Conference:




We've previously summarized the hedge fund bear thesis on China as well.  And for more from the well-known short-seller, check out Jim Chanos' recent interview.

Mark Yusko's Presentation on Japan From The Grant's Conference

Today we wanted to highlight a presentation that Mark Yusko of Morgan Creek Capital Management gave at the Spring 2013 Grant's Interest Rate Observer Conference.  Entitled "This Time For the Money", his presentation focused on Japan.

In it, he argued that the current rally in Japanese equities is just getting started and that there's a lot of room to run.  This, he points out, is largely affected by "Abenomics" where the government has unveiled a massive attempt to combat Japanese deflation via aggressive monetary easing.

Yusko points out that there will be winners and losers in Japan and offers some ideas.  As potential winners, he listed Toyota, Marubeni, Mitsui, Mitsubishi UFJ, Sumitomo Mitsui Financial, Mizuho, and Japan Securities Finance.

As far as potential losers go, he questioned whether or not the short squeeze is over in names such as Sharp, Panasonic, Sony, and Fujitsu.  Yusko also singled out airlines and food companies as they struggled during the last reflation.  Will it be different this time around?

Embedded below is Mark Yusko's presentation from the Grant's Conference:


 

For other investor thoughts on the country, head to Kyle Bass' thoughts on Japan.

Baupost Group Reduces Vivendi Stake

Seth Klarman’s Baupost Group has reduced its holding in Paris listed media conglomerate, Vivendi  (PAR: VIV). According to Vivendi’s 2012 Annual Report, Baupost trimmed their position from a year  earlier from 2.04% to 1.38% of voting rights or from 25.5 million shares down to 18.22 million shares. 

Per Google Finance – “Vivendi SA is a France-based company engaged in telecommunications  services and media entertainment. The Company operates six core subsidiaries: Activision Blizzard,  a publisher of online and console games; Universal Music Group, a recorded music company;  SFR, a French telecommunications operator; Maroc Telecom Group, a mobile and fixed-line and  Internet operator in Morocco, active also in Burkina Faso, Gabon, Mauritania and Mali; GVT, a  telecommunications operator in Brazil; and Groupe Canal+, a subsidiary which offers premium  and theme channel distribution and programming in France. In addition, it holds stakes in See  Tickets (the United Kingdom), Vivendi Mobile Entertainment (France), Wengo (France) and  Elektrim Telekomunikacja (Poland). In February 7, 2013, it announced a definitive agreement to sell  Parlophone Label Group, a unit of EMI Recorded Music, to Warner Music Group.”

For more on this hedge fund, we've detailed some of Baupost Group's recent portfolio activity here.