Friday, July 19, 2013

Discount to Alpha Hedge West Conference: Burbank, Bass, Huemer, Rabinowitz & More

The 19th annual Alpha Hedge West Conference is coming up and we just wanted to let readers know (especially those on the West Coast) that you receive a 10% discount by using code: Folly10 

The event typically has focused on emerging markets and macro themes, but this year they're expanding to cover hedge fund seeding, private equity, and growth of the family office.  As you'll see below, the speakers list is quite comprehensive covering a wide range of finance.

You can register for Alpha Hedge West here.

Alpha Hedge West Conference Details

When: September 15-17, 2013

Where: Ritz-Carlton,  San Francisco, California

Speakers List

-  Macro debate between John Burbank (Passport Capital) and Kyle Bass (Hayman Advisors)

- Best investment ideas session led by Craig Dandurand, Portfolio Manager (Absolute Return), CalPERS

- Structured credit discussion: Andrew Rabinowitz (Marathon Asset Management), Richard d'Albert (Seer Capital Management), Christopher Hentemann (400 Capital Management), Amin Majidi (Premium Point Investments).

- Alternative investing strategies panel: Jason Huemer (Visium Asset Management), Michael Gaviser (Kohlberg Kravis Roberts), Bob Kern (US Bancorp), Mazin Jadallah (Alphaclone), and Clay Smudsky (Forward)

- And plenty of other speakers: Mark Okada (Highland Capital), Edward Oppedisano (Tricadia Capital), Paul Twitchell (Whitebox Advisors), Eric Alt (Hall Capital Partners), David Andre (Cerebellum Capital), Mark J.P. Anson (Acadia Investment Management), Kurt Billick (Bocage Capital), Christopher Cole (Artemis Capital), Francis X Frecentese (Lyxor Asset Management), Pat Grady (Sequoia Capital), Spencer Hempleman (Ardsley Partners), Thomas Hewett (Perella Weinberg Partners), Ronnie Jaber (Carlyle Group), Steve Kahn (Talpion Fund Management), Jonathan Little (Northill Capital).

Here's the full list of speaker bios.

10% Discount For Market Folly Readers

Don't forget to get 10% off by entering code: Folly10  Click here to register for the event.

What We're Reading ~ Hedge Fund Links 7/19/13

Where is the sweet spot for hedge fund AUM? [aiCIO]

The #1 thing worrying hedge fund managers right now [SFGate]

Hedge fund alpha drops 1700 basis points in 11 years [ValueWalk]

First half hedge fund performance round up [Hedge Fund Intelligence]

Dan Loeb's Third Point Re files for IPO [Reuters]

Activist investors fuel event-driven returns [FT]

Blackstone's Byron Wien: his take on Asia [Barrons]

Hedge funds spot opportunities in Poland sell-off [Reuters]

Hedge fund long positions beat the S&P [Business Insider]

Does past performance matter? [CBS]

Desperate hedge funds 'as seen on TV' [FT]

How to advertise your hedge fund [Marketwatch]

Hedge fund fees: exotic expenses [Forbes]

Redbull fueled all-nighters put Fortress fund on top [Bloomberg]

Thursday, July 18, 2013

Tiger Global Starts BBA Aviation Stake

Chase Coleman's hedge fund firm Tiger Global Management has disclosed a new position in London listed BBA Aviation (LON:BBA).  Due to trading on July 9th and 11th, Tiger Global now holds 4.22% of BBA's voting rights.

BBA Aviation's stock price is up about 50% in 2013 and it looks as though Tiger Global acquired some of their stake at approximately 286p / share.

Per Google Finance, BBA Aviation plc "is a provider of aviation services and aftermarket support to operators of business and general aviation, military and commercial aircraft. The Company delivers its services at over 220 locations on five continents. The Company operates through two segments: Flight Support segment and Aftermarket Services segment. The Company’s Flight Support segment provides refueling, ground handling and other services to the business, general and commercial aviation markets. Its Aftermarket Services segment maintain, manufacture and support engines and aerospace components, sub-systems and systems. The Flight Support segment consists of Signature Flight Support and ASIG, and Aftermarket Services and Systems segment consists of Engine     Repair and Overhaul, Legacy Support and APPH. Its Flight Support has approximately 200 locations worldwide, and its Aftermarket Services has approximately 23 locations worldwide.”

For more on this hedge fund, we've detailed more of Tiger Global recent portfolio activity here.

Intangible Attributes That Lead to Intelligent Investment Decisions: East Coast's Q2 Letter

Christopher Begg is out with East Coast Asset Management's Q2 letter and in it he tackles the intangible attributes that they feel lead to intelligent investment decisions.

Here's a few of the intangibles they've identified:

- Ability to be receptive
- A curious nature
- Desire to seek continuous improvement

Expanding on investment process, Begg writes,

"Freedom from answers is not indecisiveness, it is an awareness of the biases that lead to false convictions where one roots oneself into a position that is immovable.  We are not always right, and humility has taught us to treat every capital allocation decision we make with the assumption that we are unaware of some unknowable piece of information.  Even after we decide to make an investment, we set a course to discover what we missed."

The full letter is below.  For those less interested in process and investment approach, East Coast also lays out their investment thesis for an agricultural equipment manufacturer at the end of the letter:

East Coast's Q2 letter:

For more from this firm, head to East Coast on transformation investments.

Corsair Capital's Thesis on American Realty Capital Properties (ARCP): Q2 Letter

Jay Petschek and Steven Major's hedge fund Corsair Capital recently sent out their Q2 letter and in it they detailed their thesis on a new core investment, American Realty Capital Properties (ARCP).

The main story here is that this is an underfollowed company with minimal sell-side coverage that's gone through a "major transition" over the past 6 months.  The company is a net lease real estate investment trust that owns single tenant commercial properties.

Overall, Corsair sees numerous catalysts for the company, including closing 2 deals, internalizing the management company, increasing the dividend slowly, and acquiring more properties.

Embedded below is Corsair's Q2 letter with the full ARCP thesis:

In the other part of Corsair's letter, the hedge fund firm also reveals they have a new core position in ING US Inc (VOYA).  This is a spin-off of the company's US operations that came to market at ~50% of book value as the company was a 'forced seller.'  Corsair thinks the company will trade at book value ($38) or slightly higher as the company drives initiatives and they could start a dividend.

For more on this hedge fund, we've also posted up Corsair's thesis on Ryman Hospitality here.

Wednesday, July 17, 2013

Trian Partners' PepsiCo White Paper: Nelson Peltz's PEP Thesis

Nelson Peltz's hedge fund firm Trian Partners today released a white paper on PepsiCo (PEP).  The activist investor owns $1.3 billion worth of shares and presented their thesis on PEP in a slideshow.

Trian argues that PepsiCo (PEP) is at a strategic crossroads and they've outlined 2 strategic alternatives to enhance shareholder value at the company.

Option A:  Merge PepsiCo With Mondelez

Merge PEP with Mondelex (MDLZ), creating a global snacks company.  This tie-up could lead to $175 of implied value per PEP share and approximately $72 of implied value per MDLZ share by the end of 2015.  It's also worth pointing out that Trian Partners owns a stake in MDLZ as well.

Option B: Split-Up PepsiCo 

If PEP doesn't pursue MDLZ, they argue the company should separate the snacks and beverages segments.  Under this scenario, they see $136 to $144 of implied value per PEP share by the end of 2015.

Embedded below is the full .pdf of Trian Partners' white paper and Nelson Peltz's analysis of PepsiCo:

You can download a .pdf copy here.

For more on these companies, don't miss Nelson Peltz's thoughts on PEP/MDLZ from the Delivering Alpha Conference today.

Carl Icahn on Activism, Herbalife & More: Delivering Alpha Conference

At the Delivering Alpha Conference, activist investor Carl Icahn sat down to talk about activist investing and some of his holdings like Herbalife (HLF), Dell (DELL), Netflix (NFLX) and more.

Icahn had the audience in the palm of his hand, talking stocks and making people laugh almost as if he was a stand up comedian.

On Dell (DELL)

On activism: Icahn said good targets are companies that are badly managed. 

Icahn said he wouldn't comment on Dell (DELL) because of the SEC.  Jim Chanos has been short.  Icahn says he's never seen a board as dysfunctional as Dell's.  He argues that Jim Chanos misses the fact that you can put a good board and CEO in and institute change with accountability.  He even went on to say that he has a better record than Chanos.

On Netflix (NFLX)

He thought about selling some, but his son threatened to leave if he did, so that talked him out of it.  He likes Reed Hastings and says it's hard not to like someone who helps make you $100 million in a month or so.

On Herbalife (HLF)

Icahn is still in Herbalife (HLF) and hasn't sold a share.  He said, "I never would have looked at Herbalife if Ackman hadn't come out with that report." 

He thinks HLF's CEO is a good CEO and believes very strongly in the product.

While Icahn vs. Ackman has been well documented, Icahn says he no longer dislikes Ackman because he's made him money on HLF.  And of Ackman's large HLF short position, Icahn says: "It's stupid to take that big of a position anyways."

He also pimped his Twitter account, saying he was going to tweet insights about stocks he was allowed to talk about and he seems to want to boost his follower count so give him a follow: @Carl_C_Icahn

For more from the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Nelson Peltz on PepsiCo & Mondelez 

- Best Ideas Panel with Mark Kingdon, Chris Hohn, Jim Chanos & Lee Cooperman

- Larry Robbins on healthcare

Larry Robbins & Jacob Gottlieb on Healthcare Plays: Delivering Alpha Conference

At the Delivering Alpha Conference, Larry Robbins of Glenview Capital, Jacob Gottlieb of Visium, and Kris Jenner of Rock Springs Capital sat down to talk the Affordable Care Act and Obamacare.

Larry Robbins, Glenview Capital

Robbins notes that Thermo Fisher Scientific (TMO) is their largest position.  He says it's independent of the Affordable Care Act as it's 75% consumables.  The growth there is driven by capital allocation.  The space will benefit from sequestration ending in 2014.

He also likes Walgreen's (WAG).

Robbins expects an increase in pharmaceutical consumerization after Obamacare starts.  Robbins also noted he still likes McKesson (MCK) ~ we've highlighted in the past how it's been one of his largest holdings for some time.

Glenview's founder notes that healthcare used to trade at a 10% premium to the market, but their portfolio trades at a 25% discount so he loves if companies buy back stock or make acquisitions.  He sees hospitals likely to continue consolidation, which means the for-profit players gain share.

With the Affordable Care Act and more people getting insured, you'll see growth on growth (especially in hospitals) but on the other hand, there will be losers down the chain as they're over-earning now and will get squeezed.

In the space, big pharma have a lot of cash but not a lot of innovation.  Small companies are exactly the opposite, so consolidation will continue there.

If you missed it, Robbins recently made a very rare media appearance and talked about HMA, THC and what he thinks about this market.

Jacob Gottlieb, Visium Asset Management

Jacob Gottlieb of Visium voiced his concern over taxes on healthcare as it could be counterproductive to making more affordable and better quality care.  As far as what his picks go, he likes healthcare IT providers and well-run hospitals.

Kris Jenner, Rock Springs Capital

Kris said there will be winners and losers in all of this.  The opportunities in healthcare are robust and based in innovation.  That innovation will be more-so in business models than new drugs.  He said he likes Vertex Pharmaceuticals (VRTX) and Gilead Sciences (GILD).

Thanks to @EquityNYC for live tweets on this panel.

For more from the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Nelson Peltz on PepsiCo & Mondelez 

- Best Ideas Panel with Mark Kingdon, Chris Hohn, Jim Chanos & Lee Cooperman

- Carl Icahn on activism

Delivering Alpha Best Ideas Panel: Mark Kingdon, Chris Hohn, Jim Chanos, Lee Cooperman

The Delivering Alpha Conference today featured a 'best ideas' panel that featured some hedge fund titans including Jim Chanos (Kynikos Associates), Chris Hohn (Children's Investment Fund), Mark Kingdon (Kingdon Capital), and Lee Cooperman (Omega Advisors).  Here's a brief summary of their picks:

Mark Kingdon, Kingdon Capital

Long Japanese automakers: Long Toyota (TM), Long Fuji Heavy (7270.TO) Long Mazda (7261.JP)

He says these companies obviously benefit from Abenomics in Japan.  Toyota he likes as an innovative leader with focus on hybrid technology.  Fuji Heavy (Subaru) is moving from low margin to high margin products.   He says Mazda might have the most upside of the names. 

Chris Cooper-Hohn, Children's Investment Fund

Long Porsche (PAH3.DE) - It's basically a holding company owning 150 million shares of Volkswagen.  If the two merge eventually, the stock doubles.  We've highlighted Hohn's thesis on Porsche before.

Long EADS (EAD.FR) - A liquid large cap with a new focus on making money.  Could double over 2 years. 

Long Aurizon Holdings (AZJ.AU)- Australian railroad, a total turnaround story as the company has transitioned from government-owned to a company more aimed at profit.  He thinks it could double over next 3 years

Lee Cooperman, Omega Advisors

Long Qualcomm (QCOM) - points to a large amount of cash on the balance sheet and a lot of pessimism on the name.

Long Sandridge (SD) - could be a double.

Long Express Scripts (ESRX) - company is growing and buying back stock.  We've also posted up another Cooperman interview recently where he talked about other stocks he likes.

Jim Chanos, Kynikos Associates

Short Caterpillar (CAT) - a bet on China's property development slowdown and he says the company is just exposed to the wrong products at the wrong part of the cycle.  Here's Chanos' pitch on CAT here.

Short Hewlett Packard (HPQ) - he also reiterated his call against the PC, saying it's dying a slow death.  This has been a longstanding short and we've posted up Chanos' thesis on HPQ as he called it a value trap last year.

For more from the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Nelson Peltz on PepsiCo & Mondelez

- Larry Robbins & Jacob Gottlieb on healthcare plays

- Carl Icahn on activism 

Nelson Peltz on PepsiCo, Mondelez & DuPont: Delivering Alpha Conference

Trian Partners' Nelson Peltz sat down at the Delivering Alpha Conference today and talked about PepsiCo (PEP), Mondelez (MDLZ) and Andrew Ross Sorkin revealed that Peltz has been building a position in DuPont (DD).

Back in April, we highlighted how Peltz took stakes in both PEP & MDLZ.  At the event today, he laid out two scenarios for PEP which he thinks the company should pursue:

On PepsiCo and Mondelez

1. PEP should buy Mondelez (MDLZ) for $35-38 per share.  MDLZ is part of the split from the old Kraft that broke up into Mondelez and Kraft Foods (KRFT).  MDLZ is seen as the fast growing snacks business (Cadbury etc).

The problem with MDLZ he says is operational.  He loves that the CEO made important strategic moves (splitting up the old Kraft entity), but notes that management really needs to boost margins to catch up with direct competitors.

2. Separate Pepsi's beverage side from its snacks business (FritoLay).  Peltz says that these businesses have dis-synergies and they would benefit from a split.  He says Pepsi's beverage side can go to a cashflow generating company run with appropriate leverage.

Then, Peltz noted that the FritoLay snacks business can flourish on its own and even possibly pursue an acquisition of MDLZ after a potential PEP break up since they're both in the snacks business.

Peltz did acknowledge the secular trend of consumers focusing more on healthy items.  He thinks this is more-so focused on sugary drinks, but does note that sweet/salty snacks could be vulnerable as well.

Peltz's New Stake in DuPont?

Andrew Ross Sorkin also said that sources are pointing to Peltz acquiring a stake in DuPont (DD).  Peltz wouldn't really add any color when asked about it (pun intended).

Embedded below is video of Peltz's interview:

For more on this investor, we've highlighted some of Peltz's trading activity here.

And for more summary of the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Best Ideas Panel with Mark Kingdon, Chris Hohn, Jim Chanos & Lee Cooperman

- Larry Robbins on healthcare

- Carl Icahn on activism

John Paulson on Gold, Housing/Real Estate & Risk Arbitrage: Delivering Alpha Conference

John Paulson, founder of hedge fund firm Paulson & Co, sat down with CNBC's Carl Quintanilla at the Delivering Alpha Conference today and touched on numerous topics, mainly focusing on gold and the housing recovery/real estate.  He noted that his returns this year at his main funds range from 5% and 32%.

Paulson on Gold

He's been getting a lot of negative publicity for his Gold Fund.  However, he points out that this fund is only around 2% of his assets under management.  He was looking for a currency alternative to the US dollar in the event we get inflation, and he notes that gold has been an excellent candidate for this in the past.

Paulson said, "Although the Fed has printed a lot of money to date, there is little inflation.  Some (investors) who bought gold have lost patience.  The rationale for owning gold has not gone away.  The consequences for printing money over time will be inflation... it's just difficult to predict when."

He thinks gold is in a 'pause period' right now and sees demand for gold increasing again and points out that it's always been volatile.  He thinks it's an important part of anyone's portfolio.

Paulson on Housing / Real Estate / Land

They took a long-term view on housing, as it's a cyclical area (7 years up, 7 years down).  They saw a peak around 2006 (and shorted subprime) and they think it's bottomed so they've gone long.  He sees it as the beginning of the recovery and said it could last another 4-7 years, inviting others to jump in, saying "it's not too late."

Paulson went on to say, "Buying a home is the best investment an individual can make.  Affordability is at an all time high.  You can lock in rates of a fixed rate mortgage and get the benefits."

He then continued, noting, "I'm not sure (home prices) will increase 10% every 5 years, but probably around 5-7%."

Paulson has exposure in real estate via land as he says land is actually affected the worst in real estate cycles.  He noticed this pattern in the crisis of 1990, so he set up special real estate funds to exclusively buy entitled lots across the country.

Prices fell almost 80% from their peak value in 2006.  They like to buy in distressed situations (from banks, builders, etc) in growth areas of the country.  They've focused on Arizona, California, Colorado, Nevada, and Florida.

They've also played securities:  Before/during the crisis, they shorted BBB tranches, then started buying AAA tranches that fell in price by 40%.

He also highlights his stake in Realogy (RLGY), the largest residential broker in the country (we flagged Paulson's stake in RLGY late last year and also pointed out how Lone Pine Capital bet on RLGY recently as well).

On his bet on the housing recovery, John Paulson said he's as sure of this bet as he was about his subprime short.

Paulson on His Legacy Risk Arbitrage Strategy

Paulson's legacy fund strategy is merger arbitrage.  He talked about how companies he likes to buy are often ones from the announced deals that could get a competitive bid.  He's also looking to see which industries will see consolidation and take a stake in companies that could be takeover targets.

He also talked about his stakes in Sprint and Leap Wireless that have panned out well.

Paulson also noted how there's a lot of talk/chatter in the cable business.  He pointed to John Malone's stake in Charter Communications (CHTR), which he thinks will acquire more cable assets.  While there's been talk of Time Warner Cable (TWC), he says that's a large entity.  He also named Cablevision (CVC) as a potential target, but notes that's up to the Dolan family.

In risk arbitrage, he says "There's always a regulatory risk, and that's an important part of the analysis."

Paulson said he never considered retiring after his successful big subprime bet: "The goal in money management is not to do one great year, it's to compound returns over many years."  He says he'd like to manage money another 20 years, as he admires Warren Buffett and George Soros.

Video from Paulson's interview is embedded below:

For more from the Delivering Alpha Conference, head to:

- Nelson Peltz on PepsiCo & Mondelez

- Best ideas panel with Mark Kingdon, Chris Hohn, Jim Chanos & Lee Cooperman

- Larry Robbins & Jacob Gottlieb on healthcare plays

- Carl Icahn on activism 

Jim Chanos Short Caterpillar (CAT): Delivering Alpha Conference

At the Delivering Alpha Conference today, Kynikos Associates' Jim Chanos laid out the chase to short Caterpillar (CAT).  Basically, he sees CAT as a loser in a commodities super cycle (on the heels of a Chinese construction boom) is coming to an end.

This notion isn't really new from Chanos, as he has repeatedly talked about his bearishness on China property/development.

Chanos says Caterpillar is a great company, but they're essentially levered to the wrong products at the wrong time (the worst part of a cycle).  While it's cheap at 12-13x earnings, he points out that earnings aren't really expected to grow in the next few years (meaningfully above historical levels).

Embedded below is the video of Chanos' idea explained in full:

For more on this short seller, head to Jim Chanos' Sohn Conference presentation on shorting hard disk drive makers.

What We're Reading ~ Analytical Links 7/17/13

Notes from the Delivering Alpha conference: part 1 and then part 2 [Reformed Broker]

There is no such thing as emotionless investing [Abnormal Returns]

Curse of the macro tourists [Big Picture]

Are you guaranteed to lose 3.5% every year? [Pragmatic Capitalist]

Muddy Waters Research negative on American Tower (AMT) [Barrons]

Finding value outside of the US [Institutional Investor]

Lessons learned from well-behaved investors [NYTimes]

NAAIM survey of manager sentiment []

Reminder to all investors: bonds are not safe [The Atlantic]

Razors, lighters & pens: a pitch on Societe Bic [Graham Disciple]

High net worth investors taking more risk [WSJ]

3 rules to make your company exceptional [Harvard Business Review]

Carson Block: adventures abroad could hurt US companies [Dealbook]

Meet the man responsible for steering China's currency reserves [WSJ]

Google has discovered a new revenue driver and it's a threat to Amazon [Yahoo Finance]

Carlos Slim invests in Shazam [WSJ]

Tuesday, July 16, 2013

The Growing Trend of Hedge Funds Starting Reinsurers

In the hedge fund industry, there's a growing trend of managers setting up reinsurers.  While Warren Buffett's Berkshire Hathaway is the most prominent example of using insurance float to invest, many other top managers have started reinsurers, including:

- David Einhorn's Greenlight Capital
- Dan Loeb's Third Point
- George Soros has apparently been involved with 4
- Steve Cohen's SAC Capital
... and many more

Opalesque TV recently sat down with Joe Taussig of Taussig Capital to talk about this trend.  So why have all these funds acquired or started reinsurers?  He notes,

"The primary reason is that the reinsurers are virtually certain to outperform the managers' funds.  Secondarily, the managers obtain assets from sources otherwise unavailable to them and all of these assets are permanent capital.  Tertiary benefits include gentler tax treatment for reinsurers compared to funds in the UK, Canada, Australia, and the US, daily liquidity if the reinsurers become publicly traded, and a better way to monetize the fund manager than selling some or all to a financial institution or doing an IPO."

Some of the publicly traded reinsureres include Greenlight Re (GLRE) and Third Point Offshore (TPOG).

Obviously a major draw is permanent capital.  To truly be a long-term investor, you have to be able to focus on the long-term and not worry about whether or not your investor base is going to pull their capital at the first sign of trouble.  Reinsurers help to partially offset this problem by giving the fund manager stable capital, and in Buffett's case, nullify fickle capital entirely.

Taussig goes into detail explaining this trend, why funds are doing it, and the benefits of doing so in the interview. Embedded below is Opalesque's video:

Coatue's Philippe Laffont on Investing & Career Advice: Interview

Philippe Laffont, founder of hedge fund firm Coatue Management, recently sat down with OneWire to give an interview on investing, his career, how he got started, and advice for others.

Laffont on Investing

On how to think as an investor: "For us, the key to investing is thinking: how can a company perform 3 to 5 years out?  Not to focus so much on the short term, try to see the forest from the trees, think about the long term.  Few people in the market think about the long term, and that's our edge.  It's patience and long term thinking."

On going long:  "The long side is hard because you're trying to project what can happen 5 years out and then come back.  It so happens, it's much easier to disprove things."

On short selling:  "If there's enough red flags, sooner or later it's like a sand castle, there's too many bad pillars.  Sooner or later, the castle crumbles.  The short side is more about pattern recognition and seeing odd things.  If there's enough odd things, that leads you to believe the company is wrong.  There's a second type of short, which is opposite of your long, which is: if Google does well, the Yellow Pages are probably not going to do well.  If Apple does well, that's probably not great for Nokia/RIM.  So that's the sort of thesis/anti-thesis winner vs loser. There's a whole big other group of shorts that are like strange anomalies that you have to pick."

On Coatue's beginnings:  "We started with $50 million in 1999.  In our first few years, the Nasdaq was down 80%.  In your professional life, more than once, you're going to come across something that goes absolutely the opposite way of what you were hoping."

On how he started as an investor:  ""We (he and his brother) started buying tech stocks in the 90's, blue chip's like Microsoft, Intel, stuff we knew (like Peter Lynch's approach).  We confused luck with skill.  But nevertheless, it gave us the passion.  If the market had gone down in those three years, I would have been doing something else.  The luck is very important."

Laffont's Career Advice

His advice: "The career advice I would have for people, is you need to do two things when you graduate. You need to do them both passionately. You need to do one thing passionately that is the obvious thing that you are supposed to do after you graduate (if you are in business, go to Goldman Sachs or Morgan Stanley).  At the same time you do that, in my mind, you need to do one thing completely off the beaten path, but also passionately.”

If you're seeking an investment career, he strongly advocated going to the big investment banks for 2-3 years in a "competitive" environment because you'll get the training you need, you'll see if you have the passion for it, and you'll learn a lot.

On seizing the moment: "When someone opens a door for you.. and everyone in life will have a few times doors opened... you have to come to that meeting prepared to achieve one thing.  For me, I knew I would speak with (Julian Robertson) for 1 minute, I went right for it (asking for a job)."

For more on Coatue's founder, we posted up Laffont's most recent media appearance on technology trends.

Embedded below are the videos of Laffont's OneWire interview, h/t to ValueWalk:

Video 1

Video 2

For other rare interviews with 'Tiger Cub' hedge fund managers, we also posted up Viking Global's Andreas Halvorsen and his thoughts on investment process.

Ruffer Investment Company on the 3 Arrows of Deflation: Q2 Letter

Jonathan Ruffer is out with his Ruffer Investment Company Q2 letter.  This time, the commentary is written by Henry Maxey.  Maxey joined Ruffer in 1998 and became Chief Executive in April 2012.  Entitled "Three Arrows of Deflation," the Q2 letter addresses what they think will control the direction of markets over the coming year.

Maxey lays out the situations in Japan, US and China and labels them "a three-way disinflationary impulse in an otherwise powerfully reflationary world."

Embedded below is Ruffer Investment Company's Q2 letter:

As we've noted a few months ago, Ruffer was reducing equity exposure and adding interest rate hedges.