Friday, September 6, 2013

FINforums Annual Hedge Fund Summit

FINforums Annual Hedge Fund Summit  

Thursday, September 19, 2013  |  New York City 

Now in its third year, the FINforums Annual Hedge Fund Summit is a must attend for anyone   involved in the hedge fund industry, including fund managers, high-net-worth investors, institutional investors, lawyers, accountants, technology providers, private bankers, advisors and consultants. 

Keynote Address

• Barbara Novick, Vice Chairman, BlackRock 

Topics Covered Include

• The Global Macro Outlook 
• The Business of Running a Hedge Fund 
• Tips on Marketing and Capital Raising 
• An Investment Consultants Roundtable 


Buy-Side / Fund Managers / Investors: $395.00 
Service Providers / Other: $695.00 

Friends of MarketFolly receive a 15% discount. Use code: MF15  

Register Today 

Visit for a more information, including a detailed agenda

Wednesday, September 4, 2013

What We're Reading ~ Analytical Links 9/4/13

The Manual of Ideas: The Proven Framework for Finding the Best Value Investments [Amazon]

Risk is not a four-letter word [Herb Greenberg]

How the Verizon-Vodafone deal was sealed over gym talk & a breakfast [Globe & Mail]

Vodafone (VOD) spreadsheet post-deal [MicroFundy]

Is discounted cashflow the best way to value a company? [Google Plus]

Profile of billionaire Jorge Lemann [BusinessWeek]

MSFT: Ballmer out, ValueAct in - get ready for the next shoe to drop [All Things D]

Microsoft / Nokia: the deal that makes no sense [Stratechery]

Why is chicken more expensive? Ask McDonald's [BusinessWeek]

The biggest risk Zillow (Z) faces isn't what you think it is [LittleBear]

How 'Teslanaires' made fortunes on Tesla stock [Sun-Sentinel]

CNBC ratings hit 20-year nadir [NYPost]

Bruce Berkowitz Talks Fannie/Freddie Preferreds, AIG & Sears

Fairholme Capital's Bruce Berkowitz owns preferred shares of both Fannie Mae and Freddie Mac and joined David Faber of CNBC to talk about the securities in a rare interview.

Fannie/Freddie Preferreds

We've highlighted before that Berkowitz is seeking dividends on these securities.  The fund manager notes that you can buy the securities at such discounts with the potential for them to trade at par again if they start paying dividends.

Fairholme likes to buy stakes in systemically important institutions and Berkowitz says Fannie & Freddie are just that.

Berkowitz Talks AIG

He also touched on his stake in AIG (AIG).  He said: "Investing is all about comparing what you give versus what you get.  Now when you look at today's stock price with AIG, it still sells significantly below liquidation value.  So at some point the stock market price will meet the book value of AIG."  

He says book value is around $60 per share currently and he expects liquidation value will double in a few years. 

So when will he sell?  He said he'll have to consider the idea of selling in the event that shares eventually trade at book value & higher. 

He also addressed his large position size, noting that Benjamin Graham once distributed shares of GEICO rather than selling when the position size became too large for his fund.  So it sounds like Berkowitz is considering this option as well for the future.

Talks Sears (SHLD)

Berkowitz thinks Eddie Lampert has been doing a good job and he notes he's in the minority in that opinion.  He compares Sears to Simon Properties (SPG) and it's clear Berkowitz views as SHLD as a real estate play.

Embedded below is the video of Berkowitz's interview:

For more on this manager, you can check out Fairholme's latest portfolio in the new issue of our premium newsletter.

Glenview Capital Becomes Large J.C. Penney Shareholder

We know you'd love to stop hearing about J.C. Penney (JCP), but when this many major hedge funds are trading shares, it's worth highlighting over and over again.  This latest activity:  Larry Robbins' Glenview Capital has boosted its holdings in the retailer.

Per a 13G filed with the SEC, Glenview has disclosed a 9.10% ownership stake in JCP with 20,060,830 shares.  This marks almost a 138% increase in their position size since the end of the second quarter.  The filing was required due to activity on August 22nd.

To see the rest of Glenview's US equity portfolio, we recently released a brand new issue of our premium newsletter.

Other Hedge Funds Involved in JCP

As we've flagged earlier: Bill Ackman has sold entirely out of JCP.  Richard Perry's hedge fund bought some of those JCP shares.  And yesterday we saw that Kyle Bass has purchased JCP.  And now we see that Glenview Capital has added to their position.  Not to mention, other big names like Soros Fund also own shares.

We'll continue to monitor the SEC filings for further activity to see which funds are taking advantage of a large seller's exit or are wagering on a company turnaround, or at the very least, stability.

Tuesday, September 3, 2013

Market Strategist Jeff Saut: September Historically the Worst Month For Markets

It's been a while since we checked in with market strategist Jeff Saut, so below is his latest weekly commentary entitled, "Money and Savings?"  In it, he talks about the difficulty in timing the market and how he's tried to manage risk the past few months while expecting a decline.

While things haven't quite played out as he's thought recently, he still pulls some interesting data out:

"September is truly the worst month historically.  Indeed, September has seen the worst average returns for the D-J Industrials over the past 50 and 100 years."

Embedded below is Saut's latest commentary:

You can download a .pdf copy here.

We've previously posted how Saut has raised cash in anticipation of a decline in stocks.

Viking Global Boosts Triumph Group Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding shares of Triumph Group (TGI).  Per the filing, Viking now owns 5.4% of the company with 2,834,161 shares.

This marks an increase of over 37% in the number of shares they own since the end of the second quarter.  The 13G was required due to portfolio activity on August 20th.

Per Google Finance, Triumph Group "designs, engineers, manufactures, repairs, overhauls and distributes a portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. It offers a range of products and services to the aerospace industry through three groups of operating segments: Triumph Aerostructures Group, whose companies' revenues are derived from the design, manufacture, of metallic and composite aerostructures and structural components; Triumph Aerospace Systems Group, and Triumph Aftermarket Services Group, whose companies serve aircraft fleets. In March 2013, United Technologies Corp sold the former Goodrich Corporation pump and engine control systems business to the Company. In May 2013, the Company announced the acquisition of Primus Composites from Precision Castparts Corp."

For more on this hedge fund, we've also posted up excerpts from Viking's Q2 letter.

Kyle Bass Discloses J.C. Penney Stake; Perry Buys Some of Ackman's Shares

If you aren't tired of hearing about J.C. Penney yet (JCP), here's even more hedge fund activity in the name:

Kyle Bass Starts J.C. Penney Stake

First, a 13G filed with the SEC has revealed that Kyle Bass' Hayman Capital owns a 5.2% stake in J.C. Penney (JCP) with over 11.4 million shares. This is a brand new position for the hedge fund as they did not own any JCP at the end of the second quarter.

Perry Buys Ackman JCP Shares 

Recently, we highlighted how Richard Perry's hedge fund Perry Capital had taken a position in JCP.  Well, they've since added to that position.  We also flagged how Bill Ackman was exiting his JCP stake and as it turns out, Perry was one of the buyers, purchasing 3 million shares at $12.90.  They now own around 8.62% of the company

This whole JCP saga will make for a very interesting investing/business school case study one day.