Friday, July 11, 2014

What We're Reading ~ Hedge Fund Links 7/11/14

Baupost takes stake in Banco Espirito [ValueWalk]

Carl Icahn says time to be cautious about US markets [CNBC]

Steve Eisman shuts Emrys Partners, says fundamental analysis no longer viable [FINalt]

Paul Singer stands to make over 1,600% return [Here in the City]

Blackstone readies big bet hedge fund [WSJ]

Paulson credit fund gains from Lehman, Rescap and Dex Media [ValueWalk]

Viking Global reshuffles top ranks [HedgeWorld]

Update on Bridgewater's performance [Bloomberg]

Why some family offices are deciding to become hedge funds [GuruFocus]

How to successfully start a hedge fund [eFinancialNews]

Wednesday, July 9, 2014

What We're Reading ~ Analytical Links 7/9/14

The Education of a Value Investor [Guy Spier]

Short selling drops to lowest level since Lehman [FT]

Everything wrong with investor behavior in one article [Reformed Broker]

Another sign the bull market is nearing its end [Marketwatch]

The differences between a portfolio manager and analyst [CFA]

Goodbye malls of America [Bloomberg View]

A look at Western Union [ValueLine]

Profile of mutual fund king Bill Miller [WSJ]

Carlos Slim bows to Mexico telecom reform [Reuters]

15 facts about Dubai [Business Insider]

Hound Partners Increases Carter's Stake

Johnathan Auerbach's hedge fund firm Hound Partners filed an amended 13G with the SEC regarding shares of Carter's (CRI).  Per the filing, Hound now owns 6.92% of the company with over 3.7 million shares.

This means they've boosted the number of shares they own by around 10% since the end of the first quarter.  The filing was made due to activity on June 12th.  Conversely, we pointed out a few months ago that Tiger Global had exited its CRI stake.

We've highlighted other recent portfolio activity from Hound here.

Per Google Finance, Carter's is "a branded marketer of apparel for babies and young children in the United States. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh. Its Carter’s brand provides apparel for children sizes ranging from newborn to seven. OshKosh brand provides its line of apparel for children sizes newborn to 12. Its Carter’s, OshKosh, and related brands are sold to national department stores, chain and specialty stores and discount retailers."

Michael Mauboussin on Skill Versus Luck and Developing an Investment Process

Michael Mauboussin, head of global financial strategies at Credit Suisse, sat down with Motley Fool earlier this year to talk about investing.

In it, he touches on skill versus luck and notes how investors need to have a process.  He says this is comprised of 3 things:

1.  An analytical component (financial statement analysis, etc)
2.  A behavioral component (patterns of mistakes and learning from them)
3.  An organizational component (what's going on in your environment that allows you to be more successful)
He admits that evaluating your process is a difficult thing to do, but recommends utilizing an investing journal.  Mauboussin says doing this can fight hindsight bias and creeping determinism.

He touches on numerous other topics and embedded below is the full interview with Mauboussin:

For more from Mauboussin, be sure to read his books, The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing as well as Think Twice: Harnessing the Power of Counterintuition.

Tuesday, July 8, 2014

Jeff Saut Predicts Pullback Within Secular Bull Market

It's been quite a while since we checked in on market strategist Jeff Saut's latest commentary, so we figured it's time to see what he's thinking.  This week, Saut's investment strategy piece is entitled, "Making a Market Call." In it, he predicts that the market will see the "first decent pullback of the year" in mid-July or early August.

He arrives at this prediction based on various readings and he's advising raising cash levels, comparing it to the summer of 2011 when the market dipped 18%.  But taking a step back to the bigger picture, he also believes we're still in the midst of a secular bull market that has years left to run.

Embedded below is Jeff Saut's latest investment strategy piece:

You can download a .pdf copy here.

Hoplite Capital Discloses Sinclair Broadcast Group Stake

John Lykouretzos' hedge fund Hoplite Capital has filed a 13G with the SEC regarding shares of Sinclair Broadcast Group (SBGI).  Per the filing, Hoplite now owns 5.2% of the company with over 6 million shares.

This is a newly disclosed equity position for the hedge fund and the filing was made due to activity on June 25th.  You can view other portfolio activity from Hoplite here.

Per Google Finance, Sinclair Broadcast Group is a "diversified television broadcasting company. The Company owns or provides certain programming, operating or sales services to more television stations."

JANA Partners Goes Activist on PetSmart

Barry Rosenstein's activist hedge fund JANA Partners has filed a 13D with the SEC regarding shares of PetSmart (PETM).  Per the filing, JANA now owns 9.9% of the company and is the company's largest shareholder with over 9.8 million shares.  This is a brand new position for them.

The filing notes that JANA expects to meet with management to discuss "strategic alternatives' including a sale of a company, the company's capital structure (and return of capital to shareholders), board composition and other items. 

The 13D was filed due to activity on June 23rd.  The hedge fund was out buying PETM shares at prices around $57.80 in early June.

For more on this investor, check out Barry Rosenstein at the activist investing panel at the Milken Institute.

Per Google Finance, PetSmart "supplies products, services and solutions for the lifetime needs of pets. The Company operates a website for pet supplies, foods and different animal needs. The Company's stores also feature pet styling salons that offer pet grooming services, from full-service styling to baths, toenail trimming and teeth cleaning."