Friday, September 25, 2015

Hedge Fund Links ~ 9/25/15

Hedge funds and tech stocks: the allure of private investments [Institutional Investor]

Dalio: risk parity strategies not to blame for the market volatility [Reuters]

Risk parity: the dog that did not bite [AQR]

Inside family offices for hedge fund bosses [Bloomberg]

Latest crop of hedge fund startups brings a difference [PIonline]

14 characteristics that make an outstanding hf manager [Business Insider]

Pension funds to shift hedge fund allocations to low volatility strategies [PIonline]

Harvard's fund is looking for short-sellers [CNBC]

Cliff Asness: paying a fair fee for the risk taken [ii alpha]

Former Baupost managing director plans hedge fund [Bloomberg]

Why some hedge funds can't wait for rates to rise [WSJ]

Getting my ass handed to me by the world's largest hedge fund [Medium]

Would Seth Klarman buy his own book? [ai-cio]

Wednesday, September 23, 2015

Asia Value Investor Conference 2015 - Discount For Our Readers

Asia Value Investor Conference - 8th December 2015

$300 discount code: MARKETFOLLY-AVIC

The organizers of the successful London Value Investor Conference will also now be holding the inaugural Asia Value Investor Conference on 8th December 2015 at the Four Seasons Hotel in Hong Kong. 

Speakers include Charles Brandes, Hassan Elmasry, Voon San Lai, Jie Gong, David Shapiro, Simon Denison-Smith and Mr. YEO Seng Cheong.  Tickets are now on sale and the remaining speaker slots will be filled in the next few weeks.

Market Folly readers will get a $300 discount to the conference by using the discount code MARKETVOLLY-AVIC when booking.

The speakers will provide valuable insights into the methods and approaches that have made them successful, comment on the current investment climate and offer specific investment ideas.

There is an overview video of the upcoming conference, which also summarizes the recent London Value Investor Conference below:

$300 discount code: MARKETFOLLY-AVIC
Act fast, the discount expires 30th September! 

What We're Reading ~ 9/23/15

More Than You Know: Finding financial wisdom in unconventional places [Mauboussin]

Fundamentals are only half the story [Reformed Broker]

Masters in business interview with Jason Zweig [The Big Picture]

Full transcript: interview with Chinese President Xi Jinping [WSJ]

Ukraine & Europe: what should be done? [George Soros]

How cable can capture the mobile internet [WSJ]

Steve Wynn plays the China card [Barrons]

Highlighting large price increases on certain drugs [NYTimes]

Notes from Mohnish Pabrai's annual meeting [Frenzel Herzing]

The rent crisis is about to get a lot worse [Bloomberg]

The pace in Mexico's fight against corruption is slowing [FT]

A potential disruptor in the lab testing industry [Inc]

A look at how the Berkshire/Precision Castparts deal came together [Biz Journals]

Apple's iPhone upgrade plan is a gamechanger [Recode]

On the brink of a revolution in smart digital assistants [Wired]

Tuesday, September 22, 2015

The Big Short ~ Movie Trailer (Based on Michael Lewis' Book)

Michael Lewis' popular book, The Big Short, has now made it to the big screen.  The first trailer of the movie has been released that brings the story of the financial crisis and the US housing short to life.

Here's the cast:

- Christian Bale as Michael Burry
- Steve Carrell as Steve Eisman
- Ryan Gosling as Greg Lippmann
- Brad Pitt as Ben Hockett

The movie will be released around Christmas this year.  Embedded below is the video of the movie trailer:

While you wait for it to be released, definitely check out Michael Lewis' book The Big Short if you haven't already.  It's based on a true story and is a fantastic read.

Marcato Capital Starts LPL Financial Stake

Mick McGuire's activist hedge fund Marcato Capital has filed a 13D with the SEC regarding shares of LPL Financial (LPLA).  Per the filing, Marcato now owns 6.3% of the company with over 6 million shares.

This is a newly disclosed position for the firm as they did not own any shares at the end of the second quarter.  The filing was made due to activity on September 21st.

McGuire's firm was out buying shares in late August and throughout September at prices between $39.10 and $42.94.  Shares currently trade around $42.50.

The 13D contains the typical activist boilerplate that they may engage management, etc.

We've covered other previous portfolio activity from Marcato here.

Per Google Finance, LPL Financial is "an independent broker-dealer, a custodian for registered investment advisors (RIAs) and an independent consultant to retirement plans. The Company provides a platform of brokerage and investment advisory services to independent financial advisors, including financial advisors at around 700 financial institutions, enabling them to provide their retail investors with objective financial advice. It also supports approximately 4,400 financial advisors who are affiliated and licensed with insurance companies through customized clearing services, advisory platforms, and technology solutions. It provides its advisors with the front-office, middle-office, and back-office support. The Company provides its technology and service to advisors through a technology platform that is server-based and Web-accessible. Its subsidiaries include LPL Financial LLC, The Private Trust Company, N.A., Independent Advisers Group Corporation and LPL Insurance Associates, Inc."

Warren Buffett Increases Phillips 66 Position Again

Warren Buffett's Berkshire Hathaway has filed a Form 4 with the SEC regarding its position in Phillips 66 (PSX).  Per the filing, Berkshire has acquired over 3.5 million more shares.

After the purchases, Buffett now owns over 61.48 million shares of PSX.  Buffett was out buying at prices around $77-82 on September 4th, 8th, and 8th.

This is the second time Berkshire has added to its PSX position recently.

Per Google Finance, Phillips 66 is "an energy manufacturing and logistics company with midstream, chemicals, refining and marketing and specialties businesses. The Company operates its business through four segments: midstream, chemicals, refining and marketing and specialties. It gathers, processes, transports and markets natural gas, and transports, fractionates and markets natural gas liquids (NGL) in the United States. The Chemical segment manufactures and markets petrochemicals and plastics. The Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem). The refining segment buys, sells and refines crude oil and other feedstocks into petroleum products (such as gasolines, distillates and aviation fuels) at 14 refineries, mainly in the United States and Europe. The Marketing and Specialties segment purchases for resale and markets refined petroleum products (such as gasolines, distillates and aviation fuels), mainly in the United States and Europe."

For more from the Oracle of Omaha, we also posted a summary of Buffett's recent media appearances.

Monday, September 21, 2015

Goldentree's Steve Tananbaum on Wall Street Week

Anthony Scaramucci's rebooted version of Wall Street Week recently interviewed Steve Tananbaum of Goldentree Asset Management.

Goldentree manages $24 billion and has a bottom up value process focused on the credit markets.

Tananbaum commented on the recent market volatility, noting that investors all have differing views on what we should be concerned about: the Federal Reserve tightening, China issues, potential instability in Europe, etc.  He says that's what the market is struggling to prioritize.

He also notes that the bond market isn't as concerned with the direction of earnings.

As far as sectors go, Tananbaum said he thinks the media sell-off has been overdone, and singled out Time Warner (TWX) and Tribune Media (TRCO).

Embedded below is the video of Tananbaum's appearance on Wall Street Week:

If you missed it, be sure to also check out Eminence Capital's Ricky Sandler on Wall Street Week as well as Mario Gabelli's interview.

Carl Icahn Boosts Stakes in Cheniere Energy, Freeport McMoRan

Activist investor Carl Icahn has recently filed two amended 13D's with the SEC regarding his positions.

Boosts Cheniere Energy Stake

First, Icahn has disclosed a 9.59% stake in Cheniere Energy (LNG) with over 22.68 million shares.  This is an increase from the 19.35 million shares Icahn had exposure to when he first disclosed his position.

The new filing was made due to activity on September 14th, though he was also out buying on September 9th-11th at prices between $52.81 and $54.75.

Per Google Finance, Cheniere Energy is "an energy company engaged in Liquefied natural gas (LNG) businesses. The Company operates through two segments: LNG terminal business, and LNG and natural gas marketing business The Company owns and operates the Sabine Pass LNG terminal in Louisiana through its ownership interest in and management agreements with Cheniere Energy Partners, L.P. (Cheniere Partners), which is a publicly traded limited partnership. The Company owns 100% of the general partner interest in Cheniere Partners and 80.1% of Cheniere Energy Partners LP Holdings, LLC (Cheniere Holdings), which is a publicly traded limited liability company that owns a 55.9% limited partner interest in Cheniere Partners. The Company is engaged in the development of two LNG terminal projects: the Sabine Pass LNG terminal in western Cameron Parish, Louisiana, and the Corpus Christi LNG terminal near Corpus Christi, Texas."

Increases Freeport McMoRan Position

Second, Icahn has also just revealed an increased position in Freeport McMoRan (FCX).  Per the 13D, he now owns 8.8% of the company with 100 million shares (via exposure from forward contracts).  You can view all the fine print about his exposure here.

The filing was made due to activity on September 18th and is an increase from the 88 million shares he previously had exposure to.  Icahn initially revealed a new FCX stake in late August.

Per Google Finance, Freeport McMoRan is "a natural resource company with an industry portfolio of mineral assets, oil and natural gas resources, and a production profile. FCX has organized its operations into six primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining, Molybdenum mines, and United States oil and gas operations. The Company’s portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa, and oil and natural gas assets in North America. The Company is also engaged in operating copper conversion facilities located in North America, and a refinery, three rod mills and a specialty copper products facility. The Company’s Atlantic Copper smelts and refines copper concentrates and markets refined copper and precious metals in slimes."

Market Strategist Jeff Saut: "We're Trying to Stay Constructive, But Negative Evidence Mounting"

It's been a while since we checked in with market strategist Jeff Saut.  This week, his commentary is called "Go Opposite to Hysteria" referencing a quote from Jim Rogers in the excellent Market Wizards book.

Saut takes a look at the technicals given all of the volatility as of late.  He concludes:

"If you want to put a positive spin on things, the six other times the stock market declined by 10% in four days, like it did in August, every time the market rose within a year.  If you want to put a negative spin on things, there was a Dow Theory 'sell signal' last month.  We are trying to stay constructive, but the negative evidence is mounting;"

Embedded below is Jeff Saut's latest investment strategy:

You can download a .pdf copy here.