Friday, April 21, 2017

Soros Fund Boosts Sigma Designs Stake

George Soros' family office Soros Fund Management has filed a Form 4 and 13G with the SEC regarding shares of Sigma Designs (SIGM).  Per the filing, Soros now owns 10.66% of Sigma Designs with over 4.06 million shares.

The Form 4 indicates Soros was buying on April 12th and 13th at a weighted average price of $5.6371.  Their position size is now 2 million shares larger than what it was at the end of January per their previously filed 13G.

Per Google Finance, Sigma Designs is "a provider of global integrated semiconductor solutions. The Company offers media platforms for use in the home entertainment and home control markets. The Company sells its products into markets, including smart television, media connectivity, set-top box and Internet of Things (IoT) devices. The Company's media processor product line consists of a range of functionally similar platforms that are based on integrated chips, embedded software and hardware reference designs. The Company's media connectivity product line consists of wired home networking controller chipsets that are designed to provide connectivity solutions between various home entertainment products and incoming video streams. The Company's IoT devices product line consists of its wireless Z-Wave chips and modules. The Company is engaged in the license of its internally developed intellectual property. It also offers legacy products that are sold into prosumer and other industrial applications."

Tiger Global Adds To Apollo Stake Again

Chase Coleman's hedge fund firm Tiger Global has filed an amended 13G with the SEC regarding its stake in Apollo Global Management (APO).  They now own 15% of Apollo Global with over 28.1 million shares.

As we've detailed previously, Tiger has been boosting its APO stake.  This latest filing means they've increased their position size by an additional 3.1 million shares.  The filing was made due to activity on April 17th through 19th where they purchased shares at around $25.xx per a Form 4 submitted to the SEC.

Per Google Finance, Apollo Global Management is "an alternative investment manager in private equity, credit and real estate. The Company raises, invests and manages funds on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. The Company's segments include private equity, credit and real estate. The private equity segment invests in control equity and related debt instruments, convertible securities and distressed debt investments. The credit segment invests in non-control corporate and structured debt instruments, including performing, stressed and distressed investments across the capital structure. The real estate segment invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt, including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities."

Hedge Fund Links ~ 4/21/17

Paul Tudor Jones says US stocks should terrify Janet Yellen [Bloomberg]

ValueAct's Jeff Ubben giving some money back; feels market is overvalued [CNBC]

Passport Capital shuts down long/short hedge fund [Zero Hedge]

Former Harvard money whiz tries to regain his edge [WSJ]

Hedge fund investors are piling money into failing strategies [CNBC]

New report shows 40% of funds created last year were systematic [Benzinga]

Icahn's big bet against biofuel credits [Reuters]

The fall of Fortress [Institutional Investor]

Balyasny's tip to hedge funds at a crossroads [Bloomberg]

Thursday, April 20, 2017

Special Edition What We're Reading: Amazon (AMZN)

We're trying something new today: a linkfest focused on a single company.  This is mainly because we came across a ton of good reads related to (AMZN) recently and it was simply too many links to include in our regular "What We're Reading" post.  Here's the links:

The high speed trading behind your Amazon purchase [WSJ]

CEO Jeff Bezos' annual letter [SEC]

The Everything Store: Jeff Bezos and the Age of Amazon [Brad Stone]

Amazon and Walmart are in all-out price war [Recode]

Amazon's ambitions unboxed: stores for furniture, appliances and more [NYTimes]

Amazon wants Cheerios, Oreos and other brands to bypass Walmart [Bloomberg]

Jeff Bezos on how to start up a business [YouTube]

Amazon, the world's most remarkable firm, is just getting started [Economist]

Amazon said to mull Whole Foods bid before JANA Partners stepped in [Bloomberg]

CEO of the world's biggest ad company says Amazon keeps him up at night [Business Insider]

Wednesday, April 19, 2017

What We're Reading ~ 4/19/17

The Attention Merchants: The Epic Scramble To Get Inside Our Heads [Tim Wu]

Why we think we're better investors than we are [NYTimes]

Inside the hotel industry's plan to combat Airbnb [NYTimes]

Two law professors mimic activist hedge fund: a corporate raiding adventure [The Atlantic]

Vanguard is growing faster than everybody else combined [NYTimes]

Q&A with Blackrock's (BLK) Larry Fink [Bloomberg]

Why Facebook (FB) keeps beating every rival: it's the network of course [NYTimes]

A look at the first decade of augmented reality [Ben Evans]

Barry Ritholtz's rules of valuations [The Big Picture]

The making of a brand [Collaborative Fund]

Is American retail at a historic tipping point? [NYTimes]

E-commerce is a bear [Andy Dunn]

American Express, challenged by Chase, is losing the 'snob' war [NYTimes]

The potential of graphene to revolutionize the airline industry [Richard Branson]

A day in the life of a food vendor [NYTimes]

Howard Marks' Latest Memo: Lines in the Sand

Oaktree Capital's Chairman Howard Marks has just penned a new memo entitled, "Lines in the Sand."  In it, he addresses the use of subscription lines in private equity, real estate, distressed debt and other fields.

His piece asks investors to consider the implications of closed-end funds' increasing use of subscription lines.  He seems to conclude that subscription lines 'may be adding to risk at a variety of levels.'

Marks also notes,

"The key to financial security  –  individual or societal  – doesn’t lie in counting on things to work  in good times or on average.  Rather, it consists of figuring out what can go wrong in bad times,  and of only doing things that will prove survivable even if they materialize."

Embedded below is Howard Marks' new memo: Lines in the Sand

You can download a .pdf copy here.

For more from this investor, we also just posted Marks' recent presentation: The Truth About Investing.

Tuesday, April 18, 2017

Warren Buffett & Jorge Paulo Lemann Talk at Harvard Business School: Brazil Conference

Berkshire Hathaway's Warren Buffett and 3G Capital's Jorge Paulo Lemann sat down for a talk at Harvard Business School for the Brazil Conference 2017.  Here are some takeaways:

- Buffett considers it one of the larger mistakes in his life that he didn't team up with Lemann until later in his life

- Buffett: "Who you have as partners in life... it's a lot more fun and a lot more profitable to have good partners."

- Lemann met Buffett at the Gillette board and Buffett said he was very rich in the sense that he had tons of time and was able to do what he loves and that's what Lemann wanted after selling the bank.  Buffett: "The two things you can't buy are time and love."

- Buffett tells students to look for the job they'd still do if they didn't need to have a job.  Says to always hang out with people that are better than you.  You don't need a high IQ to succeed in life... find the place where your talents leave you happiest and produce the best results.

-  Lemann almost got expelled his first year at Harvard, went broke his first attempt at business, and he finally started getting going at age 30.

-  Buffett says Tom Murphy is his #1 example as a leader. Also cited Amazon's Jeff Bezos and then Jack Welch too.  Good leaders have big ideas.  "They don't settle cheap."

- Lemann on leadership: have focus, be efficient, have good people, keep costs down, take a bit of risk

-  3G likes to evaluate people in the system by giving them an opportunity to learn from mistakes; wants people that will try hard and do things exceptionally well.  "The only thing you cannot accept is somebody who is ethically not totally there."

-  Buffett asks himself: do they love the money or do they love the business?  (When he looks at leaders for his decentralized model at Berkshire)

-  "That's the one thing I've probably improved on over the years: judging the future behavior of people I encounter." - Buffett

-  "The first thing I want is a business I understand... where it'll be 10, 15, 20 years from now.  Understand if there's some economic castle with a moat, and whether the knight in the castle is any good." - Buffett

-  "The ideal moat is something that would be protected by any competition; usually earnings are regulated in businesses like that.  Perfect product is something that costs a penny and sells for a dollar and is habit forming." - Buffett

-  Lemann says they're "Running things for the long run and building them to last forever."

-  "In the food area, there's a lot to be done still... it'll probably be bigger than the beer area possibly ... We have to adjust, we have to be more nimble (to consumer taste)." - Lemann

-  "On SAB: the big attraction there is Africa... hot climate, young population, we have to learn how to operate, but the potential is there.  Africa maybe 30 years from now will be bigger than the US in beer consumption." - Lemann

-  On the current largest market cap companies being tech.  Lemann: "The better investments will be in technology.  But the problem is technology is very difficult to pick and things change very fast there."

Embedded below is the video of Jorge Paulo Lemann and Warren Buffett at the Brazil Conference 2017:

For more wisdom, we've also highlighted Warren Buffett's 2016 letter as well as Buffett's talk with Bill Gates.

Howard Marks: The Truth About Investing

Oaktree Capital's Chairman Howard Marks has put together a slideshow entitled The Truth About Investing which was posted by the CFA Society.  In it, he outlines the nuances of investing and also includes notable quotes from others.

Some highlights include:

"The price of a security  at a given point in time reflects  the consensus of investors  regarding its value.  The big gains arise when the consensus turns out to have  underestimated  reality.    To be able to take advantage of such divergences, you have  to think  in a way that departs from the consensus; you have to think  different and  better.   This goal can be described as “second - level thinking” or “variant perception.”


"Superior performance doesn’t come from being right, but from being more right  than the consensus.   You can be right about something and perform just average if  everyone else  is right, too.  Or you can be wrong and outperform if everyone else is  more wrong."

As well as:

"To be a successful investor, you have to have a philosophy  and process you believe  in and can stick  to, even under pressure.   Since no approach will allow you to profit  from all types of opportunities or in all environments, you have to be willing  to not  participate  in everything  that goes up, only the things that fit your approach. To be a  disciplined investor, you have to be able to stand by and watch as other people make  money in things you passed on."

Embedded below is Howard Marks' slideshow presentation: The Truth About Investing:

You can download a .pdf copy here.

For more from this investor, be sure to check out his book, The Most Important Thing, which is highly recommended if you found the above insightful.

We've also previously posted Howard Marks' latest memo: Expert Opinion.