What We're Reading ~ 5/3/17

The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail [Christensen]

Warren Buffett's money managers Combs and Weschler speak [Yahoo Finance]

The new moats [Greylock]

Staying competitive as the world changes [Collaborative Fund]

A look at Seritage Growth Properties [Barrons]

Profile of Fidelity's Will Danoff [FT]

How Trump's pick for top Antitrust cop may shape competition [NYTimes]

Big name food brands lose battle of the grocery aisle [WSJ]

Thoughts on retailer L Brands [Intrinsic Investing]

Is the lingerie market on the verge of another disruption? (possible NSFW image) [Business of Fashion]

Amazon strategy teardown: building new business pillars [CB Insights]

UnderArmour tripped up in its run to become the world's next sneaker giant [Qz]

CEO pay is out of control [Fortune]

Apple's China problem [Stratechery]

With $6.2 billion spectrum spree, DISH's Charlie Ergen buys himself options [Bloomberg]

Can Facebook fix its own worst bug? [NYTimes]

Dyson is the Apple of Appliances [NYTimes]

Elon Musk's 2017 TED talk interview [YouTube]

Kerrisdale Capital's Short Thesis on Dish Network: Calling Charlie's Bluff

Sahm Adrangi's hedge fund Kerrisdale Capital recently raised $100 million to short 1 stock.  That stock has been revealed as Dish Network (DISH).  They outlined their thesis in a presentation called "Calling Charlie's Bluff."

The title refers to DISH CEO Charlie Ergen, a noted poker player.  While most would think of Dish Network as simply that, a satellite television provider, Ergen has essentially bet the company on wireless spectrum by acquiring a ton of it with the view that there are multiple options to monetizing it.

Kerrisdale's argument is that the most likely buyers/partners for that spectrum (the major wireless carriers) don't really need as much of it these days and as such its value has decreased.  Combine this with DISH's core TV product that is in decline, and Kerrisdale thinks that DISH shares can trade between 58-80% lower.

Embedded below is Kerrisdale Capital's 31-page thesis on their short of Dish Network:



You can download a .pdf copy here.

What We're Reading ~ Analytical Links 8/7/14

The World's 99 Greatest Investors: The Secret of Success [Magnus Angenfelt]

Interview with Michael Mauboussin [Bloomberg]

On finding large gaps between price and value [Base Hit Investing]

In search of the world's best investment advice [AFR]

A look at Lancashire Holdings [WertArt Capital]

Is TJ Maxx the best retail store in the land? [Fortune]

Shoppers are fleeing physical stores for the web [WSJ]

Does Valeant's cost cutting go too far? [Pro Publica]

How AMC Networks could benefit from the urge to merge in TV [QZ]

Sprint drops bid to buy T-Mobile after regulatory resistance [Reuters]

Dish chairman says bid for T-Mobile possible now that Sprint backs off [Reuters]

What We're Reading ~ Analytical Links 11/6/13

Individual investor bullishness hits 6 year high [PragCap]

What to do in this market [Brooklyn Investor]

On a consistent and repeatable investment process [Research Puzzle]

Portfolios With Purpose: Stock picking for a cause [WSJ]

The 20 smartest things Jeff Bezos has ever said [Fool]

The bull case on Valeant Pharmaceuticals [Barrons]

Quick glance at Du Pont [Modern Graham]

A look at QEP Resources and Rick's Cabaret [HF Intelligence]

Springleaf Holdings and the re-emergence of subprime consumer lending [CFA]

Take-Two: A compelling value with 2 asymmetric options [First Adopter]

Disney and Dish wrangle not over broadcast fees, but the future of TV [NYTimes]

Can companies maintain their extraordinarily high margins? [WSJ]

Whitney Tilson's observations from his trip to China [Seeking Alpha]

On China's pollution problem [NYTimes]

Ajit Jain feeds Buffett's hunger [Insider Quarterly]

Why Twitter's IPO is a bigger deal than Facebook's [WSJ]

For new MBA's, tech more appealing than Wall Street [WSJ]

What We're Reading ~ Analytical Links 10/2/13

Why most investors/traders fail [Reformed Broker]

Red flags flying over Boulder Brands [Herb Greenberg]

The outlook for healthcare stocks [Morningstar]

Blackstone: we're in an epic credit bubble' [CNBC]

Satellite TV providers plan for survival as growth fades [BusinessWeek]

10 stealth economic trends that rule the world today [The Atlantic]

Grounded: Brazil has stalled [Economist]

Interview with Amazon's Jeff Bezos [CNBC]

Aubrey McClendon launches new gas company [CNBC]

How Mohnish Pabrai uses checklist investing [Forbes]

Why Wall Street loves houses again [The Atlantic]

Google unveils major overhaul of its search engine [USA Today]

As J.C. Penney flounders, lack of control evident [Dealbook]

Younger generations' approach to investing [NYTimes]

Lee Cooperman Says Market Fairly Valued, Talks Stocks He's Been Buying (Interview)

Lee Cooperman of hedge fund firm Omega Advisors made an appearance on CNBC today to talk about what he's been buying and what his portfolio looks like.

Cooperman thinks the market is fairly valued right now and that the "Fed will have to remain friendly." He thinks the rest of the year will be determined by which valuation camp wins out.

He thinks a radical change in Fed policy or a recession would cause a drop in the market, but he's not terribly worried about either of those scenarios.

At the same time, he points out how many investors have de-risked drastically and are underinvested.  He says, "what the wise man does in the beginning, the fool does in the end."


Stocks Cooperman Likes

Cooperman mentioned Thomas H Lee Credit (TCRD), a mezzanine lender that yields over 9% and he thinks the dividend goes higher.

We recently posted up excerpts from Omega's Q1 letter if you missed it where he talks about some of his other stock picks.

He likes to buy MLP's when they're trading below net asset value and especially if he can get a decent yield.  He thinks Linn Energy (LINE) has assets worth "in the area of 40."

Cooperman has also sued Tetragon Financial and he believes management should be barred from the industry due to 6 years of bad governance in his opinion and possibly unlawful acts.  He still thinks the stock is undervalued (he owns 14 million shares of it and he started buying in 2009 back during the financial crisis).  In sum, he feels it's solely a management problem.

The Omega Advisors man also talked about Sprint (S), saying he bought it at $2 and then again at $7 and likes that there were 2 interested parties in the company (Softbank and Dish Network), but it looks like.  He said he'll tender 80% of his position, but if it trades at the right price, he'll get back into that chunk of his position.

Cooperman has owned Dish (DISH) for six years and he said it's a mature business and he thinks it'd be worth more with Sprint than without it.  He likes management there.

The hedge fund manager noted that he's "very bottom-up" and some things Omega has been buying recently include Express Scripts (ESRX), Halliburton (HAL), Transocean (RIG), Qualcomm (QCOM), Motorola Solutions (MSI). Sandridge (SD), and Chimera (CIM).


Embedded below is the video of Cooperman's 18-minute interview:



For more on this manager, check out Lee Cooperman's thesis on Covidien (COV) and Sirius XM Radio (SIRI).

What We're Reading ~ Analytical Links 4/17/13

A new site aggregating conference call transcripts [ConferenceCallTranscripts.org]

Intel (INTC): Anatomy of a tech value trap [Reformed Broker]

Why equity long/short investing is not dead [HFIntelligence]

Sticking to a plan in the face of emotional volatility [Abnormal Returns]

Rare interview with Liberty Media's (LMCA) John Malone [CNBC]

Jeremy Grantham on how to play resource scarcity [Advisor.ca]

Aereo has TV networks circling the wagons [NYTimes]

The death of value investing [Business Insider]

Thermo Fisher (TMO) nears deal for Life Technologies (LIFE) [Reuters]

On Dish Network's (DISH) bid for Sprint Nextel (S) [Bloomberg]

Interview with Markel's (MKL) Tom Gayner [GuruFocus]

Diabetes in Mexico: eating themselves to death [The Economist]

Top 5 websites capturing larger share of real estate traffic [Inman]

As big investors emerge, Bitcoin gets ready for close-up [Dealbook]

Leon Cooperman on Bonds, Stocks, and Apple vs. Research in Motion

Leon Cooperman of hedge fund firm Omega Advisors yesterday sat down with Bloomberg Television to talk about the markets, his portfolio, and what he likes/dislikes at this juncture.

On Treasuries:

Cooperman said that, "I have great confidence the Fed is ultimately going to get their way. The Fed is trying to elevate asset prices, help consumption, help the economy and in two-three years time, we will be worrying about inflation and interest rates will be materially higher. An instrument that I have absolutely no interest in - the most widely traded instrument in the world - is US government bonds. I don’t think people understand how risky a US government bond is at 2% return."

On Equities:

After bashing government bonds, Cooperman also examined the potential of investing in high yield bonds but dismissed them as fully priced. So he turned to equities and said that, "the S&P, which is 13 ½ earnings, yields a bit over 2%, 10% below the historical multiple at a time when interest rates are below historical and you can find lots of cheap stocks out there that will yield more than bonds today that are good companies that will grow over time."

This is largely in line with what the hedgie has been preaching for sometime now. We've highlighted in the past his trademark phrase that equities are the best house in the financial asset neighborhood.

On Apple (AAPL) versus Research in Motion (RIMM):

The Omega Advisors founder thinks Apple (AAPL) is worth north of $600. On Research in Motion (RIMM), he notes that, "It's funny, it was really like a mass hysteria. We put about a half of one percent of our assets into RIM late last year on a theory that they had a revenue base that was being mispriced by the market. Which was 20% of what we had in Apple, we've owned Apple now for a long time, and we continue to own a big position, so we had five times more Apple investment than RIM."

He says they sold RIMM due to stop loss discipline, but he admits that it's still intriguing. David Einhorn's hedge fund Greenlight Capital recently bought shares of RIMM, as highlighted in this free excerpt from our newsletter.

Cooperman also mentioned that he likes gold, Qualcomm (QCOM), JPMorgan (JPM), Bank of America (BAC), Altisource Portfolio Solutions (ASPS), Unitedhealthcare (UNH), WellPoint (WLP), Boston Scientific (BSX), Echostar (SATS), and Dish Network (DISH).

Embedded below is the video from Cooperman's interview with Bloomberg TV:



For more from this hedgie, you can view Cooperman's presentation on risks to the equity outlook.