What We're Reading ~ 4/27/16

Second level thinking: what smart people use to outperform [Farnam Street]

Consumption in China is resilient, despite troubled economy [Economist]

What if China already had a hard landing? [FT Alphaville]

Baidu - a hidden gem [Variant Views]

A look at Expeditors International [Rational Walk]

The curious case of Hercules Offshore [Oozing Alpha]

A subprime boom, insane interest rates, predatory lending: sound familiar? [Motherjones]

Luck meets perseverance: the creation of IBM's competitive advantage [Farnam Street]

A look at India's e-commerce market through Flipkart [Founding Fuel]

The extinction invention [MIT Technology Review]

Learning Larry Page's Alphabet [Fast Company]

The case for investing in Latin America [Bloomberg]

The affordability crisis: what happens when millennials can't afford homes? [Apartment List]

More than 40% of student borrowers aren't making payments [WSJ]

47% of Americans can't come up with $400 in an emergency [The Atlantic]

Will driverless cars mean the end of auto insurance? [CSMonitor]

Inside the fall of SunEdison [WSJ]

Lessons from SunEdison's collapse [BaseHitInvesting]

Facebook wants to be the layer between you and the future [Buzzfeed]

Inside Apple's secretive iPhone factory [Bloomberg]

What We're Reading ~ 10/7/15

Superforecasting: The Art and Science of Prediction [Philip Tetlock & Dan Gardner]

Fat tails, thin ice [Jason Zweig]

Are you prepared for the next bear market? [Fortune]

Most CFOs think the US market is overvalued [Alpha Architect]

Putting a price tag on the Volkswagen scandal [Aswath Damodaran]

A pitch on beaten down Sun Edison [Bronte Capital]

Case study on capital allocation and Rockwood Holdings [Before Losing My Sanity]

Do as they do: a guide to insider activity [Dead Companies Walking]

A look at Cable One [Punch Card Blog]

Some stock picks from François Rochon [Montreal Gazette]

How the Bloomberg terminal made history and stays relevant [FastCompany]

Sneaker wars: inside the battle between Nike and Adidas [GQ]

The decline of 'big soda' [NYTimes]

China's middle class dreams in peril [WSJ]

Can Comscore/Rentrak go toe-to-toe with Nielsen? [Variety]

Google Fiber's real innovation [Beyond Devices]

Why we fall for bogus research [Bloomberg View]

Alcoa and the painful business of making aluminum [Reuters]

The frustrating life of a McDonald's franchisee [Bloomberg]

David Einhorn: Seeing Buying Opportunities Past Few Weeks

At the Robin Hood Investors Conference this week, Greenlight Capital's David Einhorn sat down with CNBC to talk markets.  He said he's seeing a lot of opportunities now and has bought "a bunch of things" the past couple of weeks.

Einhorn says he's not concerned with the day-to-day swings of the market as that's not his circle of competence.  He mentioned he hasn't been as long as some other people and has used the recent weakness to add to positions/establish new ones.

He continues to like Apple (AAPL), saying it trades at 10x next year's earnings net of cash.  The Greenlight founder also continues to be short AthenaHealth (ATHN).

Lastly, he likes SunEdison (SUNE) and thinks it can head to $32 per share (just under $19 now), arguing that it's a simple thesis but a complicated financial story since they own interests in various companies.


Embedded below are the videos of Einhorn's interview at Robin Hood:


Video 1




Video 2




Video 3




Video 4

Greenlight Capital Q2 Letter: Einhorn Reveals Lam Research Stake

David Einhorn's hedge fund Greenlight Capital was up 7.9% net in the second quarter and is up 6.4% for the year.  In their Q2 letter, Greenlight reveals a new position in Lam Research (LRCX).

They see the company as a beneficiary as the process of converting semiconductor designs into chips becomes harder to do.

Greenlight also bought a stake in Mallinckrodt (MNK) but reversed course and sold the stake due to their negative stance on Questcor (QCOR), a company MNK has agreed to purchase.  Greenlight thinks the combined company "is setting itself up to be a very attractive short sale candidate if the merger is completed."  The letter notes that Greenlight was short QCOR.

During the quarter, the hedge fund also sold out of its longs in Aspen Insurance (AHL) and Rite Aid (RAD) at nice gains.

At the end of Q2, Greenlight's largest positions (in alphabetical order) were: Apple (AAPL), gold, Marvell Technology (MRVL), Micron Technology (MU), Resona Holdings (TYO:8308) and SunEdison (SUNE).

Embedded below is Greenlight's Q2 letter with commentary on more of their positions:

Greenlight Capital's Q1 Letter: Sees Tech Bubble Forming

David Einhorn's hedge fund firm Greenlight Capital is out with is first quarter letter.  In it, they talk about how a potential bubble in tech is forming.  As such, they've shorted a basket of momentum names in small size in order to manage risk.

Other main takeaways from the letter include various new longs for Greenlight: Resona Holdings (Japan: 8308), SunEdison (SUNE), Altice (Netherlands:ATC), and Conn's (CONN).  The last long might be a surprise to some, as many hedge funds have been short the retailer that also deals in subprime lending. 

Greenlight also covered many unsuccessful shorts, including Chipotle (CMG), Fortescue Metals, Loblaw Companies, and Michael Kors (KORS).

At the end of Q1, their largest long positions were Alpha Bank, Apple, gold, Marvell Technology, Micron, and Oil States International.

Embedded below is Greenlight Capital's Q1 letter:




You can view other recent portfolio activity from Greenlight here.

Lee Cooperman Likes SunEdison & Sandridge, Sees Market as Fairly Valued

Lee Cooperman, founder of Omega Advisors, appeared on CNBC today to talk about some of his favorite positions and market thoughts.

He continues to feel the market is fairly valued, around 16x earnings.  He pointed out that bull markets end from excesses.  That said, he also notes that investors are "underinvested" in equities, mainly due to fallout from the beatdown they received in 2008 as they've been reticent to get back in stocks.  He thinks the S&P will trade in a range of 1,600 to 2,000.

Some of his favorite picks include SandRidge Energy (SD), Sprint (S), Monitise (MONI.L), Qualicorp.  A new name for them is Sunedison (SUNE), a solar energy play that's spinning off its money-losing semiconductor business.  Cooperman feels it can see $20.  He also thinks SD has the potential to double and points out that TPG-Axon has been involved in this one pushing for change.

Lee Cooperman Video 1:



Lee Cooperman Video 2:



We've highlighted some other portfolio activity from Cooperman here.