Jim Chanos on His Tech Longs/Shorts, China & the Art of Short Selling: CNBC Interview

Kynikos Associates founder Jim Chanos was on CNBC today talking his short positions, China, and even some of his longs.  Here's the key takeaways from his talk:


Chanos' Technology Longs & Shorts

One of the main takeaways here is that he's long leading players in the mobile smartphone/tablet arena: Apple (AAPL) and Samsung (KRX:005930).  At the same time, he's short the slowly dying PC makers like Dell (DELL) and Hewlett Packard (HPQ).  While the trade hasn't been working well as of late, he still thinks the fundamentals will win out over time.  He thinks printers, ink and PCS all face secular declines.


On China

A few days ago, we posted up Jim Chanos' presentation on China from the Wine Country Conference.  On CNBC today, he talked about why he feels China's economic situation has actually gotten worse.  He points to the rapid credit expansion over there and sees a potential bubble. He likes to be short companies related to real estate and construction in China and also pointed out steelmakers and iron ore players.  Greenlight Capital's David Einhorn has also said to short iron ore.


On What He Looks For in Shorts

The Kynikos manager says that "timing is not my forte" and the ever-rising markets of today can be difficult for a short-seller.  He says, "It's problematic because it's more frustrating, but on the other hand you're given more opportunities."  He feels that ultimately, the fundamentals will win out because these rallies have also propped up the 'leaky boats'.  He also somewhat joked that they like to look at companies that put their names on sports team arenas.

Chanos looks for an edge in something that everyone's not focused on.  Two simple indicators he likes: wholesale executive departures and large amounts of insider selling from multiple individuals.  He says, "Those two indicators together are about as big of red flag as you can get."


Embedded below are the videos of Chanos' interview on CNBC:

Video 1 on China

Video 2 on tech stocks

Video 3 on natural gas and coal

Video 4 on what he looks for in short selling


For more from this hedge fund manager, head to Chanos' recent China presentation.

Kyle Bass on Europe & How He's Investing Now: Interview

Continuing coverage of hedge fund appearances from the Barefoot Economic Summit, we also wanted to highlight Kyle Bass' interview on CNBC.  The Hayman Capital founder touched on Europe and how he's positioning his portfolio.

Bass noted that global money printing has made it a difficult investing environment.And regarding Europe, he says that:  "You will still see the European dominoes fall, I don't think there's any way around it."

Bass then elaborated that:

"The world sits in a place where it hasn't ever been before.  It's the largest peace-time accumulation of debt in world history ... The reason it's so difficult for us to understand what the playbook looks like going forward: we've never been here before."


Bass Long RMBS

As to how you invest given this worldwide mess, Bass says: "in our portfolio we have more than half our portfolio invested in subprime and Alt-A bonds." 

He thinks housing is going to flatten out (not going up anytime in the near future, but not going down either).  He feels you still have to flush out the shadow inventory (which he argues is still high).

As to how else he's positioned his portfolio:

"In our portfolio, we actually own what we call event-driven situations in either credit or equity and the way that we hedge our kind of the corpus of our portfolio is - the Black Scholes model of options pricing dramatically misprices optionality at secular turning points.  So there is enormous convexity in various areas of the world and we can spend just a small amount of capital and have enormous convex positions.  And I believe all the convexity in the world is in Japan."


On Investing "Not To Lose Money"

If you're approaching investing with the mentality of simply not losing money, Bass argues you need to own producing assets, something that's "nailed down."  He cited apartments, oil wells, and gas wells as examples.

When prodded about gold, Bass said he simply views it as a surrogate currency and doesn't think the gold standard will return anytime soon.  He still thinks you should own it among all the other currencies, but he doesn't know what percentage allocation is appropriate.



Embedded below is the video of Bass' interview:



Earlier today we posted John Burbank's interview from the same summit where the Passport Capital founder said he was negative on the US economy.

John Burbank Says Go Long High Quality Stocks, Short Speculative Ones: Interview

Passport Capital founder John Burbank appeared on CNBC and gave his thoughts in an interview with David Faber from the Barefoot Economic Summit.  Burbank basically said that while he has a negative view on the economy, his trade is essentially to go long high quality stocks and short speculative companies.

Burbank believes there's essentially a 'lack of growth' not yet reflected in equity prices.  He doesn't think all parts of the US are in a recession yet, but we're "very close."  We've covered how Passport had been net short with their negative viewpoint.

He thinks that everyone buying dividend stocks and yield chasing has created a new dynamic.  Burbank said:

"My view is that after '08, all that government spending and central bank liquidity tried to push things back together and push everything up higher and for '09, 2010, and 2011, everything traded together.  Last year things started separating. 

You see the separation now and a recognition that we're not going to have the growth that we thought.  I call it the 'great separation.'  I think what's happening is that the really high quality, well managed, well governed dividend paying companies are going to be treated as an asset class that's priced off of these other available yield instruments.  While speculative companies, things that really need the economy to do well, things that aren't that well managed, that don't pay dividends etc, are going to stay poor.

I basically would be long high quality, leading companies which generally in the United States and then short speculative companies that rise into Fed announcements but then fall away."


Embedded below is the video from John Burbank's interview:



For more on this investor, we've also highlighted Passport's thesis on Saudi equities.

Bill Ackman on GGP, Procter & Gamble, and His Mystery Short: Interview

Pershing Square Capital Management founder Bill Ackman recently appeared on CNBC Squawk Box to talk about his positions in General Growth Properties (GGP), Procter & Gamble (PG) and dropped a hint about his newest short position.

General Growth Properties (GGP)

Ackman again talked about how Brookfield Asset Management (BAM) is trying to slowly takeover GGP without paying a premium.  Ackman is pushing for Simon Property Group (SPG) to buy GGP.  A background on the situation is provided in Ackman's letter to GGP.  And then an in-depth look at his proposal was posted in Bill Ackman's presentation from the Value Investing Congress if you missed it.

Procter & Gamble (PG)

Of his newest investment, Ackman says there's not a culture of efficiency.  He argues the company's fat and bloated.  The company has a solid board of directors and he's already met with them and will look to see what they can do about helping improve things.

Ackman's Newest Short

We highlighted at the Value Investing Congress how Ackman teased the crowd that he had a new short position but did not reveal it.  He gave a hint in this interview, saying: "it's a good for America short ... as soon as the company goes out of business, the country will be better off."


Embedded below is Bill Ackman's interview video:



For more from this investor, check out Bill Ackman's recommended reading list.

Ray Dalio In-Depth Interview on a Myriad of Topics

Bridgewater Associates founder Ray Dalio recently gave an hour-long interview at the Council on Foreign Relations where he touched on a myriad of macro, economic, and investing topics. 

It's rare to get such an in-depth look from one of the world's top investors, so instead of summarizing we highly recommend watching the whole interview with Dalio below:



Hat tip to PragCap for finding this.


We've posted tons of other great resources on Bridgewater below:

- Ray Dalio interviewed in the book The Alpha Masters

- Dalio on deleveragings

- Bridgewater the top hedge fund by net gains since inception

TPG-Axon's Dinakar Singh Likes Sirius XM & Time Warner Cable: Interview

Dinakar Singh, CEO of $4 billion TPG-Axon Capital recently sat down with Bloomberg TV so we wanted to post up some of the highlights of his rare appearance.

It seems as though he is betting against telecom stocks and is also bearish on some financials (in particular US regional banks).  He's bullish on names like Sirius XM (SIRI), Time Warner Cable (TWC), and W.R. Grace (GRA).  He sees growth in the chemical, aerospace, and healthcare industries.

A graphic on screen showed TPG-Axon's key long exposures in tech & media: SIRI, TWC, Viacom (VIA.B), Kabel Deutschland, Equinix (EQIX), Expedia (EXPE), Priceline.com (PCLN), and Yandex (YNDX).


On the current environment:   “For us, we pick stocks. That is how we make money. More and more, everyone has become more emotional in markets. We get scared by headlines and we all start acting the same way whether you are a CEO or a consumer. Jobs do matter. I think when you look at the U.S. in the last number of months, our view coming in this year is that people got too excited. There was a bounce back from last year and some good weather but it was going to be a slow gradual sloppy messy restructuring without a big recovery. Things have reversed. I think people are getting too pessimistic…I think ultimately consumers and CEOs are reading the same headlines and scared. I think you are seeing a cyclical or temporary step down. We do not think there one should expect a big bounce, but there won’t be much of a plunge either. It feels like the numbers are crummy but they will probably stay this way for a while. The fiscal cliff is a real issue. I think you're seeing an impact right now.”  


On how to play this market:   “People have gotten scared and they’re paying a lot for safety. On the safety side, people like dividends in safe industries. So Verizon is trading 18 times earnings because people want safety and a good dividend. There are companies like Time Warner Cable that we think are just as defensive but they did not happen to pay a dividend, they have even better cash flow, but they traded as a result much less well last year. For us, big opportunity. So media and cable that’s very cash flow rich and where we think management is going to turn that spigot on and turn it into a dividend or buy back machine that makes sense. Sirius, Time Warner Cable, companies like that. On the cyclical side, not everything is terrible. There are some sectors where we think there is good structural growth and balance sheets will be put to work. Some chemical companies are very good restructuring candidates. Aerospace suppliers.  Aerospace is in the middle innings of a very long term upgrade cycle.”


On telecom services:   “In a hedge fund, this is called a funding short. It is not that you think it is terrible and going straight to 0, but it is priced fully and not going up much so not a very good risk reward. Within telecom services there are two categories. There are the Verizons, we get it, they trade here for a reason, but they are pretty fully priced. On the other side, there are other companies that are legacy telecom companies where the dividend is a very high, but business really is eroding. It is priced well today because of a high dividend, but it is not sustainable. When you look around the world, a lot of high dividend stocks in Europe are not trading well because people are looking at them and saying I get it. I have a dividend today but it might not be there tomorrow.”


On China:   “If you look at China specifically, multiples had really collapsed…You have two general types of companies. Big, state-owned companies that people don’t trust and private companies that people really don’t trust. There isn’t a lot that trades at big multiples anymore. I think if you can find cases where there is real growth and they can pay cash back to you, you’ll make money.”


Embedded below is the first part of the interview of Dinakar Singh's interview with Bloomberg TV:



And here's the second part:

Howard Marks on His Current Favorite Idea & Investment Strategy

We've long posted commentary from Oaktree Capital's Howard Marks (see his recent letter here) due to the amount of wisdom he often shares.  Warren Buffett has even said Marks' letters are the first thing he reads when they come in.  So today we wanted to highlight a longer conversation with Marks on Bloomberg recently.


His Current Favorite Idea: "We think the current combination of good opportunities and good quantity of dealflow is in real estate and real estate related debt"  (both in the US and abroad, but but the US looks a bit better currently).

He thinks there's more of an aversion to real estate today than other areas.  Marks has bet on single family rental properties, believing that there will be a comeback in housing.  The key is to have patient capital, he says.  Numerous other prominent investors also liked this idea at this week's Delivering Alpha conference real estate panel.


On Investment Strategy:  "In order to get above average results, you have to think different and better.  It doesn't always work to do the opposite of what the herd is doing.  You have to know what they're doing, know why they're doing it, know what's wrong with it, and then do the opposite."

He says that everyone is looking at the macro and it's very hard to make calls like that.  He points to great investors like Warren Buffett not making macro calls and instead focusing on specific company fundamentals.


On Opportunities:  He says opportunities usually exist because the sellers are making a mistake (because they're forced to sell, or panicking or they get a margin call).  He penned his entire last memo on mistakes.


On Europe:  "It's a complex area, very murky, very uncertain."

Embedded below is the video of Marks' appearance on Bloomberg:



For more from the Oaktree manager, we've posted an excerpt from his book on contrarianism.

Avenue Capital's Marc Lasry: Huge Amount of Distressed Opportunities in Europe

Marc Lasry, co-founder of Avenue Capital appeared today on Bloomberg TV where he said he thinks there's a huge amount of distressed debt investing opportunities in Europe.  He also argued that Europe would not blow up.

His firm manages just under $13 billion and this is the second time we've seen him appear to talk about the opportunities in distressed debt.


Here are some select excerpts from his interview we found intriguing:

On investing in Europe:  "The great thing about Europe today is you've got a huge amount of supply and very little demand. So you're not really bumping into everybody. I think that’ll change over time."

Which is the better opportunity: US or Europe?  "I think in Europe today, you're getting overpaid for the risk. For us, we can buy senior debt in Europe for around 50 cents, 60 cents and here in the U.S. you're paying 70 cents or 80 cents for it. The question is, where do you want to be investing? A lot of it goes to, if you look at investing today, the risk-free rate is 20 basis points, so where are you getting paid to take the risk? For us to make 15% to 20%, we think we can do it in Europe a lot easier than here."

How Avenue's been investing:  "We have been investing the capital about 5% a month. The reason for that if we think over the next year or year and a half, there's a huge amount of opportunities and the question is, is the better time to invest three months ago or three months from now? Our view is to invest over time. And we think we'll just average in the prices."

Is Lasry worried about Europe short-term? "It matters but our long-term view is over the course of the next two or three years, everything is going to work itself out, and whether it's George Soros or it's somebody else, which you constantly keep hearing every week and every month that Europe has problems. We all know that. I think it'll work out. If you believe that and you invest, you'll do well."


Embedded below is Marc Lasry's full interview with Bloomberg TV:




For more on this investor, Marc Lasry is profiled/interviewed in the new book The Alpha Masters which is definitely worth reading.

George Soros Interview on the European Crisis

Well known investor George Soros yesterday spoke with Bloomberg TV about the European crisis.  He called for the continent to start a fund to buy bonds of Italy and Spain.  The investor said that, "There is a disagreement on the fiscal side.  Unless that is resolved in the next three days, then I am afraid the summit could turn out to be a fiasco.  That could actually be fatal."

Germany's Merkel today said that she's against Eurobonds.  Soros yesterday said that, "unfortunately, she has been leading Europe in the wrong direction."  Here are some other notable quotes from his interview:

Soros on the European Crisis

“Basically there is an interrelated problem of the banking system and the excessive risk premium on sovereign debt - they are Siamese twins, tied together and you have to tackle both. It's recognized that you have to do that and there is no widespread agreement on what to do on the banking side. It's the beginning of a banking union and there is a disagreement on the fiscal side and unless that is resolved in the next 3 days then I am afraid that the summit could turn out to be a fiasco, and that could be fatal, because you are facing the possibility of Greece leaving the euro and perhaps the European Union and you need to strengthen the remaining euro structure to withstand that shock.”


On What Europe Needs

“What you need is a European fiscal authority that will be composed of the finance ministers but would be in charge of the various rescue mechanisms, the European Stability Mechanism, and the one that preceded it and it would be empowered to issue treasury bills, to set up a debt reduction fund and actually buy up the excess stock of that that has accumulated in the hands of particularly Italy and Spain and finally combine issuing treasury bills. Those treasury bills would yield 1% or less and that would be the relief that those countries need in order to finance their debt.” 

“Euro bonds are not possible because Germany would not consider euro bonds until you have a political union, and I think it's actually quite justified, it should come at the end of the process not at the beginning. This would be a temporary measure, limited both in time and in size, and thereby it could be authorized according to the German constitution as long as the Bundestag approves it, so it could be legal under the German constitution and under the existing treaties. What it means is the political will by Germany to put it into effect and that would create a level playing field so that Italy and Spain could actually refinance its debt on reasonable terms.”


Embedded below is the video of George Soros' interview with Bloomberg TV:



For more from this investor's family office operations, we've posted up the latest portfolio activity from Soros Fund Management.

Apple CEO Tim Cook's Lengthy Interview at All Things Digital Conference

CEO of Apple (AAPL) Tim Cook recently gave a lengthy talk at All Things Digital's Conference.  We wanted to highlight this because AAPL is the top stock held by hedge funds.

Not to mention, this is the lengthiest interview we've seen with him publicly.  We've embedded the video below, but for those who might not have an hour and forty minutes to sit and watch, we've highlighted the key takeaways:

On Innovation

Right from the start of the interview, Cook focused on how Apple always has been and will continue to be about innovation.  He says the products he's seen (but obviously can't talk about) that they're working on are phenomenal.

With the late Steve Jobs' passing, many investors questioned where the innovation would come from and we asked similar questions in our post on the Apple conundrum.  Cook says innovation is what the company will always be about.


On the Halo Effect

Cook himself pointed out the 'halo effect' that many analysts have recognized.  He said that when the iPod was released, it exposed Apple to customers in the developed world that didn't know about the company.  Those consumers then were exposed to Mac computers and many of them became customers there as well.

And when the iPhone came out, Cook says a similar phenomenon occurred, but this time more-so in the developing world: China, Middle East, Russia, and Latin America.

And now, he says they're in the first inning of the iPad because he thinks the tablet market can overtake the personal computer (PC).


On What Cook Learned From Jobs

Obviously, things at the company have changed since Tim Cook took over as CEO.  But of course Jobs taught Cook many things and he shared some of that wisdom at the conference. 

Of the things Jobs taught him, Cook said that focus is key, not only in running a company, but also in your personal life.  "You can only do so many things great... cast the rest aside."

Cook also revealed that when Jobs had a conversation with him about becoming CEO, he emphasized that he didn't want people to sit around and wonder "What would Steve do?" after he was gone.  Instead, he only desired that things be done right.

On some of the key differences between AAPL under Jobs versus Cook, the current CEO says, "we did the right thing by doing dividends and share buybacks."  But there will also be similarities as they'll continue to invest heavily in research and development.


Chinese Manufacturing

Cook also touched on how it makes sense for Apple to outsource certain aspects of their operation where they think others can do the same or better.  One area in particular is manufacturing as they've let others handle this while they focus their time on doing what they do best: creating and innovating.

And while the company outsources manufacturing, Apple still focuses on running the supply chain and the managing the operational aspects of the company.


On the TV Market

"This is an area of intense interest for us ... We're gonna keep pulling the string and see where it takes us."  

Cook kept talking about the current iteration of the Apple TV (set top box) and Walt Mossberg prodded for more information and wondered if they would make an actual television set instead.

Cook said that they key to any new product is figuring out what the key components are and how they could control them.  They want to make products where they can improve upon something and give people something that they would want.

Cook of course did not comment on what they specifically were doing in the television space aside from pointing to their current product and saying the area is very interesting to them.


On Potential Acquisitions

Instead of focusing on revenue streams of potential acquisitions, Cook says they like to focus on great people, great products and intellectual property instead.  He said they currently aren't looking at any big acquisitions, but he wouldn't rule them out.  They did not look at Instagram (Facebook purchased them).


Embedded below is Tim Cook's appearance at the All Things Digital Conference:




For hedge fund resources on Apple:

- Dan Loeb's investment thesis on Apple

- David Einhorn refutes bear concerns on AAPL

- Goldman Sachs VIP list of most important stocks to hedge funds

- The Apple Conundrum: when to sell?

Howard Marks on Oaktree's IPO

Oaktree Capital's Chairman and founder Howard Marks was recently on Bloomberg TV talking about his company's recent initial public offering (IPO).


On pricing an IPO and investing in general: "You can't ignore your environment when you take investment action." He mentions this because he had to reduce Oaktree's offering and it priced at the lower-end due to the rough market as of late.

His thoughts on the environment: "We're not at the bottom.  I don't think we're at the top. I don't detect frothy psychology.  I don't see peak valuations, if you look at things like P/E ratios on stocks or yield spreads on riskier bonds. I think we're on some middle ground."

On how he's approaching things now: "Our mantra is move forward... but with caution.  We do have a good level of caution, primarily because of the macro concerns."

We also highlighted how David Einhorn's Greenlight Capital disclosed a stake in Oaktree after it went public.

Embedded below is Marks' interview with Bloomberg TV:



Be sure to also check out an excerpt from his book we've posted up: Marks on contrarianism.

Charlie Munger on Investing, Gold, Berkshire & More: In Depth Interview

If you missed it last week, CNBC's Becky Quick interviewed Berkshire Hathaway's Charlie Munger about a myriad of topics including Berkshire's succession plan, his feelings on the future of the company, the economy, markets, and more.

On succession at Berkshire, he says that new portfolio managers Todd Combs and Ted Weschler show "enormous promise."  They've both been given more capital to allocate and he thinks they fit right in with the culture there.

On gold:  Quick mentioned David Einhorn's comments that in a normal environment, he would be long stocks, short bonds and short gold.  But because he doesn't trust the Fed, he has to be long gold.  Munger disagrees and clearly doesn't like gold.


On investing: "We always said that what we like best was owning a wonderful business outright and second best we liked good ideas in securities.  That has never changed."  Munger loves the portfolio of businesses Berkshire has assembled, but didn't really comment on any opportunities they're seeing now.

On when to buy:  "What we've always tried to do is to be just the opposite - when everybody is totally discouraged and thinks the world is going to hell, that's when we like to be buying." When asked if now is a good time to buy, Munger replied "it doesn't look as much so as it did in the bottom tape." 


Embedded below is the interview with Charlie Munger:



For more on Berkshire Hathaway and its legendary investors, head to notes from Warren Buffett's meeting with MBA students as well as a tour of Buffett's office.

Marc Lasry on Opportunities in Distressed Debt

Avenue Capital's chairman and founder Marc Lasry was on Bloomberg TV yesterday giving an interview where he talked about investing in European debt.  He also said investors should focus on the the world's largest economy, the US, rather than China.  He's been focused on homebuilders and on the energy side, mainly focusing on senior secured.

He talked about raising $3 billion for a special situations fund to invest in European debt.  He argues that you need a lockup with that money because these situations are going to take years to play out.  Here's the video:



The hedge fund manager also touched on his distressed focus, noting that while others might think he's taking on a lot of risk, he doesn't believe so since he often deals with senior secured debt.

He mentioned how he learned a lot from David Bonderman.  One of the best lessons he learned is: "there's a difference between what the perception is and what the actuality is."

He also talked about his love for poker as he regularly hosts games.  Lasry says there's many similarities between investing and poker as the card game is very mathematical.  In the past, we've highlighted the high amount of hedge fund managers that play poker. 

Embedded below is the other video of Lasry's interview:



For more on his investment niche, head to comments from a hedge fund distressed panel.

Bill Ackman on Burger King and Barnes & Noble

The founder of hedge fund Pershing Square, Bill Ackman, guest hosted CNBC's Squawk Box yesterday morning and we wanted to highlight his comments for those who might have missed them.  His first segment talked about Barnes & Noble (due to the Microsoft investment news) as well as his position in Burger King.

On Barnes & Noble: He joked that he gives them credit for "existing."  Obviously, the brick and mortar business has come under fire given the proliferation of e-books.  Ackman thinks Microsoft's deal with BKS is a good deal.  We previously highlighted JANA Partners' stake in BKS.


On Burger King:  Ackman loves the new management team and says it's a great business.  They talked about how 3G Capital bought out Burger King just eighteen months ago and have already put in place a turnaround plan that they'll continue to pursue as they'll retain a large stake in the company.

Ackman says there's a lot of upside in the company as they've overhauled the menu and addressed quality.  He invested in Burger King essentially by owning a specialty purpose acquisition company (SPAC) a.k.a. a blank check company.  He and his partners have used it as a vehicle to take Burger King public so that management doesn't have to worry about an initial public offering (IPO).

We've of course previously posted Ackman's presentation on Burger King if you want to see the full investment thesis.

Embedded below is the clip from Ackman's interview:



Be sure to also view more from his appearance, including:

Bill Ackman on Canadian Pacific (his activist investment) as well as his talk on running a better railroad.  He also sat down and talked about his Hong Kong Dollar trade (a trade some people probably forgot he had on).

RenTec's Jim Simons on Mathematics, Common Sense, Good Luck & His Career

Jim Simons is the legendary founder of quantitative hedge fund Renaissance Technologies, commonly referred to as RenTec. The mathematician graduated from the Massachusetts Institute of Technology (MIT), and took what he learned and applied it to financial markets.

At age 38 he founded RenTec and he's been wildly successful (just see his Medallion Fund returns here). Simons retired from RenTec in 2009, but the firm full of scientists lives on.

Simons gave a lecture at MIT in 2010 about mathematics, common sense, good luck, and his various careers. Given that he rarely gives interviews, this lecture is well worth a view.

Embedded below is the full video of Jim Simons' lecture (email readers click to come read). He begins at the 10-minute mark and talks investment management at the 28-minute mark:

You can also view another rare interview with Jim Simons here.

What Hugh Hendry of Eclectica Asset Management Has Been Buying

Barron's has a great interview with Hugh Hendry of Eclectica Asset Management. His flagship fund returned 12% last year mainly by investing in the short end of interest rate curves and he now manages $700 million.

On what Hendry owns currently:

"In the next 12 months, we'll see further pathological swings in investor sentiment. Despite my reservations, I'm modestly long equity-market futures, some nonindustrial commodities, and some bullish fixed-income positions. We are very bullish agricultural commodities and agricultural equities, and hold a global basket of businesses—with interests ranging from fertilizer to farm equipment."

His hedge fund has established a bearish Japanese bet by buying protection on steel names and businesses sensitive to the yen. He's also bought credit protection on the shipping industry in Japan such as Mitsui OSK (TYO:9104).

Additionally, Hendry mentioned he's got protection on companies levered to the global economy such as Sumitomo (TYO:8053) and Marubeni (TYO:8002).

To see what else he's been up to, be sure to check out the rest of Hendry's interview at Barron's.

And for more on this hedgie, be sure to read Hendry's past views on hyperdeflation; something he's still talking about these days.

Bill Ackman on the Fast Food Industry, Booksellers, Retail, and Economy

Pershing Square Capital founder Bill Ackman appeared on CNBC and gave his thoughts on a myriad of topics including McDonald's (MCD), Amazon.com (AMZN), Borders (BGPIQ), and the economy.


On the Fast Food Business

Ackman says that he likes the fast food business after talking about McDonald's (MCD) same store sales. He's been a big shareholder in the industry in the past, owning both Wendy's (WEN) and MCD though he doesn't own any stakes now.

He likes businesses where you can charge a royalty on other people's sales (i.e. MCD collects 4% of the gross revenues of 33,000 stores and another 8-9% in rent).

On Booksellers

The hedge fund manager also commented on what he calls his "worst investment ever": Borders. He highlights the obvious how Amazon.com (AMZN) has taken so much share from brick and mortar bookstores. He thinks it's important for there to be competition for AMZN.

On J.C. Penney

Ackman is on the board of J.C. Penney (JCP) and commented how the company has rolled out a new brand, new pricing strategy, and new store layout as new CEO Ron Johnson (formerly of Apple) puts his 5 year plan into effect. Ackman said that he will be very patient with this investment as it takes time for the turnaround to take hold.

On the Economy

His differentiated view is that "there's a decent chance we massively outperform expectations."

He likes that the effective cost for owning a home is the lowest ever (due to housing prices and interest rates being so low). Ackman attributes the one reason that more people haven't bought homes to the fact that they're afraid of losing their jobs. So employment levels stabilizing would obviously help there.

Ackman also agreed with Warren Buffett's recent comments that buying homes and renting them out, despite being "cumbersome," could be a good play if you have the time and money. He argues you could achieve 9-11% yields in some markets by doing so.

On Lowe's (LOW)

He mentioned he owned Lowe's (LOW) in the past as a potential housing recovery play but sold it as shares rapidly appreciated. He used the cash from this passive investment to buy shares in his activist investment in Canadian Pacific (see Pershing's presentation on CP).

Embedded below is the video of Bill Ackman's interview (email readers click to come view it):



You can view Bill Ackman's portfolio in the brand new issue of our Hedge Fund Wisdom newsletter.

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.

Bridgewater's Ray Dalio Interview With Charlie Rose

Late last year Ray Dalio, the founder of hedge fund behemoth Bridgewater Associates, sat down for his first interview with Charlie Rose. He talked about Bridgewater's culture, investment process, and more.

Embedded below is Ray Dalio's interview with Charlie Rose for those who may have missed it (email readers click the link to watch):



We've posted up other resources from Bridgewater such as Ray Dalio's principles.

Bridgewater's Ray Dalio on His Principles & Investment Outlook

Bridgewater Associates' founder Ray Dalio was at the Bloomberg Markets 50 Summit recently and gave his thoughts on an array of topics. Bridgewater topped the list of the top 10 biggest hedge funds in 2010 and now manages an estimated $122 billion as the biggest hedge fund in the world.

Through the end of August, Bridgewater was up an astonishing 25.3%. How did they generate such outperformance? Dalio takes a diversified approach to investing, saying that "you're playing the role of the casino rather than the gambler in the casino, that's how you're going to make money I believe"

Bridgewater's August gains were at least somewhat attributed to their long positions in gold, Treasury bonds, and the Swiss franc.

It's clear that Bridgewater has been "long safety" and as the global macro hedge fund examines all asset classes around the globe on a daily basis.

Dalio is pessimistic overall, especially on the Eurozone. However, he does think the US is better positioned than Europe. Dalio also believes the Federal Reserve is the key to any equity rally: "if the markets are going to rally, and things are going to be good, it is going to be the Fed that will come in to save us." QE3 anyone?


Embedded below is Dalio's video interview (email readers click the link to come to the site to watch):



And if you can't listen to audio at work, here's the full transcript of the interview embedded below:




Dalio sparsely appears in the media, so those of you looking for more insight from the zen master himself, head to a rare interview with Dalio from earlier this year.

We'll end with one of our favorite all-time quotes from Ray Dalio: "Alpha is zero sum. In order to earn more than the market return, you have to take money from somebody else."