Holiday Gift Guide For Financial Professionals

It's time for our annual holiday gift guide for financial professionals.  We like to highlight relevant discounts, great books, and useful tools for clients, bosses, colleagues or even yourself.  Here are this year's picks:

Discounts on Publications

Hedge Fund Wisdom: 33% Discount - Our holiday sale runs through the end of the year.  Save 33% on MarketFolly's premium newsletter that analyzes hedge fund portfolios.

Wall Street Journal: 67% Discount - Save on a subscription to the market's top news source.

Barron's: 65% Discount - More savings on this widely-read investment idea publication.

2012 Hedge Fund Compensation Report - If you're looking to make a move in the industry or negotiate a raise, this is a great resource with tons of data points on salary (base & bonus), hours worked, vacation days & more.


Portable Electronics

Apple iPad Mini - The most popular tablet, now even more portable.  Help out all the hedge funds that own AAPL shares by boosting Apple's topline.

Google Nexus 7 - A tablet for Android lovers. 

Kindle Paperwhite - Great for reading finance books and even SEC filings.

Apple MacBook Air - Very portable laptop for travel.

Samsung Chromebook - Another portable laptop option.


Monitors / Trading Station

Dell LED 27 Inch IPS Monitor - Tons of screen real estate here

ASUS 24 Inch LED IPS Monitor - Includes a rebate; great for a multi-monitor setup

Dell UltraSharp 24 Inch LED Monitor - Another good option

Dual Monitor Desk Mount - For assembling your monitors 

Triple Monitor Desk Mount - Turn your desk into a trading station


Great Finance Books

The Art of Short Selling by Kathryn Staley - The most highly recommended book on shorting.

Hedge Fund Market Wizards By Jack Schwager - The latest version in this awesome series featuring new interviews with 15 top money managers including Ray Dalio, Joel Greenblatt & more.

Investment Psychology Explained by Martin Pring - On how to overcome emotional and psychological impediments that distort decision making.

The Alpha Masters by Maneet Ahuja - Profiles of and interviews with 9 top hedge fund managers including David Tepper, Dan Loeb, Marc Lasry & more.

The Behavior Gap by Carl Richards - Great book on how to rein in emotion when thinking about money and making decisions.

Quality of Earnings by Thornton O'Gove - Recommended by Bill Ackman, this book teaches you how to understand various financial information companies provide.


Movies & Documentaries

Margin Call (DVD) - Movie starring Kevin Spacey, Jeremy Irons and Demi Moore about an investment firm during the financial crisis (get the Blu-ray version here).

Too Big To Fail (DVD) - Paul Giamatti, Ed Asner, William Hurt and more fill this star-studded cast in a detailed account of the financial crisis of 2008 (and Blu-ray here).

Arbitrage (DVD) - Starring Richard Gere and Susan Sarandon, this film depicts a hedge fund manager trying to sell his empire before his fraud is exposed (and Blu-ray here).

Inside Job (DVD) - The Academy Award winner for Best Documentary. Directed by Charles Ferguson & narrated by Matt Damon. (and the Blu-ray version here)


Happy holidays everyone!

What We're Reading ~ 12/5/12

Notes from the the Bloomberg Hedge Fund Summit [Reformed Broker]

More coverage from the summit [ValueWalk]

Goldman Sachs top 10 market themes for 2013 [ZeroHedge]

The confusion between volatility and risk [Jack Schwager]

Einhorn ramps up net long exposure [Institutional Investor]

The bullish case for gold [Sober Look]

John Paulson said to blame bet against Europe for most of loss [Bloomberg]

Aggregation of talks from the UVA Investment Conference [Santangel's Review]

Pondering fixed income in 2013 [Economic Musings]

Interview with Warren Buffett & Carol Loomis [Charlie Rose]

Xerox may be the next big writedown disaster [TheHour]

Pershing Square investors to convert into permanent capital vehicle [Reuters]

Kleinheinz Capital & Corriente return client money [Bloomberg]

In-depth look at DoubleLine's Jeff Gundlach [Bloomberg]

A holiday book giveaway [Abnormal Returns]

Nominees for the 2012 Absolute Return hedge fund awards [HF Intelligence]

Lunch with Warren Buffett [New Yorker]

Gene Munster's Apple presentation at Ignition [Business Insider]

Broyhill's Presentation on Oaktree Capital Group: Solid as an OAK

Broyhill Asset Management recently released a slideshow presentation with their pitch on Oaktree Capital (OAK).  Entitled "Solid as an OAK," they believe it's an exceptional company trading at a significant discount to intrinsic value.

Oaktree is one of the most widely recognized credit managers in the industry and shares of the company went public earlier this year.  We've covered commentary from their Chairman Howard Marks numerous times as it's one of Warren Buffett's favorite reads.


Broyhill's Thesis on OAK

They feel OAK is:

- Run by superior management with high ownership interest
- Has favorable industry tailwinds
- Has a catalyst for realizing value

They see accelerating cash distributions in 2013 and 2014 as a catalyst for investors.

Other notable institutional owners of OAK shares as of the end of Q3 include David Einhorn's Greenlight Capital, Kingdon Capital, as well as Farallon Capital.


Embedded below is Broyhill's full presentation: Solid as an OAK:





For more on this stock, Brooklyn Investor has also published a series of research on it, highlighting OAK's stake in DoubleLine Capital.

Jeremy Grantham's Latest Commentary: On the Road to Zero Growth

It's been a while since we last checked in on GMO's Jeremy Grantham so today we wanted to highlight his Q3 2012 letter: "On the Road to Zero Growth."

In it, Grantham examines GDP growth rate, slowing population growth, productivity, and reduced capital spending.  He concludes that,

"With a little luck, U.S. GDP growth (even after an increasing squeeze from rising resource costs and environmental damage) should remain modestly positive, even out to 2030 and 2050, in the range of 1% at the high down to a few basis points at worst."

Grantham doesn't offer any investment advice given the scenario he laid out, arguing that it's a complicated set of short-term and intermediate-term consequences.  It sounds like he'll address that in his letter next time around.

Embedded below is Grantham's Q3 letter:



We've also highlighted some of Grantham's past commentary for those interested: betting against bull market irrationality.

Are These The Next Warren Buffetts? Wisdom From Klarman, Perry, Chanos & More

Fortune recently republished an article that originally appeared in the 1989 issue of Fortune magazine.  "Are These The New Warren Buffetts?" was written by Brett Duval Fromson and highlights investors from that period who were thought to be talented enough to match the investing acumen of Warren Buffett.  Twenty-plus years later, the article accurately pinpointed some amazing investors.

The article identified the following (at the time) young investors:

- Seeking Subtle Signs of Value: Seth Klarman (Baupost Group)
- The Bargain Hunter: Michael Price (MFP Investors)
- Turning Value Upside Down: Jim Chanos (Kynikos Associates)
- A Formula For Deals: Richard Perry (Perry Partners)
- Pairing Value With Arbitrage: Eddie Lampert (ESL Investors)
- A Freudian Grahamite: Randy Updyke
- The Passionate & The Skeptical: Glenn Greenberg & John Shapiro (Chieftain Capital)
- A Scientist on Wall Street: Thomas Sweeney (Fidelity)
- Mr. Preservation of Capital: John Constable (Constable Partners)
- Mr. & Mrs. Aggressive: Jim and Karen Cramer


Wisdom From The "Next Buffetts"

As you can see, the list highlights some gems.  However, the best part of the article is that each investor shared some rare nuggets of wisdom regarding their approach that we wanted to draw attention to:


Seth Klarman: "Klarman's exceptionally quick and subtle mind allows him to see value in many different guises.  With stocks high, he looks for 'market-insensitive opportunities.'  By that he means companies whose financial performance depends on bankruptcies, announced mergers, liquidations, restructurings, or spinoffs -- corporate events largely independent of the vagaries of the financial markets."  Klarman focuses on the downside, saying: "I focus on what could go wrong.  Before buying, we always ask ourselves, 'what would we pay to own this company forever.' "  For more from this great investor, we've posted up Seth Klarman's recommended reading list.


Michael Price: "I like cheap stocks.  I'm basically a guy who looks at a company's balance sheet and asks, 'what is the company worth? Give me a number.'  If the answer is, 'Substantially more than the price,' then I get interested."


Richard Perry: "His investment approach? E(V) = {P(UPx) + [(1-P) (DPx)]} / (1 + COF).  That simply means he values a deal by calculating the odds that it will go through, how long it will take, and what the investment is worth with and without the deal.  Why all the effort to quantify?  Says Perry: 'There are no lay-ups in the arbitrage business.  This helps us maintain clear, high standards for buying a deal.' "  For more thoughts on this strategy from well-known investors, we've also posted up John Paulson on the risk in risk arbitrage.


Jim Chanos: "Chanos is in truth a perverse kind of value investor.  Using the same techniques as the others, he looks for overvalued stocks.  He stays mainly in large-capitalization issues.  That way there is more liquidity and thus less chance of a short squeeze, which would force him to liquidated his position because he could no longer borrow shares from brokers."  For more on his approach, we've posted up Chanos on the psychology of short selling as well as Chanos on the power of negative thinking.


Eddie Lampert: "Arbitrage helps our value investing.  If we can earn 20% to 25% annualized returns in arbitrage, then for the long term we can buy only stocks that we think will earn comparable rates of return.  Conversely, if deal stocks get overpriced, we will begin investing in companies with good long-term prospects at low prices." 


Randy Updyke: "Investing is about survival.  I stay away from the herd.  I like to buy things for a lot less than I think they are worth.  But to me the psychology and mood of the market are more important than anything."


Thomas Sweeney: "People always panic.  If you study this phenomenon over time, you see that eight times out of ten you make money by buying into a panic."



Be sure to check out the full re-published version of the Fortune article, where you can see Chanos rocking a sweet mustache and other great vintage pictures.

The Arithmetic of Equities By Whitebox Advisors

Andrew Redleaf of Whitebox Advisors penned an interesting letter a few months ago entitled, "The Arithmetic of Equities."  In it, he points to the folly of Bill Gross' "death of equities" commentary and makes the case for stocks.

Redleaf asks a simple question: "Why do U.S. institutions hold less of their money in equities than they have for decades?"  Instead of summarizing, we'll leave you with the entire letter embedded below:



You can download a .pdf copy here.

Warren Buffett on Hedge Fund Managers and Going Long Versus Short

Berkshire Hathaway's Warren Buffett recently was interviewed by Andrew Ross Sorkin for Dealbook and he made some interesting comments about hedge funds, respected investors, and short selling that we wanted to flag:


Buffett on Hedge Fund Managers: "They're not as good as the old ones generally.  The field has gotten swamped, so there's so much money playing and people have been able to raise money by just saying 'hedge fund.  That was not the case earlier on; you really had to have some performance for some time before people would put money with you.  It's a marketing thing."

Julian Robertson echoed this sentiment when he also recently commented that hedge funds aren't doing as well as they used to because the competition is more hedge funds.   

Buffett mentioned a few hedge fund managers who were successful like Julian Robertson (Tiger Management), and he mentioned that he liked Seth Klarman (Baupost Group).  As we highlighted today, Klarman was named one of the 'next Warren Buffetts' way back in 1989 by Fortune.


On Short Selling: "Charlie and I have both talked about it. We probably had a hundred ideas of things that would be good short sales.  Probably 95 percent of them at least turned out to be, and I don't think we would have made a dime out of it if we had been engaged in the activity.  It's too difficult."


On Going Long: "The whole thing about 'longs' is, if you know you're right, you can just keep buying, and the lower it goes, the better you like it, and you can't do that with shorts."


On Running 'Too Much' Money: "... money starts getting self-defeating at a point, too."


Head over to Dealbook for the full interview with Buffett.

Dan Loeb's Third Point November Exposure Report

Dan Loeb's Third Point Offshore Fund is out with its latest exposure report for November.  They finished the month up 2.9% and sit up 17% year-to-date and manage $10 billion.


Exposure Levels

Loeb's firm reduced net long equity exposure by a noticeable amount.  They went from 44% net long in October down to 38% net long at the end of November.  Their largest sector exposure continues to be tech, media & telecom (primarily due to their large stake in Yahoo).

In credit, Third Point is 27.7% net long, a 1% increase from the month prior.


Third Point's Top Positions

1. Yahoo! (YHOO)
2. Greek Government Bonds
3. American International Group (AIG)
4. Gold
5. Murphy Oil (MUR)

Their top holdings as a group remain unchanged this month, though their GGB and AIG stakes flipped position ranks.


Top Winners & Losers

Third Point's top winners included Greek Government bonds, Yahoo, Delphi (DLPH), Aveta, and Ally Financial (multiple securities held).  Their top losers included AIG, Short A, Short B, Apple (AAPL), and Liberty Global (LBTYA).

Embedded below is Third Point's November exposure report:




Overall, not too many notable changes in Loeb's portfolio aside from the reduction in net long equity exposure.  Head to Third Point's Q3 letter for more color on their positions.

Bruce Berkowitz Interview at University of Miami

Fairholme Capital's Bruce Berkowitz recently sat down for a conversation with the "Executive in Residence" program at University of Miami's business school.  Here are some key takeaways and select quotes from him:

On the macro: "At Fairholme, we tend not to think too much about the macro picture... but it's clear: a recovery."

On his approach: "We buy that which is hated.  When it's hated, it's usually cheap.  We usually are too early, we suffer from premature accumulation ...  We want to make sure that when we invest in something, that there's a big margin of safety."

On why he focuses less on the income statement: "There are less ways to cheat on a balance sheet than on an income statement."

On a question he asks: "What's the worst thing that can happen, and can we still make money?" (assuming that bad thing happens)

On mistakes: "Why do so many people make the same mistake over and over again?  One of the reasons has to do with biology ... with how your brain is wired.  In the last couple of years, you've had to be more a psychologist than an accountant. That's where the behavioral finance issue comes in.  You get into all the issues how people can be their own worst enemy."

His last point is one of the most important as so many great investors have talked about setting aside emotion when managing money.  We've also highlighted Blue Ridge Capital's behavioral finance reading list which is recommended.

On permanent capital:  "That is the secret sauce: permanent capital.  That is essential.  I think that's the reason Buffett gave up his partnership.  You need it, because when push comes to shove, people run ... That's why we keep a lot of cash around."


Embedded below is the video of Berkowitz's full interview:



More resources on this investor: an additional interview with Berkowitz on portfolio concentration as well as Berkowitz's checklist for investing.

Conversation With Warren Buffett (Forbes 400 Summit)

Berkshire Hathaway's Warren Buffett recently sat down with Randall Lane for the Forbes 400 Summit on Philanthropy.  Since some value investors out there like to absorb every single thing he says, we've embedded the video of the interview below:



For more resources on the Oracle of Omaha, head to Warren Buffett's recommended reading list.

Howard Marks' Latest Letter: "A Fresh Start (Hopefully)"

Oaktree Capital's Chairman Howard Marks is out with his latest letter entitled, "A Fresh Start (Hopefully)."  This memo is more political focused given that the election just took place. 

His prior missive, On Uncertain Ground, is more investment focused and highlights his macro concerns for those who missed it.

Embedded below is Marks' latest memo:




You can download a .pdf copy here.

For more wisdom from this excellent investor, be sure to check out Marks' book: The Most Important Thing Illuminated.

Hedge Fund Short Positions in Ireland

Continuing our coverage of hedge fund short positions in Europe, next up is Ireland. European rules are forcing hedge funds to disclose information about the most carefully guarded part of their business activities: short positions. 

Since November 1st when the EU Regulation on short positions came into force, there has been a deluge of information from financial regulators in EU countries about short positions across all market sectors.  

Public disclosure is required for net short positions of shares that reach 0.5% of the issued share capital of the company concerned and again at each 0.1% increment above that.  Additionally, disclosure is required publicly when the position subsequently falls below 0.5%.  

At the end of 2011, Ireland lifted its 3 year ban on short selling of bank stocks which had begun at the heart of the financial crisis in September 2008. Unlike Spain and Italy, Ireland has not resorted to the implementation of short selling bans across all sectors of the stock market. 

Perhaps the most striking feature at the moment is how few short positions there are in the Irish market.  This could possibly be because institutions simply don't have short positions large enough the require disclosure.


Hedge Fund Short Positions in Ireland Revealed

Name of hedge fund / % of company's shares short / Name of company

Farallon Capital:  Short -1.18% Icon

FVP Master Fund: Short -0.55% CRH

BNP Paribas: Short -0.55% CRH


To see more hedge fund shorts, head to our other coverage:

 - Hedge fund short positions in the UK

- Hedge fund short positions in Germany

- Hedge fund short positions in France

- Hedge fund short positions in the Netherlands  

- Hedge fund short positions in Belgium

- Hedge fund short positions in Finland

- Hedge fund short positions in Sweden

- Hedge fund short positions in Denmark 

- Hedge fund short positions in Poland 

- Hedge fund short positions in Italy

Notes From the Boston Investment Conference 2012

The first Boston Investment Conference took place earlier this month and today we're posting up some notes from it.  The event benefited the Boston Children's Hospital and featured an impressive list of speakers, moderators, and host committee chairs.

Out of respect for the event organizers, these notes are a little bit different than what we typically post in that the pitches won't be linked to a particular investor.  So unfortunately, you'll have to play a bit of a guessing game here, but we figured something is better than nothing given the quality of the speakers.

List of Speakers/Moderators

Seth Klarman, Baupost Group
Jon Jacobson, Highfields Capital
Richard Perry, Perry Corporation
Will Danoff, Fidelity Contrafund
David Abrams, Abrams Capital Management
Jeffrey Vinik, Vinik Asset Management
Max Stone, D.E. Shaw & Co
Edward Shapiro, PAR Capital Management
Jane Mendillo, Harvard Management Company
Nancy Zimmerman, Bracebridge Capital
Michael Trotsky, MA Pension Reserves Investment Management
David Zervos, Jefferies
Andrew Perold, HighVista Strategies
Lawrence Summers, Harvard University
Eric Doppstadt, The Ford Foundation
Jay Light, Harvard Business School
Andrew Bary, Barron's


Ideas Pitched (Listed in Random Order)

Yahoo! (YHOO)
JAL Japan Airlines (TYO:9201)
Google (GOOG)
Global Eagle Acquisition Corp (EAGL)
Fannie and Freddie preferreds
News Corp (NWSA)
Canadian Natural Resources (CNQ)
JZ Capital Partners (LON:JZCP)


Notes From the Boston Investment Conference

Some of the above stocks were discussed only with one or two comments, but we've posted up notes from some of the detailed pitches below.  Again, unfortunately we can't attribute the ideas to a particular speaker:


Japan Airlines (JAL)

- $8.5b IPO out of bankruptcy, Japanese government sold entire stake (IPO'd around 3,800 Yen and is now around 3,750 Yen)

- Revenues for JAL are about 1/2 of Delta (1/2 of JAL's revenues are from domestic market)

- Changes during bankruptcy: reduced headcount by 35%, decreased salaries by 50%, canceled all debt, eliminated some service on underperforming routes, reduced capacity by 40%, reduced non-fuel expenses by 1/3rd

- Valuation: lowest multiple of any global airline.  JAL around 3.1 EV/EBITDAR, P/E around 6.5

- Headwinds: Orders for 45 Dreamliners.  JAL has already started its non-stop Boston to Japan flight.  Overall market liberalization - competitors can now coordinate on prices and schedules (get the benefits of a merger without having to deal with the operational headaches or merging 2 airlines).  High barriers to entry in the Japanese market: JAL is 37% of market and ANA is 47%, little room for new players

- Largest risk: entry of a low cost carrier into Japanese market: currently low penetration of LCC in Japan.  Not seen as a huge threat because LCCs are typically used for short flights and Japanese tend to take trains for short trips.  Also, there are limited slots for new airlines at the airport closest to the city.  If a LCC flew into the airport farther outside the city, the cost of a taxi or train into the city would negate taking a low cost flight to Japan.


Yahoo! (YHOO)

- Cheap when looking at balance sheet.  Market value of 35% of Yahoo Japan = $7.7, market value of stake in Alibaba = $8.1, preferred shares = $0.8 (these three tax-adjusted equal $11.6b), cash = $9.4, shares out = 1.2 for a value of $17.5 (you are paying close to nothing for $4.3b in revenue or $700m in free cashflow).

- Investor thought Marissa Meyer will be a very good CEO   

- MarketFolly note: Our newly released issue of Hedge Fund Wisdom last week highlighted that David Einhorn's Greenlight Capital and Chase Coleman's Tiger Global both started new positions in YHOO during the third quarter.  Also, recall that Dan Loeb's Third Point has been an activist investor in the name.    


Google (GOOG)

- Cheap stock - trading around where it was in 2007 and EPS has increased from $15 then to $40 now 

- MarketFolly addendum: We previously posted Eminence Capital's thesis on GOOG as well. 


This concludes notes from the Boston Investment Conference.  We've covered a ton of events recently, so be sure to also check out:

- Notes from Sohn London Investment Conference (Hohn, Chanos & more)

- Notes from Invest For Kids Chicago (Mandel, Peltz & more) 

- Notes from Great Investors' Best Ideas (Einhorn, Bass & more)
 

Hedge Fund Short Positions in Italy

Continuing our coverage of hedge fund short positions in Europe, next up is Italy. European rules are forcing hedge funds to disclose information about the most carefully guarded part of their business activities: short positions. 

Since November 1st when the EU Regulation on short positions came into force, there has been a deluge of information from financial regulators in EU countries about short positions across all market sectors.  

Public disclosure is required for net short positions of shares that reach 0.5% of the issued share capital of the company concerned and again at each 0.1% increment above that.  Additionally, disclosure is required publicly when the position subsequently falls below 0.5%.  

Italy has introduced a number of short selling bans in recent years but since September 2012 the short selling ban on covered shorts has been lifted. It’s interesting that even when a country like Italy has a track record of introducing short selling bans and when the possibility of another ban at some point in the future must be reasonably high, many hedge funds continue to establish short positions.


Hedge Fund Short Positions Revealed in Italy

Hedge Fund / % Of Shares They Are Short / Name of Company


AQR Capital: -1.1% Mediaset, -1% Finmeccanica SPA, -1.32% A2A

Bocage Capital: -0.53% Saras Raffinerie Sarde

Citadel Europe: - -0.86% Prysmian

Dalton Strategic Partnership: -0.88% Diasorin

Egerton Capital: -1.06% Banca Monte Dei Paschi Di Siena, -0.75% Mediaset

Marshall Wace: -0.69% Banca Monte Dei Paschi Di Siena, -0.62% Pirelli, -0.93% Mediaset

Odey Asset Management: -0.9% Tod's, -0.53% Banca Monte Dei Paschi Di Siena

Pelham Long Short Master Fund: -0.68% Fiat S

Children's Investment Fund: -1.43% Fiat

Tiger Global Management: -0.55% Arnoldo Mondadori Editore

Viking Global Investors: -0.91% Assicurazioni Generali

Wellington Management: -0.54% Banca Carige, -0.58% Banca Monte Dei Paschi Di Siena


As you can see above, there are two names that are seemingly consensus shorts among the funds listed: Mediaset and Banca Monte Dei Paschi Di Siena.  There are also a few funds short Fiat and we recently posted up thoughts from Children's Investment Fund manager Chris Hohn on his Fiat short.



To see more hedge fund shorts, head to our other coverage:

 - Hedge fund short positions in the UK

- Hedge fund short positions in Germany

- Hedge fund short positions in France

- Hedge fund short positions in the Netherlands  

- Hedge fund short positions in Belgium

- Hedge fund short positions in Finland

- Hedge fund short positions in Sweden

- Hedge fund short positions in Denmark 

- Hedge fund short positions in Poland

Lansdowne Partners Disclose Stake in Ocado Group: A Hedge To Their Sector Short?

Lansdowne Partners has disclosed a new long position in online grocery retailer, Ocado Group  (LON: OCDO).  Due to trading on November 11th, Lansdowne now hold the equivalent of 5.72% of  Ocado's voting rights.  

Lansdowne appear to be going against the crowd with this particular wager. The disclosed short interest in Ocado is high at -  17.29% of the company's float, including some managers with big reputations like Blue Ridge Capital and Kynikos Associates.  Here's a breakdown:

Short Positions in Ocado 

Ardevora Asset Management LLP  -0.33% of shares
BlackRock Investment Management (UK) Limited -2.52%
Blue Ridge Capital L.L.C -2.41%
Dalton Strategic Partnership LLP -1.34%
Ennismore Fund Management Limited -0.99%
GMT Capital Corp -2.52%
Kynikos Associates LP -4.35%
Newedge UK Financial Ltd -0.16%
Newedge UK Financial Ltd on behalf of Newedge Group -0.56%
Oxford Asset Management -0.55%
Parvus Asset Management (UK) LLP -0.89%
S.A.C. Capital Advisors, L.P - -0.67%

Total disclosed shorts  -17.29%

While upon cursory glance this appears to be a contrary bet by Lansdowne, examining their own book reveals that this could merely be a hedge to their other shorts in the sector.

Lansdowne has disclosed short positions in Tesco -0.62% and WM Morrison Supermarkets -2.51%.  The value of these short positions, though, is far higher than the Ocado long. Overall, it seems that  Lansdowne is bearish on the food retail sector.

For more hedge fund activity in the UK and other EU countries check out our new series of posts on short positions.

Per Google Finance - "Ocado Group plc is a United Kingdom-based holding company. The Company  is an online grocery retailer. The principal activity of the Company, along with its subsidiaries, is  retailing and distribution of grocery and consumer goods within the United Kingdom. The Company  owns Ocado Holdings Limited, which holds the entire interest in Ocado Limited. The principal  activity of Ocado Limited includes retailing and distribution of grocery and consumer goods. On  February 9, 2010, the Company acquired Ocado Limited. The Company's wholly owned subsidiaries  include Ocado Holdings Limited, which is an holding company; Ocado Limited, which is engaged  in retail and distribution; Ocado Information Technology Limited, which is engaged in intellectual  property, and Ocado Cell in Atlas Insurance PCC Limited, which is an insurance company. Ocado  Holdings Limited is a 100%-owned subsidiary of Ocado Group plc."

Marcato Capital Management Files 13D on DineEquity

Mick McGuire's hedge fund Marcato Capital Management just filed a 13D with the SEC regarding DineEquity (DIN).  Per the filing, they've revealed a 5.5% ownership stake in DIN with 1,021,486 shares.

This is not a new position for the fund as they owned 771,486 shares at the end of the third quarter.  As such, the amount of shares they own has increased by 32% over the past 2 months.  The majority of their purchases were made in late November at $62.52.

Marcato Capital Management initially disclosed its stake in DineEquity in the fourth quarter of 2011.  This latest 13D filing was required due to portfolio activity on November 27th.

Prior to founding his firm, McGuire worked at Bill Ackman's Pershing Square and so it should come as no surprise that he too is often involved in shareholder activism.  The 13D notes that McGuire has engaged DIN management and hopes to pursue discussions.

Per Google Finance, DineEquity "owns, operates and franchises two restaurant concepts in the casual dining and family dining categories of the restaurant industry: Applebee's Neighborhood Grill and Bar and International House of Pancakes (IHOP). The Company operates in four segments: franchise operations, company restaurant operations, rental operations and financing operations."

For more on this hedge fund, we posted up notes from McGuire's presentation at an investor conference where he talked about some of his other longs.

What We're Reading ~ 11/28/12

Tap Dancing to Work: Warren Buffett on Practically Everything [Carol Loomis]

Pieces of classic investment advice [Reformed Broker]

Luck, skill & the dangers of focusing on past performance [Abnormal Returns]

2013 stock market outlook: buying in a low risk environment [Chris Perruna]

10 new buys from ultimate stock pickers [Morningstar]

Interview with Bruce Berkowitz [Fortune]

Lessons from the sharks on pitching a fund [AllAboutAlpha]

Warren Buffett's latest op-ed [NYTimes]

Learning to love volatility [Nassim Taleb]

Clearing up myths of hedge funds [AllAboutAlpha]

Hedge funds face profit headache in 2013 [Reuters]

Recovering from 2011 shock proving difficult for hedge funds [SoberLook]

Insider inquiry inching closer to Steve Cohen [Dealbook]

A journalist's defense of Steve Cohen [The Guardian]

Hedge fund Libra Advisors to return investor money [WSJ]

Activist shareholder presses pursuit of Office Depot [PalmBeachPost]

Lone Pine Capital Reduces Esprit Stake

Steve Mandel's hedge fund firm Lone Pine Capital recently reduced its holdings in Hong Kong listed Esprit (HK:330). 

Lone Pine sold nil-paid rights in two transactions on November 7th and 9th.  In total, they sold 62,538,542 nil-paid rights at average prices of HK$3.10 and HK$3.50, with the bulk of the transaction taking place at the latter price, according to Hong Kong exchange disclosures. 

This reduces their ownership stake in Esprit down to 10.88% as they still have exposure to just under 211 million shares.  Lone Pine disposed of most of the rights shares they were allocated.  The company plans to use the proceeds of the recent rights issue to partially fund a facelift to compete with other retailers like Zara.

Also worth highlighting is the fact that around the same time, Esprit's former chairman Michael Ying added to his stake in the company. He now owns more than 10%.

Previously, we had highlighted how Lone Pine was buying Esprit back in June of this year.

For more of Lone Pine's recent activity, we've highlighted Steve Mandel's pitch on VeriSign.

Citadel Starts Zillow Stake

Ken Griffin's investment firm Citadel Investment Group just filed a 13G with the SEC regarding shares of Zillow (Z).  Per the filing, Citadel has revealed a 6.1% ownership stake in the company with 1,588,436 shares.

This is a brand new position for the firm and the disclosure was required due to portfolio activity on November 19th.  Shares of the real estate information site dropped recently after the company issued disappointing guidance.  Zillow recently announced it would be acquiring HotPads in an effort to broaden its reach in the housing rental space.

As of the end of the third quarter (September 30th), other top institutional holders of Z shares included JAT Capital, Miura Global, Glade Brook Capital, and more.

Per Google Finance, Zillow is "a real estate information marketplace. The Company provides information about homes, real estate listings and mortgages, through its Website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals. The Company’s database has more than 100 million United States homes, including homes for sale, homes for rent and homes not currently on the market. Individuals and businesses that use Zillow have updated information on more than 27 million homes and added more than 50 million home photos. These profiles include detailed information about homes, such as property facts, listing information and purchase and sale data."

For those interested, we've also recently posted up some of Citadel's short positions.

Balyasny Increases Walter Energy Position

Dmitry Balyasny's hedge fund firm Balyasny Asset Management recently filed a 13G with the SEC regarding shares of Walter Energy (WLT).  Per the filing, Balyasny has revealed a 5.36% ownership stake in WLT with shares.

This marks over a 71% increase in the amount of shares they own since the end of September.  The latest disclosure was required due to portfolio activity on November 15th.

Per Google Finance, Walter Energy is "a producer and exporter of metallurgical coal for the global steel industry and also produces steam coal, coal bed methane gas (natural gas), metallurgical coke and other related products. The Company operates in two segments: its United States Operations segment, and Canadian and United Kingdom Operations segment."