SPO Advisory Trims Resolute Energy Stake

John Scully's investment firm SPO Advisory has filed a 13G with the SEC regarding its position in Resolute Energy (REN).  Per the filing, SPO now owns 19.3% of the company with 14.99 million shares.

This is less than the 17.11 million shares they reported owning at the end of the second quarter.  The filing notes they sold 2 million shares on October 28th at prices between $0.47 and $0.4991.  Shares of REN are down over 59% over the past six months.

Per Google Finance, Resolute Energy Corporation "is an independent oil and gas company. The Company is engaged in the exploitation, development, exploration for and acquisition of oil and gas properties. The Company's asset base consists primarily of properties in Aneth Field located in the Paradox Basin in southeast Utah (the Aneth Field Properties or Aneth Field), the Permian Basin in Texas and southeast New Mexico (the Permian Properties or Permian Basin Properties), and the Powder River and Big Horn Basins in Wyoming (the Wyoming Properties). Approximately 86% of its estimated net proved reserves were oil and approximately 92% were oil and natural gas liquids (NGL). The Company has an interest in gas gathering and compression facilities located within and adjacent to its Aneth Field Properties. Collectively called the Aneth Gas Processing Plant, the facility consists of an active gas compression operation operated by it and a dismantled gas processing facility."

Trian Partners Boosts Pentair & Bank of New York Mellon Stakes

Nelson Peltz's activist investment firm Trian Fund Management has submitted two filings to the SEC recently.

First, per a Form 4 filed with the SEC, Trian Fund Management has increased its stake in Pentair (PNR).  Per the filing, Trian acquired 265,000 shares on October 22nd at weighted average prices of between $54.7093 and $56.2684.

After these buys, Trian now owns over 13.27 million shares of PNR.

Second, per another Form 4, Peltz's firm has purchased 285,000 shares of Bank of New York Mellon (BK) on October 21st at a weighted average price of $41.3396.  After these purchases, Trian now owns over 30.51 million shares of BK.

For more on this fund, we also posted up Trian's presentation on its new stake in General Electric.

Per Google Finance, Bank of New York Mellon is "a provider of financial products and services in domestic and international markets. Through its two principal businesses, Investment Management and Investment Services, it serves institutions, corporations and high net worth individuals. For institutions and corporations, it provides investment management, trust and custody, foreign exchange, fund administration, global collateral services, securities lending, depositary receipts, corporate trust, global payment/cash management, banking services and clearing services. For individuals, it provides mutual funds, separate accounts, wealth management and private banking services. BNY Mellon’s investment management businesses provide investment products in different asset classes and investment styles."

Per the company's website, Pentair is "a global water, fluid, thermal management, and equipment protection partner."

Kingstown Capital Files 13D on Aerojet Rocketdyne

Michael Blitzer's hedge fund firm Kingstown Capital has filed a 13D with the SEC regarding shares of Aerojet Rocketdyne (AJRD).  Per the filing, Kingstown now owns 5.5% of the company with 3.5 million shares.

This is up slightly from the 3.4 million shares they owned at the end of the second quarter.  The 13D filing contains the standard boilerplate that they purchased shares because they thought it was undervalued and they may talk to management from time to time.

We've posted previous portfolio activity from Kingstown here.

Per Google Finance, Aerojet Rocketdyne Holdings, Inc., formerly GenCorp, Inc., "is a manufacturer of aerospace and defense products and systems. The Company develops and manufactures propulsion systems for defense and space applications, and armaments for precision tactical and long-range weapon systems applications. It has two operating segments: Aerospace and Defense, and Real Estate. Its Aerospace and Defense segment includes the operations of its subsidiary Aerojet Rocketdyne, Inc., which is engaged in designing, developing and manufacturing aerospace and defense products and systems for the United States Government, including the United States Department of Defense (DoD), the National Aeronautics and Space Administration (NASA), aerospace and defense prime contractors, as well as portions of the commercial sector. Its real estate segment includes activities of its subsidiary Easton Development Company, LLC related to the re-zoning, entitlement, sale, and leasing of its excess real estate assets."

Broyhill's Research Notes on Time Warner (TWX)

Broyhill Asset Management about a month ago penned research notes on shares of Time Warner (TWX).  With all the talk of the content bundle coming apart, Broyhill sees downside risk around $65-70 per share, while TWX trades around $72 currently.

They take a look at the company's Turner division, Warner Brothers, HBO, and subscriber losses to outline the various risks in the investment.

They conclude that, "Putting it all together, we see $40B of value at Turner even assuming that accelerating subscriber losses result in significant earnings shortfalls and continued multiple compression. We see $20B of value at WB backed by attractive intellectual property and broader distribution driving pricing for content. At almost any reasonable multiple for HBO, we have a very difficult time justifying today’s $80B enterprise value of Time Warner even under very challenging assumptions."

Embedded below are Broyhill's research notes on Time Warner:

Point72's Doug Haynes on Wall Street Week

Point72 Asset Management's President Doug Haynes just appeared on Wall Street Week.  Point72, of course, is Steve Cohen's latest investment vehicle after he closed SAC Capital.  While SAC managed outside money, Point72 emerged as a family office to manage internal assets.

Point72's mission statement is threefold: to be the premier asset management firm (generate highest risk adjusted returns), have the highest ethical standards, and offer the best opportunities for the brightest talent.

Haynes said that the proliferation of hedge funds has really ratcheted up competitiveness in the market and has also increased crowding.  He mentioned they looked at the amount of alpha available and over the last 20 years it's down by half.  He notes, "The cost of being excellent in the industry keeps going up."

We previously linked to how Point72 has started an academy for analysts.

Haynes said that they like the healthcare sector and retail/consumer sectors now.  He notes they're looking at the innovation pieces of the economy.

Embedded below is the video of Haynes' interview on Wall Street Week:



Be sure to also check out Donald Drapkin's appearance on Wall Street Week as well as Ricky Sandler's interview.

Oaktree Capital's Howard Marks: Latest Memo

Oaktree Capital's Chairman Howard Marks has released his latest memo.  It is entitled "Inspiration from the World of Sports" and obviously highlights the parallels between investing and sports.

This is a concept Marks has touched on before, where he talked about how they're similar: both competitive, both quantitative (can see results), meritocracies, team-oriented, and satisfying when you win.

Tiger Management's Julian Robertson has identified competitiveness as one of the top attributes he looks for in hedge fund managers.

Other similarities can be made when comparing poker to investing/trading as well. 

In the end, Marks concludes that one of the key lessons from sports is that, "For most participants, success is likely to lie more dependably in discipline, consistency and minimization of error, rather than in bold strokes - high batting average and an absence of strikeouts, not the occasional, sensational home run."

Embedded below is Marks' latest memo, "Inspiration from the World of Sports:



You can download a .pdf copy here.

For more from this manager, head to Mark's memo on

Glenview Capital Adds To FMC & Tenet Stakes, Trims Flextronics & Community Health Stakes

Larry Robbins' hedge fund firm Glenview Capital has made numerous portfolio adjustments recently.  Below are the details of the various SEC filings they've made.

Increases FMC Position

Glenview has filed a 13G with the SEC on shares of FMC Corporation (FMC).  Per the filing, Glenview now owns 5.01% of the company with over 6.69 million shares.

This is up from the 4.8 million shares they owned at the end of the second quarter.  The filing was made due to activity on October 12th.

Per Google Finance, FMC is "a diversified chemical company. The Company serves agricultural, consumer and industrial markets with solutions, applications and products around the world. The Company operates in three business segments: FMC Agricultural Solutions, FMC Health and Nutrition, and FMC Lithium. The Company's FMC Agricultural Solutions segment develops, markets and sells three classes of crop protection chemicals, which include insecticides, herbicides and fungicides. The FMC Health and Nutrition segment focuses on food, pharmaceutical ingredients, nutraceuticals, personal care and similar markets. The pharmaceutical additives are used for binding, encapsulation and disintegrant applications. The Company's FMC Lithium segment manufactures lithium products."


Reduces Flextronics Exposure

Second, the hedge fund has also filed a Form 4 with the SEC regarding its position in Flextronics (FLX).  Per the filing, Glenview sold 20 million shares at $11.1 on October 22nd.  After this transaction, they still own 55.13 million shares.

Per Google Finance, Flextronics is "a Singapore-based provider of global supply chain solutions. The Company designs, builds, ships and serves packaged electronic products for its original equipment manufacturers (OEMs) in various groups. The Company offers a range of design and engineering services that relate to manufacturing (including enclosures, metals, plastic injection molding, precision plastics, machining, and mechanicals), system integration and assembly and test services, materials procurement, inventory management, logistics and after-sales services (including product repair, warranty services, re-manufacturing and maintenance), supply chain management software solutions and component product offerings (including rigid and flexible printed circuit boards and power adapters and chargers)."


Trims Community Health Systems Stake

Third, Larry Robbins' hedge fund has filed a Form 4 with the SEC indicating they've reduced their stake in Community Health Systems (CYH).  Per the filing, Glenview sold 279,074 shares on October 22nd at weighted average prices of $27.7284 and $26.8947 with about a third of the sales occurring at $30.08.

After these sales, Glenview still owns 11.81 million shares of CYH.

Per Google Finance, Community Health Systems is "a hospital company and an operator of acute care hospitals in communities across the United States. The Company provides healthcare services through the hospitals that it owns and operates in non-urban and selected urban markets throughout the United States. It operates in two operating segments: hospital operations and home care agencies operations. Its hospital operations include the Company's acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. Its home care agencies operations provide in-home outpatient care. Services provided through its hospitals and affiliated businesses include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. It provides a range of hospital healthcare services and other outpatient services to patients in the communities in which the Company is located.."


Adds to Tenet Healthcare Position

Last, Glenview also increased its holdings of Tenet Healthcare (THC).  Per a Form 4 filed with the SEC, Glenview acquired 500,000 shares total on October 22nd at weighted average prices of $28.8656 and $29.8034.  After these buys, Glenview now owns over 16.99 million shares of THC.  As we've detailed previously, Glenview has previously been out buying THC in October.

Per Google Finance, Tenet Healthcare is "a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets. As of December 31, 2014, it operated 80 hospitals, 210 outpatient centers, six health plans and Conifer Health Solutions, LLC (Conifer), which provides healthcare business process services in the areas of revenue cycle management, value-based care and patient communications. It provides operational management for revenue cycle functions, including patient access, health information management, revenue integrity and patient financial services. It also offers communications and engagement solutions to optimize the relationship between providers and patients. Conifer operates a management services business that supports value-based performance through clinical integration, financial risk management and population health management. It has two operating segments: Hospital Operations and other, and Conifer.."

What We're Reading ~ 10/22/15

10 poor investment theses [Irrelevant Investor]

The case against short selling [Long Short Trader]

The five "why's" in problem solving [Wallbuilder]

The danger of 1-year performance numbers [A Wealth of Common Sense]

Latest post from the Valeant (VRX) bear camp [Bronte Capital]

How bad will it get for American Express? [Bloomberg]

China is not collapsing [Project Syndicate]

Kingmakers of China's internet: Baidu, Alibaba and Tencent [WSJ]

A look at wireless tower stocks [Barrons]

Tribune Media shares at a 50% discount [Barrons]

Fossil Group (FOSL): a value stock with temporary problems? [Value & Opportunity]

Netflix is creating a cordless nightmare for traditional media [Institutional Investor]

Light beer gets in touch with serious side [WSJ]

Auto parts retailers' immunity to Amazon drives stock surge [Bloomberg]

Why investors don't fund dating [Andrew Chen]

Robots and us [MIT]

Notes From Lee Ainslie's Talk at Citi Australia Conference

Maverick Capital's founder Lee Ainslie recently presented at the Citi Conference in Australia and below are some notes from the event.

Notes From Lee Ainslie's Talk at Citi Australia Conference 2015

Founded Maverick in 1993
Ex Tiger Cub
Engineering degree
$10bn FUM
Typically 100 positions, 37 investment staff
2/3 of capital is from the profits they have made
Med and Large cap, 75% gross in US
The hedge fund targets 135% long 90% short
Focusses on stock specific risk and portfolio risk
Don't think looking at net long, gross, volatility, beta etc is that useful for them. They used to do that, but it changed 4 yrs ago as it doesn't adequately look at the risk
Constantly stress test portfolio - how would it have performed in 08 or other crises?
Invest in stocks that perform well in bad markets
Very atuned to what their peers are doing so they don’t get caught up in HF loved stocks (MF note: Their Q2 13F as of June 30th shows they held positions in some hedge fund hotels such as VRX (though they were reducing the stake), AGN, CHTR, PCLN, LBTYK, FLT, TDG and a few others ~ but obviously their portfolio might have changed since then)

Focus on 3 factors: Stock dispersion,  intra stock correlation, equity volatility 

Volatility has been subdued for a while now but sudden spike last 2 months
BUT even with spike still below LT avg, can go much higher
Went 49yrs never hit that level from 1939-1988?
10 yrs 1988 - 98
4yrs 98-02
6yrs 02-06
Volatility spikes are becoming more frequent which is good for HF's 

Volatility of other asset classes running above LT avg - 10yr trading 199% of LT avg vol. Oil 126%
Dispersion of stock prices has been very low for 5yr period.. not good for HF's
When dispersion is high HFs outperform 

Stock correlation is very high - meaning stocks reacting more to macro than fundamental
Lower correlations equal better returns
Country policy convergence is widening which is good for HFs.. eg China vs Europe vs US
First time Eu and Fed have had conflicting policy = lower correlation 

They see these headwinds as becoming tailwinds - i.e. vol will go up, dispersion will increase, stock correlation will reduce.
HF's have been poor performers in recent times, but that could change as environment will help them 

HFs reduce gross in high vol but they are such a large % of mkt they all take off gross at same time and hence large moves 

Thinks the 3 key things that happened in fin crisis 
1. Short bans
2. Worries about PB's not having stock available
3. Survival of financial institutions called into question 

All 3 unlikely to happen again in next crisis  

HFs are currently very defensive... good contrarian indicator
Stocks always over-react on down side so need to be in a position to buy the crisis sell offs
Risky stocks sell off first.. avoid them   

Question & Answer Session  

Where has his performance come from?  

In early may net and gross was on their LT avgs
Indicator of changing risk was peaking which set off alarm bells
HFs had high exposure to stocks which don’t perform well in down mkts, so they pulled back risk
Stuck to stocks which outperform in down mkts
Looked at which stocks did well in crisis
Always debate merits of individual positions weekly - 3hr meeting
Also have a top down meeting once a week with chief PMs on where their risks are
Returning money when don't see opportunities builds confidence within investor base.. don't want to be too large and damage performance if you can’t use it. Wont be better off in the long run 

Thoughts on China? 

Cautious view, worse than ppl think. More than half of every listed company delisted themselves(?) The damage to investor confidence in that scenario is bad. Too many rules, scares investors, people dont want to put their money in as risk it gets locked up. Less tools for them now to be reponsive and hence why the devaluing is continuing. They are neutrally postured. Have equal amount long and short in terms of revenue from China. No active bets 

Has he found Australia good for alpha? Best idea here? 

No exposure currently due to Superannuation - so much capital trapped domestically so valuations are too high on global standards. Not short though as doesn't think that is a bubble that will burst soon. (For those unfamiliar: Superannuation is an Australian pension system where employers take 9% of gross wage and it goes into a regulated pension saving on behalf of the employee.  Most of it typically goes into Australian listed shares and property, so for that reason these assets are often overvalued when looking at global multiples so it's harder for offshore funds to invest as they have to pay up.)  

View on liquidity? 

On fixed income side scares him to death. The day Gross left Pimco he tried to make a few changes and it moved treasury markets big time. The % Maverick trade electronically has sky rocketed  

View on ETFs? 

ETFs can be big problem for investors but doesn't worry about them as much as most. Can create dynamics that are not good in the short term but can create opportunities. Some don’t work as advertised under periods of stress. Possibly an opportunity when it happens 

Fed rates? 

Surprised they didn't raise in Sept - unless data weakens will be very surprised if they dont raise in the 1st 6 months next yr. Holds consensus view 

Portfolio weighting US vs Asia? 

Portfolio very heavily weighted to US vs Asia - always been there, better relationships with mgmt etc. Quality of companies very high in US. 3/4 of port is in US which is LT avg (that is % of gross)


For more on this manager, we've posted up some of Maverick Capital's recent activity.

Pennant Capital Reduces Universal Stainless & Alloy Stake

Alan Fournier's hedge fund firm Pennant Capital has filed an amended 13G with the SEC regarding its position in Universal Stainless & Alloy (USAP).  Pennant now owns 9.9% of the company with 703,219 shares. 

This is down from the 1.14 million USAP shares they owned at the end of the second quarter.  The filing was made due to activity on October 21st.

As we've highlighted previously, Pennant has been slowly trimming its USAP stake for a while now and shares are down around 56% over the past six months.

Per Google Finance, Universal Stainless & Alloy "manufactures and markets semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company's manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. The Company's products are sold to service centers, forgers, rerollers, original equipment manufacturers (OEMs) and wire redrawers. The Company also performs conversion services on materials supplied by customers. The Company's products are manufactured in a range of grades and melt qualities, including argon oxygen decarburization (AOD), electro-slag remelted (ESR), vacuum induction melting (VIM) and vacuum-arc remelted (VAR)."

Invest For Kids Chicago Conference 2015 ~ Discount For Readers

The seventh annual Invest For Kids Chicago Conference is coming up in a few weeks and space is limited.  The event features prominent hedge fund managers sharing investment ideas to benefit underprivileged children in Chicago.

Discount For Our Readers

Readers receive $100 off the price of a Professional Ticket using discount code MARKETFOLLY (it's case sensitive.)  This discount expires November 2nd.  Click here to register.

Event Details

When: November 4th, 1:30-5:30 PM
Where: Harris Theater, Chicago

Speakers List

John Burbank, Passport Capital
Ricky Sandler, Eminence Capital
Steve Tananbaum, GoldenTree Asset Management
Sam Zell, Equity Group Investments
Andy Hall, Astenbeck Capital
James Flynn, Deerfield Capital
N. David Samra, Artisan Partners
Barry Sternlicht, Starwood Capital Group
Soren Aandahl, Glaucus Research
Rupal Bhansali, Ariel Investments
Jonathan Litt, Land and Buildings Investment Management
Michael Sacks, GCM Grosvenor
Emerging Managers: Andy Greenberg, Saker Management & David Heller, Cloud Gate Capital

You can learn more about the event and buy tickets at www.investforkidschicago.org

Lee Cooperman's 7 Reasons For Market Upside

Omega Advisors founder Lee Cooperman recently appeared on Bloomberg TV and outlined seven reasons for market upside.  Here's his rationale:

1. This would be the first market peak that occurred without one Fed tightening.  He says on average, the market went up for 2.5 years after the first rate hike.

2. Bear markets come due to recession, overvaluation, hostile Fed, or a geopolitical event.  Those don't really seem to be present, with the caveat of the last one.

3. Markets usually peak during euphoria and he doesn't see any signs of that.

4. The stock market has already corrected recently.

5. What's the alternative to stocks... bonds yielding 2% or cash earning zero?

6. There's enormous substitution taking place of debt for equity.  Corporations are announcing big buybacks and that supports the market.

7. Valuation is reasonable

Embedded below is the video of Cooperman's Bloomberg appearance:



You can view recent portfolio activity from Cooperman here.

Tiger Global Files 13G on Pure Storage

Chase Coleman's hedge fund Tiger Global has filed a 13G with the SEC regarding its position in Pure Storage (PSTG).  Per the filing, Tiger Global now owns 17.9% of the company with over 5.24 million shares (represented by 1 million shares of Class A stock and 4.24 million shares of Class B stock which may be converted into Class A stock at 1:1 ratio at the option of Tiger.)

The filing was required due to activity on October 7th.  The company recently went public, however Tiger Global had already invested in the company when it was still private.  Tiger participated in a $225 million Series F round at a pre-money valuation of over $3 billion back in 2014, per the company's website but was also an investor prior to that round too.

Per Google Finance, Pure Storage is "a United States-based flash enterprise storage array company. The Company enables the deployment of flash in the data center. The Pure Storage FlashArray is ideal for high performance workloads, including server virtualization, desktop virtualization (VDI), database (OLTP, real-time analytics), and cloud computing. Its application includes VMware, Virtual Desktop Infrastructure (VDI), Oracle Database and structured query language (SQL) Server. Its vSphere Web Client plugin enables complete management of storage within VMware: automatically create, expand or shrink datastores, see array-side capacity and performance of each datastore, and understand real storage usage through deduplication."

Hedge Fund Links ~ 10/16/15

Thoughts on hedge funds [A Wealth of Common Sense]

A profile of Al Gore's Generation Investment Management [The Atlantic]

Inside Steve Cohen's Point 72 academy program [Business Insider]

Why people invest in hedge funds [A Wealth of Common Sense]

Big name hedge funds hit by performance woes [Bloomberg]

A September to forget for many managers [ii alpha]

Fortress plans to close flagship macro fund [WSJ]

Renaissance Technologies to shut down small fund [Reuters]

The Stanford endowment experiment [ai cio]

Hedge funds hit by fall in management fees [EuroMoney]

Six funds fined by SEC on short selling rule violations [ii alpha]

Stockpickers fail to shine in downturn [FT]

Cargill to wind down hedge fund arm [FT]

CFA, MBA, CAIA, PhD or Masters: what do hedge funds want? [eFinancial Careers]

ION's Short Altice Presentation From Sohn Conference Tel Aviv

The Sohn Conference in Tel Aviv just took place and at it Stephen Levey and Jonathan Half's ION Asset Management laid out their case for shorting Altice.

We thought it'd be relevant to highlight given that numerous hedge funds had been involved on the long side in either Numericable/Altice or both over the past year in varying capacities.

The crux of ION's thesis is that Altice has overpaid for assets and its margin targets are skeptical.  Patrick Drahi's company recently announced the acquisition of Cablevision (CVC) in the US.

Embedded below is ION's short Altice presentation from the Tel Aviv Sohn Conference:



For more on hedge fund short positions, we've posted up recent short selling activity by hedge funds as well as a recent interview with Jim Chanos.

Meritage Group Increases Axalta Coating Systems Stake

Jim Simons, founder of quant Renaissance Technologies, also has a family investment vehicle called Meritage Group managed by his son Nathaniel.  Meritage has filed a 13G with the SEC regarding its position in Axalta Coating Systems (AXTA).  Per the filing, Meritage now owns 5% of AXTA with over 12 million shares.

This is an increase of over 3.22 million shares in their position size since the end of the second quarter when they owned 8.78 million shares.  The filing was made due to activity on October 2nd.

Warren Buffett's Berkshire Hathaway is also involved in AXTA and bought around $28, slightly below where the stock is trading now.  Our most recent Hedge Fund Wisdom newsletter highlighted the thesis on AXTA if you want to catch up quickly on the name.

Carlson Capital Ups Vitamin Shoppe Position

Clint Carlson's hedge fund firm Carlson Capital has filed an amended 13D with the SEC regarding its position in Vitamin Shoppe (VSI).  Per the filing, Carlson now owns 6.94% of the company with over 2 million shares.

This is an increase from the 1.86 million shares they owned at the end of the second quarter.  The filing shows they were out buying in late July, sporadically throughout August and September, and most recently on the first two days in October at $31.70-$32.48.

Their 13D also notes they intend to continue to have discussions with management and the board about reducing the company's expenses, altering the company's capital allocation and buyback policies and the composition of the board.

Per Google Finance, Vitamin Shoppe is "a multi-channel specialty retailer and contract manufacturer of vitamins, minerals, herbs, specialty supplements, sports nutrition and other health and wellness products (VMS). The Company operates through three segments: retail, which includes Vitamin Shoppe, Super Supplements and Vitapath retail store formats; direct, which consists of its e-commerce and catalog formats, and manufacturing, which consists of the Nutri-Force manufacturing operations. The Company operates through its wholly owned subsidiary, Vitamin Shoppe Industries Inc. and Vitamin Shoppe Industries Inc.s' wholly owned subsidiaries, VS Direct Inc., Vitamin Shoppe Mariner, Inc. (VSM), VS Hercules LLC (VSH), Vitamin Shoppe Global, Inc. (VSG) and Vitapath Canada Limited (VCL)."

What We're Reading ~ 10/14/15

The psychology of risk and reward [Farnam Street]

The (non) velocity of money [Reformed Broker]

The CFA vs MBA decision [A Wealth of Common Sense]

Latest market commentary from Byron Wien [Blackstone]

The king of online gambling [Forbes]

Thoughts on Fastenal (FAST) [Base Hit Investing]

A look at Air Products & Chemicals (APD) [Bear of Burrard Street]

Stock picks from Marty Whitman's successor [Barrons]

Why interest rates could stay lower for longer than previously thought [Market Anthropology]

The social network illusion that tricks your mind [Technology Review]

Venture capital and the internet's impact [Stratechery]

Move over Louis Vuitton, here's LFX [Bloomberg]

Secrets to building a mighty network [Backchannel]

The Collected Wisdom of Seth Klarman ~ Compilation By Santangel's Review

Santangel's Review has recently compiled an excellent resource on Baupost Group's Seth Klarman.  They've gone through and compiled quotes from letters, articles, interviews, transcripts and more to highlight Klarman's views on various investing topics.

Given that Klarman is considered one of the best investors of our time, this is certainly well worth your time.

Embedded below is The Collected Wisdom of Seth Klarman:



You can download a copy here.

Thanks to Santangel's Review for compiling such an excellent resource.

New Graham & Doddsville Issue: Interviews With Alex Sacerdote & Ed Bosek

Columbia Business School's investment newsletter Graham & Doddsville is out with its latest edition.  It features interviews with Whale Rock Capital's Alex Sacerdote, BeaconLight Capital's Ed Bosek, Jane Siebels of Siebels Asset Management, as well as the gentlemen from Global Endowment Management.

Sacerdote talks about his focus on the technology sector and the 'S curve' of inflection points that is so critical to his process of finding successful tech investments.  He also lays out his thesis on Amazon (AMZN) and NetEase (NTES),

Bosek previously worked at Atticus Capital, a fund we highlighted on the site numerous times before it eventually closed. He talked about how deregulation and demutualization are big drivers of his idea generation and pitched China Resource Enterprises (SEHK:291) and Daqin Railway (SHSE:601006).

The issue also features two student pitches: a long of Tenneco (TEN) and a merger arbitrage/special situation pair of long RNF / short UAN.

Embedded below is the latest issue of Graham & Doddsville:



Be sure to also check out the previous issue of Graham & Doddsville.

Viking Global Starts Laboratory Corp Stake

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding shares of Laboratory Corp (LH).  Per the filing, Viking now owns 5.3% of LabCorp with over 5.39 million shares.

This is a newly disclosed stake for the firm and the filing was made due to activity on October 1st.

We also posted up other recent portfolio activity from Viking Global here.

Per Google Finance, LabCorp is "an independent clinical laboratory company in the United States. Through a national network of laboratories, the Company offers a range of clinical laboratory tests that are used by the medical profession in core testing, patient diagnosis, and in the monitoring and treatment of disease. The Company manages its operations through two segments: the Clinical diagnostics laboratory segment, which includes core testing, as well as genomic and esoteric testing; and the Other segment, which consists of the Company's non-United States clinical diagnostic laboratory operations in Ontario, Canada. It also provides specialty testing services in the areas of allergy, clinical trials, diagnostic genetics, women's health, cardiovascular disease, identity, forensics, infectious disease, endocrinology, oncology, coagulation, occupational testing and pain management."

Robin Hood Investors Conference 2015: Discount For Our Readers

Robin Hood invites you to the Third Annual Investors Conference.

Join us in New York City on November 16-17 for the 3rd Annual Robin Hood Investors Conference presented by J.P. Morgan and hosted by Hyatt.

Over the past two years, the Robin Hood Investors Conference has brought together the most influential policy experts, hedge fund managers, financial leaders, tech innovators, and real estate investors to share market insights and provide actionable, money-making ideas.  Their stock picks have collectively outpaced the S&P 2:1.


2015 Robin Hood Speakers List

Paul Tudor Jones, Tudor Investment Corp
John Griffin, Blue Ridge Capital
Dan Loeb, Third Point
Philippe Laffont, Coatue Management
Bill Ackman, Pershing Square
David Einhorn, Greenlight Capital
T. Boone Pickens, BP Capital
Larry Robbins, Glenview Capital
Anthony Bozza, Lakewood Capital
Jamie Dimon, J.P. Morgan
Mike Cagney, SoFi
Mary Erdoes, J.P. Morgan Asset Management
Barry Sternlicht, Starwood Capital Group
Whitney Tilson, Kase Capital
Tim Ferriss, Angel Investor/Author
Roland Fryer, Harvard University
Dave Giroud, UpStart
Sam Hodges, Funding Circle


Discount For Our Readers

As in years' past, the conference will sell out so we urge you to click here to purchase tickets now as seats are limited.

Discount: Use code "market folly 15" to get 10% off your total ticket price.

As with all things Robin Hood, 100% of ticket sales go to helping our New York City neighbors living in poverty build better lives for themselves and their families.  We hope you will join us for this exciting event.
 



For more information and to register, head to Robin Hood's website.

Sohn Conference San Francisco: Excellence In Investing For Children's Causes

The 6th annual Sohn Conference San Francisco is coming up in two weeks.  It brings together some of the world's top investors to share their ideas in order to benefit the Excellence in Investing for Children's Causes Foundation.


Conference Details

When: Tuesday, October 27th, 2015 (Registration at 10 a.m.)
Where: Hyatt Regency San Francisco
Website: https://www.excellencesf.org


Sohn San Francisco Speakers List

Jeffrey Ubben, ValueAct Capital
Mick McGuire, Marcato
J. Kyle Bass, Hayman Capital
Kurt Billick, Bocage Capital
Gil Simon, Apex Capital
William Duhamel, Route One Investment Company
Mike Wilkins, Kingsford Capital
Malcolm Fairbairn, Ascend Capital
Carl Kawaja, Capital World Investors
Marc Schneidman, Aquilo Capital
Christopher Chabris, author of The Invisible Gorilla


Next Wave Sohn Speakers 

New this year, the event also features a 'Next Wave Sohn' event, held at 10:30 a.m. before the main conference.  It features emerging managers sharing their best ideas.  Speakers include:

David Brown, Hawk Ridge Management
Jonathan Goldberg, BBL Commodities
Steven Landry, Eastbay Asset Management
Richard Merage, MIG Capital
Moderator: George Fox, Titan Advisors



Event Flyer & Registration

You can register for the event by clicking here or you can call 415-728-4455

It should be a fantastic day full of investment ideas and also includes a buffet lunch and cocktail reception afterwards.

Remember, conference proceeds support Bay Area organizations focused on improving educational opportunities and life outcomes for underserved youth.  A portion of the proceeds also benefit their partner, The Sohn Conference Foundation to treat and cure pediatric cancer and childhood diseases.

For more information, head to https://www.excellencesf.org

 

Jim Chanos Interview: Glencore, Tesla, Volkswagen & More

Short seller Jim Chanos of Kynikos Associates appeared on Bloomberg TV and talked about some of his latest short positions.  Here are some of the highlights:

On Glencore:  "We're not going to comment on our position on Glencore. But I will say is we know the company pretty well.  Let's just say I'm a potential purchaser ... to close out a short you have to buy stock."

On Volkswagen:  "No, we don't want to be short.  If anything I think we'd be looking at Volkswagen on the long side. But we have not invested in Volkswagen.  I think they'll survive"

On Tesla:  "We haven't disclosed our position officially in Tesla. Let's just say I'm not very positive on the company and we'll leave it at that."

He also ended by saying his favorite short right now is US E&P companies.

Embedded below are the videos of Chanos' appearance on Bloomberg TV:

Video 1


Video 2


Video 3


Video 4


Video 5



We've also posted up Chanos' thoughts on some of his other shorts as well.

Baupost Group Discloses Orexigen Therapeutics Stake

Seth Klarman's investment firm Baupost Group has filed a 13G with the SEC regarding shares of Orexigen Therapeutics (OREX).  Per the filing, Baupost now owns 17.17% of the company with over 25.82 million shares.

This is a newly disclosed equity stake for the firm as they did not show one at the end of the second quarter.  The filing was made due to activity on September 30th.

Shares of OREX are down over 69% over the past six months, so this certainly fits Baupost's preference to buy beaten down names.

You can view other portfolio activity from Baupost Group here.

Per Google Finance, Orexigen Therapeutics is "a biopharmaceutical company. The Company is focused on the development of pharmaceutical product candidates for the treatment of obesity. The Company's product is Contrave, a fixed dose combination of bupropion hydrochloride (HCl) extended release (ER) and naltrexone HCl ER. The Company's product Contrave, is approved in the United States by the United States Food and Drug Administration (FDA) as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with an initial body mass index (BMI), of around 30 kilograms per square meter (kg/m2) or greater (obese), or around 27 kilograms per square meter or greater (overweight) in the presence of at least one weight-related comorbid condition. The Company also submitted an application for marketing authorization with the European Medicines Agency (EMA) for Contrave under the name Mysimba.."

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]

Bill Ackman's Talk at Bloomberg Markets Most Influential Summit

Pershing Square's Bill Ackman sat down with Stephanie Ruhle for an interview at Bloomberg Markets Most Influential Summit yesterday.

It's around a 30-minute talk but here's the broad takeaways from the interview:

- Still owns Valeant Pharmaceuticals (VRX), but hasn't added to the position or sold any shares

- Looked at General Electric (GE) but passed because it wasn't cheap enough; thinks Nelson Peltz will do well with it

- More to come with his Herbalife (HLF) saga

- Notes Burger King (part of Restaurant Brands (QSR)) has cut costs, improved stores/experience and same store sales are doing well

- Thinks Bloomberg should run for President

Embedded below is the video of Ackman's Bloomberg talk:



For more from this manager, head to Pershing Square's semi-annual report.

Paul Tudor Jones Interview on Bloomberg: "Choppier Market" Ahead

Paul Tudor Jones of macro hedge fund Tudor Investment Corp recently sat down with Bloomberg to talk about the macro picture, the Federal Reserve, and more.

Jones said that, "But I think the reality is it's clear low interest rates hurts savers and help borrowers. I think what the Fed is doing and the reason why they won't raise interest rates now, I think it's kind of acknowledging to me a much larger macro issue, which is if you think about the last 50, 60 years, there's is a perfect negative correlation between the interest income paid by the Federal government and interest rates. So the higher the share of GDP that's paid in interest income by the Federal government, typically that correlates high interest rates also. So what the Fed is doing is recognizing there is a tail risk with low interest rates. There's a tail risk with zero. We seem to run perpetual deficits at minus two, minus percent."

When asked what QE4 would do, he replied, "Again, I think it's a really interesting time in the market. It's if you kind of just look at financial conditions index, if you look at where global growth is going, this is typically historically associated, been associated with the Fed lowering interest rates, some type of interest rate relief. And that's always typically been good for stock markets. And yet now we have a central bank that I think for the first time is actually -- is managing towards the credit side of the equation, as opposed to the economic side of the equation.     And by that I mean they're looking at the balance sheet. They're uncomfortable with the size of it. That's why they want to get rates away from zero. I think they're concerned about the expanding global debt-to-GDP. And I think they're trying to probably insert back into the equation the fact that interest rates can rise and that people need to manage their balance sheets accordingly, particularly the federal government."

Jones was then questioned as to why they haven't already raised rates.  He said:

"I think they had their opportunity last spring. They probably missed it. They're trying to catch up. And again, all you have got to do think about at zero rates it encourages this nonstop borrowing from the federal governments because of the fact that interest income as a percentage of GDP is at one of the lowest levels in the past 34 years because rates are at zero. It encourages bad behavior by a variety of different stakeholders, not the least of which is our federal government.

Well, again, I think the Federal Reserve Board is managing for the balance sheet, as opposed to local economic conditions. Every time we've had this kind of set of macro variables, a huge bear market in commodities, slowing global growth, you have typically seen the Fed respond with an easing. I think of '98 in particular. And normally it would be a great time to own stocks.     Now I think for the first time since Volcker, probably, you see the Fed managing, in my mind, they're managing for the balance sheet to take out the tail risk associated, and associated with expanding debt virtually globally, and not to mention our federal debt. And I don't know if they necessarily say that avowedly, but to me it makes the most sense."

When asked if he thinks this points to a bear market, Jones said it points to a choppier market. He went on to add, "Again, the BOJ seems to be a reluctant easer, their balance sheet constrained, ECB, everyone expects them to go, but it will be an incremental step because I think they're, to a certain extent, balance sheet constrained and uncomfortable with it. So normally where you would be seeing a lot of interest rate relief globally, it's different this time. And I think that's one reason why the markets are going to be much choppier going forward."

Tudor Jones then ended the interview by noting that, "I think it's challenging times. There are a lot of crosscurrents. Again, it would be really easy to be super bullish on equities, given what the response function should be, but it's not going to happen."

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

Viking Global Increases Kite Pharma Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding Kite Pharma (KITE).  Per the filing, Viking now owns 6.1% of the company with over 2.68 million shares.

This is up from the 677,334 shares they owned at the end of the second quarter.  The filing was made due to activity on September 25th.

You can view other recent portfolio activity from Viking here.

Per Google Finance, Kite Pharma is "a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of cancer immunotherapy products to eradicate cancer cells. The Company does this using its engineered autologous cell therapy (eACT), which is an approach to the treatment of cancer. eACT involves the genetic engineering of T cells to express either chimeric antigen receptors (CARs) or T cell receptors (TCRs). It is conducting a Phase II clinical trial of a TCR-based therapy and multiple Phase I-IIa clinical trials of CAR- and TCR-based therapies. The Company's lead product candidate KTE-C19, is a CAR-based therapy, for the treatment of refractory diffuse large B cell lymphoma (DLBCL), primary mediastinal B cell lymphoma (PMBCL) and transformed follicular lymphoma (TFL). It is developing a pipeline of eACT-based product candidates for the treatment of advanced solid and hematological malignancies: CD19CAR, KTE-C19CAR and EGFRvlll CAR, among others."

Bridger Capital Raises TG Therapeutics Stake

Roberto Mignone's hedge fund firm Bridger Capital has filed a 13G with the SEC regarding shares of TG Therapeutics (TGTX).  Per the filing, Bridger now owns 6% of the company with over 3.15 million shares.

This is basically double the 1.53 million shares they owned at the end of the second quarter. The filing was required due to activity on September 25th.  TGTX shares are down over 27% over the past three months and Bridger has taken advantage of that dip.

Per Google Finance, TG Therapeutics is "a biopharmaceutical company focused on the acquisition, development and commercialization of treatments for b-cell malignancies and autoimmune diseases. As of December 31, 2014, TG had two therapies targeting hematological malignancies. TG-1101 (ublituximab) is a glycoengineered monoclonal antibody that targets a specific epitope on the CD20 antigen found on mature B-lymphocytes. The Company is also developing TGR-1202, an orally available PI3K delta inhibitor. As of December 31, 2014, both TG-1101 and TGR-1202 were in clinical development for patients with hematologic malignancies. The Company also has a pre-clinical program to develop inhibitors of IRAK4 (interleukin-1 receptor-associated kinase 4), as well as an antibody research program to develop anti-PD-L1 and anti- glucocorticoid-induced tumor necrosis factor receptor (GITR) antibodies, which were in pre-clinical development as of December 31, 2014."

Coatue Management & Maverick Capital Short Ashtead Group

Philippe Laffont's hedge fund firm Coatue Management has recently filed a disclosure with the UK's regulatory body regarding a short position.  They are now short 1.02% of Ashtead Group's (LON:AHT) shares as of September 30th.  This is up from the 0.91% of shares they were short just two days prior.  This is also an increase from the 0.52% they were short back on August 6th.

Lee Ainslie's hedge fund Maverick Capital has also filed similar disclosures.  Per their filing, Maverick now is short 0.74% of Ashtead Group as of September 24th.  However, Maverick's position has decreased in size recently from the 0.85% of shares they were short on September 23rd.


Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

Per Google Finance, Ashtead Group is "a United Kingdom-based equipment rental company with networks in the United States and the United Kingdom. The Company operates through two business units: Sunbelt, which provides pump and power, climate control and scaffolding service, and A-Plant business, which operates through Eve Trakway Limited (Eve), which constructs temporary roadways and barriers; PSS, which offers trenchless technology and fusion services, and FLG (lifting) services. Both the units are also engaged in general equipment and related businesses. The Company rents a range of construction and industrial equipment across a range of applications. Its equipment can be used to lift, power, generate, move, dig, compact, drill, support, scrub, pump, direct, heat and ventilate. Its subsidiaries include Ashtead Holdings PLC, Sunbelt Rentals, Inc., Sunbelt Rentals Industrial Services LLC, Ashtead Plant Hire Company Limited, Ashtead Capital, Inc. and Ashtead Financing Limited."

Third Point Ups Short in Peugeot

Dan Loeb's hedge fund firm Third Point has recently filed disclosures with the French regulatory body regarding a short position.  Per the filing, Third Point is now short 1.01% of Peugeot's shares in France as of September 24th.

This is up from the 0.98% of shares they were short on September 23rd.  As we've previously highlighted, Viking Global is also short Peugeot (though they've been trading around the position as of late).  Viking's last disclosure shows them short 0.99% of shares as of the end of September, down from as high as 1.52% of shares in the middle of the month.

Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

 You can view additional portfolio activity from Third Point here.

Hound Partners Boosts Short in Admiral Group

Jonathan Auerbach's hedge fund firm Hound Partners recently filed updated short position disclosures in the UK regarding their short of Admiral Group (LON:ADM).

Per the filings, Hound has disclosed they are now short 1.71% of shares as of October 1st.  This is up from the 1.6% of shares they were short back on June 17th.

Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must privately file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

Per Google Finance, Admiral Group is "a United Kingdom-based company engaged in the provision of car insurance. The Company has four operational segments, which include UK Car Insurance, International Car Insurance, Price Comparison and Other. The UK Car Insurance segment consists of the underwriting of car insurance and other products that supplement the car insurance policy. The International Car Insurance segment consists of the underwriting of car insurance and the generation of revenue from additional products and fees, from underwriting car insurance outside of the United Kingdom. The Price Comparison segment relates to the Company's price comparison Websites; Confused.com in the United Kingdom, Rastreator in Spain, LeLynx in France and compare.com in the United States. The Other segment comprises of the United Kingdom household insurance, the Company's commercial van insurance broker, Gladiator and commercial van insurance. It operates approximately 14 brands in seven countries."

Blue Ridge Capital Shorts Royal Mail

John Griffin's hedge fund Blue Ridge Capital has filed a short position disclosure with regulators in the UK.  Per the filing, Blue Ridge is now short 0.75% of Royal Mail's (LON:RMG) shares as of September 25th.  As far as we can tell, this is a newly disclosed short position.

Given the volatility in markets as of late, we're providing updates on various hedge fund short positions.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must privately file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

Per Google Finance, Royal Mail plc provides postal services. The Company's segments include UK Parcels, International & Letters (UKPIL), General Logistics Systems (GLS) and Other. The UKPIL segment provides letter and parcel services to and from countries across the world under reciprocal arrangements with other overseas postal administrations. It is also responsible for the design and production of the United Kingdom's stamps and philatelic products. The UKPIL segment includes Royal Mail Group Limited, Royal Mail Estates Limited and Royal Mail Investments Limited. The GLS segment operates in continental Europe and the Republic of Ireland and operates ground-based parcel delivery network in Europe. The GLS segment includes GLS Germany GmbH & Co. OHG, GLS Italy S.p.A. and GLS France S.A.S. The Other segment includes its subsidiaries, Romec Limited, which is engaged in facilities management; NDC 2000 Limited, a provider of design services, and Quadrant Catering Ltd, a provider of catering services.

Lone Pine Capital Increases Short Position in Rolls Royce

Steve Mandel's hedge fund firm Lone Pine Capital has recently made some disclosures regarding their short position in shares of Rolls Royce (RR.L) in the UK.

We previously highlighted Lone Pine's initial short in RR shares earlier this summer and now they've increased their short position further.  Per filings made with the UK's FCA, Mandel's firm increased the short to 0.66% of shares on September 22nd, up to 0.76% of shares on September 23rd, and then finally up to 0.85% of shares a day later.  This is the most recent disclosure.

As we've also detailed, this is now somewhat of a battleground stock between two well respected investment managers as Jeff Ubben's ValueAct Capital is long RR.  They obviously saw an opportunity for activism here and are long-term investors.  Lone Pine, on the other hand, is looking to take advantage of the near-term troubles at the company.

We've posted a bunch of short position updates this week.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

You can read more recent portfolio activity from Lone Pine here.

Glenview Capital Buys More Tenet Healthcare

Larry Robbins' hedge fund firm Glenview Capital recently filed a Form 4 with the SEC regarding its position in Tenet Healthcare (THC).  Per the filing, Glenview now owns 16.49 million THC shares.

They acquired 500,000 shares on September 30th at weighted average prices of $36.21 and $36.92.  Tenet has been a longstanding holding of the hedge fund's as part of their for-profit hospital basket.  THC shares are down 36% over the past three months.

We've also highlighted other recent portfolio activity from Glenview here.

Per Google Finance, Tenet Healthcare is "a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets. As of December 31, 2014, it operated 80 hospitals, 210 outpatient centers, six health plans and Conifer Health Solutions, LLC (Conifer), which provides healthcare business process services in the areas of revenue cycle management, value-based care and patient communications. It provides operational management for revenue cycle functions, including patient access, health information management, revenue integrity and patient financial services. It also offers communications and engagement solutions to optimize the relationship between providers and patients. Conifer operates a management services business that supports value-based performance through clinical integration, financial risk management and population health management. It has two operating segments: Hospital Operations and other, and Conifer."

Fairholme Capital Updates Stakes in Sears Canada, St. Joe's

Fairholme Capital's Bruce Berkowitz recently made a few filings with the SEC.  First, an amended 13G on its position in Sears Canada (SRSC).  According to the SEC filing, Berkowitz now owns 17.23% of the company with 17.55 million shares.  The filing was made due to activity on September 29th.  This compares to the 16 million shares that Fairholme reported in its last 13F filing as of the second quarter.

Second, Fairholme also filed an amended 13D on their longtime holding St. Joe's (JOE).  Per the filing, Fairholme now owns 32.3% of the company with 24.4 million shares.  This filing was required due to activity on September 28th.  This is a slight decrease from the 24.6 million shares Fairholme was shown to own at the end of Q2 per its most recent 13F filing. 

Fairholme's latest 13D shows they sold 105,000 shares at $18 on September 21st and 2,200 shares on August 21st at $16.78 and the fine print notes theses sales were "sold in an issuer tender offer at the direction of an advisory client" and then "sold at the discretion of an advisory client" respectively.

You can view past Fairholme portfolio activity here.

Avenue Capital's Marc Lasry: "The Best Place To Invest Is The US"

Avenue Capital's Marc Lasry today appeared on Bloomberg TV to talk about markets.

Pulled from the full transcript, Masry commented that:

On the U.S. economy, Lasry said: "I actually think the U.S. economy is doing great compared to the rest of the world.  So the first question is where would you want to invest?  Do you want to invest in the U.S., do you want to invest in Europe, do you want to invest in China, do you want to invest in emerging markets?  At the end of the day, the best place to invest is the U.S. So if I was going to be an equity investor, I would be an investor in the U.S."

On the idea of more Fed stimulus, Lasry said: "I think it would be the worst thing in the world…I think right now, we have been living off of theses low interest rates and having more stimulus isn’t what you need.  What you actually need is you need to get back to a little bit of normalacy and understand that the Fed can’t keep on pumping more and more stimulus into our economy.  Our economy is fine.  Let it grow and let it do what it needs to do."

Embedded below are some of the videos of Lasry's interview on Bloomberg TV:

Video 1


Video 2


Video 3


Video 4


For more from this manager, head to Marc Lasry's interview on Wall Street Week.

John Burbank Lecture at UC Berkeley Haas - Invest In Things That Have Never Happened Before

Passport Capital's John Burbank earlier this year gave a talk at UC Berkeley Haas that's well worth your time watching.  In it, he lays out Passport's approach of combining three different types of investing: macro, fundamental, and quant.

He notes that all risk is backwards looking and hedging is for regression to the mean. 

He presented a concept that "Price is a liar."  He argues that, "Price means nothing other than the equilibrium of liquidity."  Counter that with the typical thinking that "Price is all the information that exists in the market."

He says that when something new happens it takes yeas for all the liquidity in the world to discount that thing

Burbank went on to say: "Do not imagine you know where we are in 2019.  The market doesn't, it has no idea."  That said, he laid out his best guesses for the next 5 years: low global growth, leading equities over fixed income, US over emerging markets, stronger dollar, favor quality & liquidity, innovation & governance win.

His longs have been positioned to benefit from a stronger dollar while his shorts the opposite (foreign companies that have borrowed in dollars, commodity exposed companies, etc.)  The Passport managers also feels that yields are going lower.

Burbank's talk is intriguing and thought provoking.  He also echoes another salient point that other investors have highlighted: you have to match your investing style to your personality.

Embedded below is the video of Burbank's talk at Berkeley:



For more from the Passport manager, head to Burbank's presentation at the SALT conference from earlier this year.

Nelson Peltz's Trian Fund Presentation on Their New Stake in General Electric

Nelson Peltz's investment firm Trian Partners has disclosed a new stake in General Electric (GE).  Trian now apparently owns 98.5 million shares of GE worth around $2.5 billion.

Trian's amended 13F filed with the SEC for the second quarter now shows that they owned 49.6 million shares of GE at the end of June.   

Of the stake, Peltz said that "We invested in GE because it is undervalued and underappreciated by the market despite what we believe is a transformation that will allow its world-class industrial businesses to drive attractive shareowner returns.  Our recent discussions with Jeff and his team have solidified our belief that they are highly motivated to fully deliver on GE's transformation and share much common ground with Trian on ways to improve long-term shareowner value."

Trian's Ed Garden also added, "Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $40 to $45 by the end of 2017 based on our view that GE can deliver EPS of at least $2.20 in 2018. We believe that the strategy of GE management and the board is broadly in line with our recommendations and we look forward to continuing to interact with management as GE works to expand operating margins, drive organic growth, increase capital efficiency and execute a disciplined capital allocation strategy.”


Trian's Presentation on General Electric

Embedded below is their presentation on GE:



You can download a .pdf copy here.

For more on this firm, head to Trian's recent portfolio activity.

Donald Drapkin on Wall Street Week

Anthony Scaramucci's rebooted show Wall Street Week this time around featured Donald Drapkin of Casablanca Capital, as well as former NYSE Chairman & CEO Dick Grasso and James Frischling of NewOak.

Embedded below is the video of Drapkin's appearance on Wall Street Week:



For more from this show, check out Steve Tananbaum's appearance on Wall Street Week as well as their previous interview with Eminence Capital's Ricky Sandler.