What We're Reading ~ 9/15/16

Pre-Suasion: A Revolutionary Way to Influence and Persuade [Robert Cialdini]

How to overcome the high cost of inconsistent decision making [HBR]

If you're buying, who's selling? [Irrelevant Investor]

On simplifying investment checklists [Base Hit Investing] 

Profile of a short seller [Barrons]

Simple rules of capitalism [Collaborative Fund]

On asking questions to get answers that matter [Medium]

A look at one of the country's biggest franchisees [Forbes]

Why you should hire people toughened by failure [Entrepreneur]

Middle class incomes had fastest growth on record last year [Washington Post]

Gloom descends on luxury goods industry [Bloomberg]

A look at Bank of the Ozarks (OZRK) [MicroCapClub]

Shenzhen is making hardware like Silicon Valley makes apps [Fusion]

Sohn Conference San Francisco 2016 Only A Few Weeks Away

The 7th Annual Sohn Conference San Francisco is coming up in a few weeks.  If you're on the West Coast, this is the premiere event that features prominent investors sharing investment ideas to benefit  various charities.   For more information on the event, head to www.excellencesf.org

The beneficiaries this year include SEO Scholars, First Place for Youth, Alive and Free, Squash Drive and Meritus College Fund.  Also, a portion of the proceeds benefit their partner the Sohn Conference Foundation in their dedicated efforts toward the treatment and cure of pediatric cancer and childhood diseases.

 
Speakers List: Sohn Conference San Francisco 2016

This year's event features:

- Mason Morfit (ValueAct Capital)
- Chamath Palihapitiya (Social Capital)
- Carson Block (Muddy Waters Capital)
- Mick McGuire (Marcato Capital)
- Arjun Divecha (Grantham, Mayo, Van Otterloo & Co)
- Joseph Lawler (JFL Capital)
- Christpher Lord (Criterion Capital)
- Jeff Osher (Harvest Capital Strategies)
- Peter Palmedo (Sun Valley Gold)
- Alvin Roth (Stanford University)
- Mihir Worah (PIMCO)


Event Details

When: October 5th, 2016  11:00 AM to 6:00 PM

Where: Hyatt Regency San Francisco

Agenda:  Includes access to the Next Wave Sohn Panel of rising investors, buffet lunch, the main Sohn Conference San Francisco conference, and cocktail reception

Registration:  Click here to register for the conference


Embedded below is the conference flyer:




This is always a fantastic event and it's for great causes.  Head to www.excellencesf.org to find out more about the conference and to get tickets before they're all gone.

Pershing Square Reduces Air Products & Chemicals Stake

Bill Ackman's Pershing Square has been busy in the markets lately.  The latest activity includes selling some shares of his stake in Air Products and Chemicals (APD).  This comes after Pershing recently acquired a new stake in Chipotle (CMG) as well.

Per an amended 13D filed with the SEC, Pershing Square now owns 7.8% of APD with over 16.97 million shares (via 4 million common stock and 12.9 million underlying call options).

This is down from the previous 9.5% of the company they owned (with 20.54 million shares exposure).  The 13D filing notes that on September 12th Pershing sold over 3.5 million shares. 

The rationale for this transaction was: "The three-year commitment period for Pershing Square's co-investment vehicles in the issuer ends on September 30th, 2016.  The Reporting Persons sold the Common Stock to return capital to the PSV Funds co-investors."

Per Google Finance, Air Products & Chemicals is "an industrial gases company. The Company's Industrial Gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. The Company operates through seven segments: Industrial Gases-Americas, Industrial Gases-Europe, Middle East, and Africa (EMEA), Industrial Gases-Asia, Industrial Gases-Global, Materials Technologies, Energy-from-Waste, and Corporate and other. The Company is also a supplier of liquefied natural gas process technology and equipment. The Company's Materials Technologies business serves the semiconductor, polyurethanes, cleaning and coatings, and adhesives industries. The Company manufactures and distributes products in two lines of business: Industrial Gases and Materials Technologies."

ValueAct Capital Continues To Reduce MSCI Stake

Jeff Ubben's activist firm ValueAct Capital has been reducing its stake in MSCI (MSCI).  That trend continued with the latest Form 4 they filed with the SEC.

On September 9th, 12th, and 13th, ValueAct sold a combined 225,000 MSCI shares at prices of $85.78, $85.45, and $84.99.  After these sales, Ubben's firm only owned 625,900 shares of MSCI.

In other recent activity from the firm, ValueAct also built up its Seagate (STX) stake.

Per Google Finance, MSCI "offers content, applications and services to support the needs of institutional investors throughout their investment processes. The Company's operating segment includes Index, Analytics and All Other segment. All Other segment comprises ESG and Real Estate segments. The Index operating segment is a provider of investment decision support tools, including equity indexes and equity index benchmarks. The Analytics operating segment consists of products and services used for portfolio construction, risk management and reporting. The ESG operating segment offers products institutional investors use for assessing risks and opportunities arising from environmental, social and governance issues. ESG tools are used to evaluate both individual securities and investment portfolios. The Real Estate operating segment is a provider of real estate performance analysis for funds, investors, managers, lenders and occupiers." 

Carl Icahn Files 13D on Freeport McMoRan (FCX)

Activist investor Carl Icahn has filed an amended 13D with the SEC regarding his stake in Freeport McMoRan (FCX). The filing's main purpose was to send a statement from Icahn:

"This is a classic example of activists working constructively with an existing Board and management.  Since the Company announced the "Review of Strategic Alternatives" for its Oil & Gas business in October 2015 (not coincidentally the date of our arrival on the Board), the analyst community has heavily doubted the Company's ability to execute asset sales in this environment (particularly the Deepwater Gulf of Mexico assets along with all liabilities and potential future bonding obligations).  Yesterday's announcement demonstrates the Company is making good on its stated goal of deleveraging and is on track to cut its net debt by half, from year end 2015 through the end of next year, at current copper prices.  I applaud management and the whole Board of Directors for all steps taken in this regard.     

In light of the Company's recent initiatives, and as a large shareholder with two representatives on the Board of Directors, I completely endorse CEO Richard Adkerson's recent comments that Freeport is "…open for all strategic moves, whether that means selling assets, [or] selling the company" to create value for all shareholders."

For more on this investor, we just highlighted Icahn's talk at the Delivering Alpha conference yesterday.

Per Google Finance, Freeport McMoRan is "a natural resource company with a portfolio of mineral assets, and oil and natural gas resources. The Company's segments include the Morenci, Cerro Verde, Grasberg and Tenke Fungurume copper mines, the Rod & Refining operations and the U.S. Oil & Gas Operations. It has organized its operations into five primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum mines. Its portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa, and oil and natural gas assets in the United States. Its Atlantic Copper smelts and refines copper concentrates, and markets refined copper and precious metals in slimes. It has a smelter at its Miami, Arizona, mining operation, and molybdenum conversion facilities in the United States and Europe."

Delivering Alpha Conference Notes 2016: Singer, Dalio, Chanos, Miller & More

CNBC & Institutional Investor's Delivering Alpha Conference is underway and below are some notes.  This post will be updated throughout the day as the various speakers/panels are ongoing:


Delivering Alpha Conference Notes 2016

Paul Singer (Elliott Associates):  Said that it's a "very dangerous time in global markets" right now.  Argued central bank independence doesn't really exist.  Noted that Bank of Japan is basically a top-10 shareholder of various Japanese corporations but the economy hasn't rebounded.  Called it insane, "It's not working, but they keep going."  Feels that investors are careless about inflation threat.  Says sell long-term bonds.    "There will come a time when inflation, despite growth suppressive policies can blow through targets and surprise everyone."  Says we're basically in the middle of close to a 40 year experiment in how leveraged a system can be, and in how many ways.  Thinks gold as a directional asset is underrepresented in portfolios "as the only money and store of value that has stood the test of time that is, in my view, undervalued and underpriced in today's world and sort of is the opposite of confidence in central banks."


Ray Dalio (Bridgewater Associates):  Discussed ways to spur economic growth with Timothy Geithner.  Dalio says, "We're in a situation where central banks want to drive you out of cash and out of bonds."  Called it a dangerous situation, as central banks run out of assets to buy and push investors into riskier assets.  Dalio thinks raising rates is risky as it's not priced into the yield curve.  "There's only so much you can squeeze out of a debt cycle and we're there, globally."


Jim Chanos (Kynikos Associates):  Still short Alibaba (BABA), says they're "buying anything that's for sale, just burning cash."  He's also still short Tesla (TSLA) and SolarCity (SCTY).  Says the two companies combining basically puts TSLA on a path to potential bankruptcy.


Carl Icahn (Icahn Capital): Said he's requesting from the FTC the right to own up to 50% of Herbalife's (HLF) outstanding shares.  Currently has the right to around 35% of the company.  Re: the market, "I think it's very dangerous in the market right now.  If they don't raise rates, I think we're in a major bubble."  There's a problem either way with a dilemma if you raise rates or if you don't.  Says the economy is messed up because of people like Janet McCabe at the EPA.  Also: "I hate to be immodest but I've returned 28% annualized since inception."


Marc Lasry (Avenue Capital):  Said that you can "make a lot of money on direct lending," stepping in for reluctant banks.  On investing - find people who are talented / engaged / who care and invest with and then don't worry about daily/monthly liquidity.


Bill Miller (Legg Mason):  Likes Amazon (AMZN) or Facebook (FB) compared to Alphabet (GOOG/L) due to the growth rates and margins.  Thinks AMZN doubles in 3 years.  Also likes Valeant Pharmaceuticals (VRX) long, one of his larger positions.  His main trade idea was long S&P 500, short 10-year Treasury (dividend yield on S&P is higher).


Robert Bishop (Impala Asset Management):  Best idea was Teck Resources (TCK): improving China demand, management has cut costs, end of metals 5-year downtrend.  Says Freeport McMoran (FCX) still has a worrisome debt picture.


Barry Sternlicht (Starwood):  Real estate in New York City is "a disaster" with rents at the high-end down 15%.  Noted the problem many investors face: "you have to invest in something, you can't just sit in cash."  On Tesla, says he loves the car but would probably be short the company.  Questioned Pinterest's valuation, arguing it seemed like a lot of money for a bulletin board.  Said Doppler Labs could be like the next Oculus Rift.


Mary Erdoes (JPMorgan):  "They're called crowded trades when they don't work and momentum trades when they do work."  Says it's time to weed out the stock pickers who aren't the best. 


Dawn Fitzpatrick (UBS):  Likes merger-arbitrage, argues that bank prop trading desks exiting keeps spreads attractive and wide on bigger deals.  Said short-term alpha is harder and that investors need to be more patient.  Says women are less emotional investors and better at cutting losers.

Passport Capital Ups Habit Restaurants Stake

John Burbank's hedge fund firm Passport Capital has filed a 13G with the SEC regarding shares of Habit Restaurants (HABT).  Per the filing, Passport now owns 5.6% of HABT with 1 million shares.

This is up from the 429,257 shares they owned at the end of the second quarter.  The filing was made due to activity on August 22nd.

For more from this manager, we've previously posted up notes from Burbank's talk at the SALT Conference.

Per Google Finance, The Habit Restaurant is "a fast casual restaurant company. The Company is engaged in preparing made-to-order char-grilled burgers and sandwiches featuring tri-tip steak, grilled chicken and sushi-grade albacore tuna cooked over an open flame. In addition, it offers salads, sides, shakes and malts. The Company prepares its burgers with char-grilled preparation, topped with caramelized onions, melted cheese, lettuce and tomatoes. The Company's Char burgers menu includes Double Char burger, Mushroom Char, Teriyaki Char burger, BBQ Bacon Char Burger and Santa Barbara Style. Its Sandwich menu includes Chicken, Tri-tip, Albacore Tuna, Veggie burger, Chicken club and Pastrami. The Company operates at over 140 locations in over 10 markets in approximately nine states. It operates a variety of restaurant formats, including end-cap, free-standing, inline and drive-in, primarily within suburban shopping centers and retail settings."

Bow Street Increases Adamas Pharmaceuticals Position

Akiva Katz and Howard Shainker's hedge fund Bow Street has filed a 13G with the SEC regarding its position in Adamas Pharmaceuticals (ADMS).  Per the filing, Bow Street now owns 5.3% of Adamas with over 1.15 million shares.

This is up from the 486,747 shares they owned at the end of the second quarter.  The filing was made due to activity on September 2nd.


About Bow Street

Prior to founding Bow Street, Katz worked Brahman Capital and Shainker worked at Third Point.  Bow Street was originally seeded by Blackstone Group.


About Adamas Pharmaceuticals

Per Google Finance, Adamas Pharmaceuticals is "a pharmaceutical company. The Company is focused on the development and commercialization of therapeutics targeting chronic disorders of the central nervous systems (CNS). Its segment focuses on the development and commercialization of therapeutics targeting chronic disorders of the central nervous system. Its ADS-5102 is an extended-release version of amantadine that is intended for once daily administration at bedtime. It is developing ADS-8704, which is a fixed-dose combination of its controlled release version of memantine and donepezil for the treatment of moderate to severe dementia related to Alzheimer's disease. Its ADS 8902, a triple combination antiviral drug therapy for influenza. It also offers Namzaric (memantine hydrochloride extended-release and donepezil hydrochloride) capsules (formerly MDX-8704) and Namenda XR (memantine hydrochloride) extended release capsules."

Baupost Group Adds To PBF Energy, Trims SunEdison Semiconductor & Innoviva

Seth Klarman's investment firm Baupost Group has filed three 13G's with the SEC recently.  Here's the summary:

Baupost Group Adds To PBF Energy Stake

First, Seth Klarman's firm has filed with the SEC indicating they now own 16.07% of PBF Energy (PBF) with over 15.72 million shares.

This is an increase of over 5 million shares as they previously owned 8.37 million shares at the end of the second quarter.  The filing was made due to activity on August 31st.

To see the rest of Baupost's equity portfolio, check out the brand new issue of our newsletter.

Per Google Finance, PBF Energy is " is an independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company operates through two segments: Refining and Logistics. The Refining segment produces a range of products at each of its refineries, including gasoline, ultra-low-sulfur diesel (ULSD), heating oil, jet fuel, lubricants, petrochemicals and asphalt. The Logistics segment includes PBF Logistics LP (PBFX), which engages in the receiving, handling and transferring of crude oil and the receipt, storage and delivery of crude oil, refined products and intermediates. It sells its products throughout the Northeast, Midwest and Gulf Coast of the United States, as well as in other regions of the United States and Canada, and ships products to other international destinations."


Trims SunEdison Semiconductor Stake

Second, Baupost Group has also disclosed a reduction in its SunEdison Semiconductor (SEMI) stake.  They now own 5.6% of the company with over 2.37 million shares

This is a decrease of 6 million shares as they previously owned 8.37 million shares at the end of the second quarter.  The filing was made due to activity on August 31st.

Per Google Finance, SunEdison Semiconductor is "engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors."


Also Reduces Innoviva Position

Lastly, Baupost Group has also disclosed a reduction in their Innoviva (INVA) position.  They now own 15.29% of the company with 17.37 million shares.

This is down from the 17.61 million shares they previously owned at the end of the second quarter.  The filing was made due to activity on August 31st.

Per Google Finance, Innoviva "focuses on bringing new medicines to patients in areas of unmet need. The Company is engaged in the development, commercialization and financial management of bio-pharmaceuticals. Its portfolio focuses on the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR/BREO ELLIPTA (fluticasone furoate/vilanterol (FF/VI)) and ANORO ELLIPTA (umeclidinium bromide/vilanterol (UMEC/VI)). It operates in providing capital return to stockholders by maximizing the potential value of its respiratory assets partnered with GSK segment. RELVAR/BREO is a once-a-day combination inhaled respiratory medicine consisting of VI, a LABA and FF, an inhaled corticosteroid (FF/VI) delivered via the ELLIPTA dry powder inhaler. ANORO ELLIPTA is a dual bronchodilator consisting of UMEC, a long-acting muscarinic antagonist (LAMA) and VI, a LABA for the treatment of chronic obstructive pulmonary diseases (COPD)."

ValueAct Capital Builds Seagate Stake, Sells More MSCI

Per a Seagate Technology (STX) press release, Jeff Ubben's ValueAct Capital has become one of the company's largest shareholders.  They now own 9.5 million STX shares, up from the 3 million shares they owned at the end of the second quarter.

ValueAct participated in a secondary transaction and has also been invited to join as an observer on Seagate's board.

Partner Mason Morfit said that, "Seagate has a strong storage technology portfolio and is well positioned to benefit from attractive long-term secular trends.  We are excited about the opportunity to work with the Seagate team, at both the Board and management level, to help increase long-term value for all shareholders."

The brand new issue of our Hedge Fund Wisdom newsletter recently analyzed Seagate's main competitor, Western Digital.

Per Google Finance, Seagate is "a provider of electronic data storage technology and solutions. The Company's principal products are hard disk drives (HDDs). In addition to HDDs, it produces a range of electronic data storage products, including solid state hybrid drives, solid state drives, peripheral component interconnect express (PCIe) cards and serial advanced technology architecture (SATA) controllers. Its storage technology portfolio also includes storage subsystems and high performance computing solutions. Its products are designed for applications in enterprise servers and storage systems, client compute applications and client non-compute applications. It designs, fabricates and assembles various components found in its disk drives, including read/write heads and recording media. Its design and manufacturing operations are based on technology platforms that are used to produce various disk drive products that serve multiple data storage applications and markets."


ValueAct Sells More MSCI

Also, per a Form 4 filed with the SEC,  ValueAct has sold some more shares of MSCI (MSCI).  They sold 450,000 shares in total on September 6th-8th at prices of $88.4, $88.5, and $87.6.

After these transactions, Jeff Ubben's firm now only owns 850,900 shares of MSCI.

Per Google Finance, MSCI "offers content, applications and services to support the needs of institutional investors throughout their investment processes. The Company's operating segment includes Index, Analytics and All Other segment. All Other segment comprises ESG and Real Estate segments. The Index operating segment is a provider of investment decision support tools, including equity indexes and equity index benchmarks. The Analytics operating segment consists of products and services used for portfolio construction, risk management and reporting. The ESG operating segment offers products institutional investors use for assessing risks and opportunities arising from environmental, social and governance issues. ESG tools are used to evaluate both individual securities and investment portfolios. The Real Estate operating segment is a provider of real estate performance analysis for funds, investors, managers, lenders and occupiers."

Hedge Fund Links ~ 9/9/16

Survivorship bias explained [A Wealth of Common Sense]

The hedge fund trader who beat the feds [Fortune]

David Tepper is 'on guard' [CNBC]

Hedge funds suffer biggest redemptions since 2009 [Bloomberg]

Tiny satellites: the latest innovation hf's are using to get a leg up [WSJ]

The hedge fund industry is shrinking [TIME]

Smaller reigns supreme in hedge funds [NYPost]

Brevan Howard & Tudor battle losses [WSJ]

How this hedge fund robot outsmarted its human master [Bloomberg]

The hedge fund industry has a problem [Business Insider]

Hedge fund managers are waiting for the world to change [Yahoo Finance]

Lessons from a trading great: Bruce Kovner [Deflation.Market]

Paulson & Co exec to launch own firm [Reuters]

Warren Buffett Continues Buying Phillips 66

As we've detailed previously, Warren Buffett's Berkshire Hathaway has been continuously buying Phillips 66 (PSX) shares.  They've filed yet another Form 4 with the SEC indicating they've purchased even more PSX.

The latest filing shows Berkshire purchased 82,361 shares at a weighted average price of $77.8617 on September 1st.

After this round of buying, Berkshire now owns over 79.65 million shares of PSX.

Per Google Finance, Phillips 66 is "an energy manufacturing and logistics company with midstream, chemicals, refining and marketing, and specialties businesses. The Company operates its business through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment includes its equity investment in DCP Midstream , LLC (DCP Midstream) and its investment in Phillips 66 Partners LP. The Midstream segment consists of three business lines: Transportation, DCP Midstream and NGL. The Midstream segment also transports crude oil and other feedstocks to refineries and other locations, and delivers refined and specialty products to market, and provides storage services for crude oil and petroleum products. The Chemical segment manufactures and markets petrochemicals and plastics. The refining segment buys, sells and refines crude oil and other feedstocks into petroleum products. The M&S segment purchases for resale and markets refined petroleum products."

What We're Reading ~ 9/8/16

In-depth pitch on Liberty Global Latin America (LILA/K) [Find Me Value]

A second look at Amerco (UHAL) [Punch Card Research]

WD-40 (WDFC): a case study of the bubble in 'safe' stocks [Intrinsic Investing]

Analysis of Dell Technologies new VMWare tracking stock [Clark Street Value]

Morris Mark on four stocks he likes [Barrons]

Uber: from zero to seventy billion [Economist]

Google, Uber and the evolution of transportation [Stratechery]

Why electric cars will be here sooner than you think [WSJ]

How Apple's car could crack the automotive industry [Autocar]

Old article on capital allocator Henry Singleton [BrianLangis]

A look at the online travel industry [Phocuswright]

Why walking helps us think [New Yorker]

Inside Dyson's reinvention factory [Forbes]

Will Amazon kill FedEx and UPS? [Bloomberg]

On subscription retail [The Robin Report]

Theranos: how Elizabeth Holmes's house of cards fell [Vanity Fair]

Pershing Square Builds Chipotle Stake

Bill Ackman's activist firm Pershing Square has filed a 13D with the SEC regarding Chipotle (CMG).  They've disclosed a new position in the company and now own 9.9% of CMG with over 2.88 million shares.

We've highlighted recently how Ackman has been selling various stakes and raising cash and now we know where some of that cash was allocated to.

Chipotle has slowly been trying to recover from a series of food poisonings that severely affected the company's results.  As shares have fallen, some value investors have started to poke around and Ackman has joined the cause as an activist voice.  The 13D notes he'll meet with management.

To build the stake, Pershing bought and sold various options and you can view the full list of transactions here.

While some people have given Ackman grief for the saga with Valeant Pharmaceuticals (VRX), the quick service restaurant space is something he absolutely has experience with.  It will be interesting to see how he tries to help them recover from their troubles given he feels the company has an excellent brand.

Per Google Finance, Chipotle is "together with its subsidiaries operates Chipotle Mexican Grill restaurants. The Company's Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. The Company operates approximately 1,970 Chipotle restaurants throughout the United States, over 10 in Canada, seven in England, four in France and one in Germany. The Company's restaurants include over 10 ShopHouse Southeast Asian Kitchen restaurants, serving Asian-inspired cuisine. The Company owned and operated approximately three Pizzeria Locale restaurants, a fast casual pizza concept, resulting in a totaling of approximately 2,010 restaurants. The Company sells gift cards which do not have an expiration date.."

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Glenview Capital Boosts Computer Sciences Stake

Larry Robbins' hedge fund firm Glenview Capital has filed a 13G with the SEC regarding its position in Computer Sciences Corp (CSC).  Per the filing, Glenview now owns 5.26% of the company with over 7.38 million shares.

This is an increase over the 6.87 million shares they owned at the end of the second quarter.  The filing was made due to activity on August 23rd.

You can see the rest of Glenview's portfolio in the brand new issue of our newsletter.

Per Google Finance, Computer Sciences Corp is "a global provider of information technology (IT) and professional services and solutions. The Company operates through two segments: Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment provides various technology solutions, including consulting, applications services and software. GBS has three primary growth engines: end-to-end applications services, consulting services, big data services and industry-aligned software and solutions. The GIS segment provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, cyber security, compute and managed storage solutions to commercial clients across the globe. GIS also delivers CSC's various cloud offerings, including Infrastructure as a Service (IaaS), private cloud solutions, CloudMail and Storage as a Service (SaaS). The Company has operations throughout North America, Europe, Asia and Australia."

Kingstown Capital Sells Some Ocwen Financial Equity, Buys Senior Notes

Michael Blitzer hedge fund firm Kingstown Capital Management has filed an amended 13D with the SEC regarding its position in Ocwen Financial (OCN).  Per the filing, Kingstown now owns 7.66% of the company with 9.5 million shares.

This is a decrease in their common stock position compared to the 11.35 million shares they owned at the end of the second quarter.  The filing was made due to activity on August 31st. 

It also indicates they purchased 6.625% Senior Notes due 2019.

Per Google Finance, Ocwen Financial is "a financial services holding company. The Company, through its subsidiaries, operates as a mortgage company. The Company's segments include Servicing, Lending, and Corporate Items and Other. The Company's Servicing segment consists of its core residential servicing business. The Company's Lending segment is focused on originating and purchasing conventional and government-insured residential forward and reverse mortgage loans. The Company's Corporate Items and Other segment includes business activities that include providing secured floor plan lending to used car dealerships through its Automotive Capital Services (ACS) venture and providing financing to investors to purchase single-family homes and apartments for lease through its Liberty Rental Finance venture. The Corporate Items and Other segment also includes the diversified fee-based businesses, which provide property valuation, real estate owned (REO) management, title and closing services."

Three Bays Capital Trims Cypress Semiconductor Holdings

Matthew Sidman's hedge fund Three Bays Capital has filed an amended 13D regarding its position in Cypress Semiconductor (CY).  Per the filing, Three Bays owns 7% of the company with 22.53 million shares.  This includes 7 million shares underlying call options.

This is a slight decrease compared to the net position they owned at the end of the second quarter.  The 13D disclosed their most recent transactions where they bought 168,373 shares on July 11th but then sold shares on July 19th and August 30th (500,000 total shares at prices of $11.34 and $11.71).

Prior to founding Three Bays in 2013, Sidman worked at Highfields Capital.

Per Google Finance, Cypress Semiconductor is "delivers solutions from automotive, industrial and networking platforms to interactive consumer and mobile devices. The Company's segments include Programmable Systems Division, Memory Products Division, Data Communications Division and Emerging Technologies Division. The Programmable Solutions Division designs and develops solutions for end-product manufacturers. The Memory Products Division designs and manufactures portfolio of high-performance memories for embedded systems. The Data Communications Division focuses on solutions for industrial, handset and consumer applications. The Emerging Technologies Division consists of its subsidiaries, AgigA Tech, Inc. and Deca Technologies, Inc. Its product portfolio includes NOR flash memories, Traveo microcontrollers, programmable system-on-chip solutions, CapSense capacitive touch-sensing controllers, and Wireless Bluetooth Low-Energy and universal serial bus (USB) connectivity solutions."

What We're Reading ~ 8/31/16

Jesse Livermore: The man who sold America short in 1929 [Tom Rubython]

50 of the best investing blogs [Acquirers Multiple]

Why value investors are different [Seth Klarman]

Paul Tudor Jones and the nature of the beast [A Wealth of Common Sense]

Be mindful of rich valuations in low volatility stocks [Morningstar]

What are interest rates forecasting for stocks? [Cordant]

Are you smarter than an algorithm? [Financialist]

A new payoff to risky decisions [Psychology Today]

Don't let what you cannot do interfere with what you can [Tony Isola]

German savers lose faith in banks, stash cash [WSJ]

Coach's brand transformation fake-out [Glenn Chan]

Can TripAdvisor turn things around? [Skift]

Dollar Stores' startling admission: half of US consumers are in dire straits [Zero Hedge]

Tencent: WeChat's world [Economist]

The twilight of China's online consumer paradise [Bloomberg]

Why Amazon is suddenly swimming in cash [Internet Retailer]

The war on cash [The Long and Short]

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2016: Rolls Royce, Valeant & More

Ruane Cunniff Goldfarb, managers of the Sequoia Fund, recently released the transcript from its investor day.  In it, they talk about many of their investments.

Their top ten holdings as of the end of the second quarter were:  Berkshire Hathaway (BRK.A/B), TJX Companies (TJX), MasterCard (MA), Alphabet (GOOG/L), O'Reilly Auto (ORLY), Mohawk Industries (MHK), Fastenal (FAST), Rolls Royce (RR.L), Constellation Software (CSU.T), and Dentsply Sirona (XRAY).

They outline their thinking on Rolls Royce and also address the Valeant Pharmaceuticals (VRX) saga, which they no longer own.

Embedded below is the transcript of Ruane Cunniff's 2016 Investor Day:



You can download a .pdf copy here.