Hedge Fund Links ~ 2/17/17

Black Edge: new book about billionaire trader Steve Cohen [Sheelah Kolhatkar]

Excerpts from Elliott Management's letter [Business Insider]

Trump's 'stew of uncertainties' puts hedge fund managers on alert [WSJ]

Tiger hedge funds become Wall Street prey [WSJ]

TCI's Chris Hohn launches bid to block aerospace deal [Cityam]

Meet Paul Hilal, the activist investor taking on CSX [WSJ]

A look at Folger Hill's year-end letter [Business Insider]

How to invest like Loeb, Einhorn, Ackman at a discount [Barrons]

Chelsea Clinton's husband closes hedge fund [Bloomberg]

Former MSD Capital analyst convicted of insider trading [FINalternatives]

An older story about George Soros' portfolio after Trump's election [WSJ]

ValueAct Capital Starts Bioverativ Stake

Jeff Ubben's activist investment firm ValueAct Capital just filed a 13D with the SEC regarding shares of Bioverativ (BIVV).  Per the filing, ValueAct now owns 7.1% of the company with 7.7 million shares.

This is a newly disclosed stake for the firm and the filing was made due to recent activity.  BIVV just went public in January as a spin-off from Biogen (BIIB). ValueAct did not own any BIIB shares as of the end of 2016 per their latest 13F filing with the SEC.

The 13D filing notes Ubben's firm made equity forward purchases and were buying between mid-January and early February with the bulk of their purchases coming with a forward price of around $44.41.

The filing contains the standard boilerplate that they bought shares because they thought the security was undervalued.  They've had and anticipate having further discussions with directors of the company.

For more on this firm, we just highlighted other recent ValueAct portfolio transactions.

Per Google Finance, Bioverativ is "focused on the discovery, research, development and commercialization of therapies for the treatment of hemophilia and other blood disorders. It markets approximately two products, including ELOCTATE [Antihemophilic Factor (Recombinant), Fc Fusion Protein], and ALPROLIX [Coagulation Factor IX (Recombinant), Fc Fusion Protein], extended half-life clotting-factor therapies for the treatment of hemophilia A and hemophilia B, respectively. ELOCTATE and ALPROLIX use a process known as Fc fusion to link recombinant factor VIII and factor IX, respectively, to a protein fragment in the body known as Fc. The fusion of the factor with the Fc protein fragment uses a naturally occurring pathway and is designed to extend the half-life of the factor thereby making the product last longer in a person's blood than various factor therapies. Its pipeline includes BIVV 001(rFVIIIFc-VWF-XTEN) and BIVV 002 (rFIXFc-XTEN)."

Charlie Munger's Talk at Daily Journal Annual Meeting 2017

Charlie Munger just held the annual meeting at the Daily Journal and shared his thoughts on a wide range of topics.  It's a rare chance to hear from one of the investment world's great minds.


Here's a few quick takeaways and quotes followed by the full video below:

- He owns a chunk of Berkshire Hathaway (BRK.A/B) stock, a chunk of Costco (COST) stock, and then has money allocated to Li Lu's fund.  He feels diversification is basically for the 'know nothing' investor.

- On why Berkshire bought airline stocks and Apple: "I don't think we've gone crazy.  I think the answer is we're adapting to a business that's gotten much more difficult." Consolidation in airlines has finally happened similar to what happened in railroads

- Munger recommended the book A Man For All Markets about Ed Thorp.  For other books he likes, be sure to check out out Charlie Munger's recommended reading list.

- "The success of Berkshire came from making two decisions a year over 50 years." 

- "You don't want to believe in luck, you want to believe in odds."

 - Regarding American Express (AXP): "If you think you know what's going to happen to payment systems 10 years out, you're probably under some state of delusion."

- On Wells Fargo (WFC): "(It) had a glitch... I don't think anything is fundamentally wrong."

- They bought Exxon Mobil (XOM) as basically a cash substitute 

 - Lots of opportunity still in China; strong and selling at cheap prices.  Problem is they gamble a lot and believe in luck, but they're formidable workers.

- On India: "India is grossly defective because they took the worst aspects of our culture, allowing a bunch of idiots to scream and stop everything.  They've taken the worst aspects of democracy."  Says the country is still battling corruption.

- "One thing about doing something dumb is that you're unlikely to do it again."


Embedded below is the video of Charlie Munger's talk at the Daily Journal annual meeting 2017:



For more on him, check out the book Charlie Munger: The Complete Investor as well as notes from the previous Charlie Munger Daily Journal meetings.

What We're Reading ~ 2/16/17

Ed Thorp's new book: A Man for All Markets [Ed Thorp]

Seth Klarman weighs in on Trump [NYTimes]

Homeownership rate in 2016 was lowest in 50 years [Corelogic]

US household debts climbed in 2016 by most in a decade [WSJ]

Income share for the bottom 50% of Americans is collapsing [Marketwatch]

On the downfall of Toshiba, a nuclear industry titan [FT]

This free range short seller is making his comeback [Bloomberg]

Does Chipotle's valuation offer a margin of safety? [Rational Walk]

A whirlwind tour through trends in China [Andreessen Horowitz]

Beware Sears's zombie apocalypse [Bloomberg]

Inside Sears' death spiral [Business Insider]

Jeff Bezos wants Amazon to be the next HBO, Showtime [NYPost]

Tim Cook says augmented reality is a big idea like the smartphone [The Verge]

Bill Gates 2017 annual letter [GatesNotes]

1-Week Free Trial to Scuttleblurb: Investment Analysis and Commentary

Scuttleblurb.com is giving our readers a free 1-week trial.  With earnings season in full swing, it's the ideal time to check it out.

Scuttleblurb provides subscribers with balanced and insightful fundamental equity analysis and commentary on companies across a variety of industries, as well as time-saving summaries of earnings calls and sell-side conferences ("Quick Blurbs").  Sample blurbs are available on the site. 

As a subscriber, you'll get access to their growing library of content and weekly email updates on 100+ blurbs per year (several hundred pages of analysis and summaries).
  

Click here to take advantage of the free 1-week trial for Market Folly readers. 


Recent posts include:

[OAK] Valuation Attractive on Normalized Fee-Related Earnings

[DLTR, DG] Dollar Store Deep Dive

[CHUBA/K] A Skeptical Take

Quick Blurbs [WETF, ALLY, HBI, ANTM, AMZN, LUV, URI, WNC]

New Graham & Doddsville Issue: Kingstown Capital Interview

Columbia Business School has released the Winter 2017 edition of its Graham & Doddsville newsletter.  In it, they feature a great interview with Guy Shanon and Michael Blitzer of Kingstown Capital.

They talk about their investment process and also outline their thesis for their largest position, Adient (ADNT), a spin-off from Johnson Controls (JCI).

The issue also features chats with Rupal Bhansali of Ariel Investments, Simeon Wallis of ValorBridge Partners, Jared Friedberg of Mercator, as well as Charles and Roy Studness of Studness Capital Management.

Lastly, this edition includes student investment pitches on short Foot Locker (FL), long Axalta Coating Systems (AXTA), and short Cardtronics (CATM).

Embedded below is Columbia Business School's latest Graham & Doddsville:



You can download a .pdf copy here.

You can also view past issues of this newsletter, including interviews with Meritage Group and MSD Capital.

Eminence Capital Starts Imperva Position

Ricky Sandler's hedge fund firm Eminence Capital has filed a 13G with the SEC regarding shares of Imperva (IMPV).  Per the filing, Eminence now owns 9.7% of the company with over 3.19 million shares.

This is a newly disclosed equity position for Eminence and the filing was made due to activity on January 31st, 2017.

Per Google Finance, Imperva "provides cyber-security solutions that protect business-critical data and applications whether in the cloud or on premises. The Company operates in the segment of development, marketing, sales, service and support of cyber-security solutions that protect business critical data and applications whether in the cloud or on premises. Its products include its Imperva SecureSphere platform for enterprise data centers, and Imperva Incapsula and Imperva Skyfence offerings for cloud-based security services. Its Imperva SecureSphere platform provides database, file and Web application security across various physical and virtual systems in data centers. Its Imperva Incapsula product line provides cloud-based Website security, denial of service protection and performance solutions. Its Imperva Skyfence product line provides visibility into, and control over, cloud and Software-as-a-Service (SaaS) applications, including shadow information technology (IT)."

Viking Global Discloses Myovant Sciences Position

Andreas Halvorsen's hedge fund firm Viking Global has filed a 13G with the SEC regarding shares of Myovant Sciences (MYOV).  Per the filing, Viking now owns 61.8% of the company with over 37.23 million shares.

This is a newly disclosed public equity position for the firm and the filing was made due to activity on December 31st.  However, Viking previously invested in private company Roivant Sciences.  Roivant has stakes in numerous other biopharma companies that have been spun-out, including Myovant.

Myovant completed its initial public offering in the latter months of 2016.

Per Google Finance, Myovant Sciences is ".a clinical-stage biopharmaceutical company focused on developing and commercializing therapies for women’s health diseases and other endocrine-related disorders. Its main product candidate is Relugolix. Relugolix is an oral, once-daily, small molecule that acts as a gonadotropin-releasing hormone (GnRH) receptor antagonist that binds to and inhibits receptors in the anterior pituitary gland. Inhibition of GnRH receptors decreases the release of the gonadotropins, luteinizing hormone, or LH, and follicle-stimulating hormone, or FSH, thereby decreasing the down-stream production of estrogen and progesterone by the ovaries in women and testosterone by the testes in men. It is advancing relugolix for the treatment of heavy menstrual bleeding associated with uterine fibroids, endometriosis-associated pain and prostate cancer. It intends to develop its second product candidate, RVT-602, for the treatment of female infertility as part of assisted reproduction."

What We're Reading ~ 2/8/17

Misbehaving: The Making of Behavioral Economics [Richard Thaler]

Honored to be listed in 2016's most influential finance Twitter accounts [Sentieo]

Shameless plug: if you don't already, follow @marketfolly on Twitter

Mitigating short exposure: learning from others' mistakes [CFA Institute]

Interview with Ed Thorp, the man who beat the casinos & markets [FT]

Stop chasing the wrong kind of growth [Harvard Business Review]

On analyst ratings and the institutional imperative [Base Hit Investing]

Old Mutual boss on how to run an active fund patiently [Daily Mail]

FIZZ: The secret history of the LaCroix fad [Bon Appetit]

How streaming is changing music consumption [HeavyBlogisHeavy]

Cannabalization, intense competition both roadblocks for Chipotle [Peridot]

The individual investors' performance incentive system [Rational Walk]

A look at NAFTA and American manufacturing [Vox]

Fidelity's bond king banks on Trump reflation trade [Bloomberg]

Facebook is trying everything to re-enter China and it's not working [WSJ]

BlackRock's robot stock-pickers post record losses [Bloomberg]

Becoming Warren Buffett HBO Documentary

Warren Buffett of Berkshire Hathaway was recently profiled in an HBO Documentary entitled, "Becoming Warren Buffett."  The film by Peter Kunhardt examines the life of the great investor.

Below are some notes and anecdotes:

-  He was always fascinated by numbers and it talks about how at an early age he discovered the power of compound interest.  He concluded, "It's a pretty simple concept, but over time it accomplishes extraordinary things."

- He goes to McDonald's everyday for breakfast on the way to work and has three options based on how much change his wife has given him for the day.  Yup, one of the biggest owners of American Express (AXP) pays for breakfast in cash.

- He framed newspapers from various financial crises and hung them on the wall as a reminder that "anything can happen in this world."

- As a young student, all his teachers owned AT&T at the time and he shorted the stock and showed the teachers proof to kind of spite them.

-  Buffett learned two rules of investing from Benjamin Graham: Rule 1: Never lose money.  Rule 2: Never forget rule number one.

- Doesn't hang his diploma from undergrad or graduate school, but instead the certificate from the Dale Carnegie course of public speaking, which he says changed his life since he was so scared of it.

- Charlie Munger said Buffett made a lot of money early on buying thinly traded securities that were incredibly cheap statistically ("cigar butt" investing).

- Started his first partnership with $105,100 - $100 from himself and the rest from investors.

- Buffett says, "The trick in investing is to just sit there and watch pitch after pitch go by and wait for the one in your sweet spot.  There's a temptation for people to act far too frequently in stocks simply because they're so liquid.  Over the years, you develop a lot of filters.  I do know what I call my circle of competence.  I stay within that circle.  Defining what your game is, where you're going to have an edge is enormously important."

- He later adds, "If you're emotional about investment you're not going to do well."

- Charlie Munger had a big impact on him by shifting him to look at wonderful companies at fair prices rather than fair companies at wonderful companies.

- Buffett said he spends 5-6 hours a day reading.  He likes to just sit and think.  When asked to describe what one word describes his success, he said 'focus.'

- "The biggest thing in making money is time.  You don't have to be critically smart, you just have to be patient."

- "Look for the job you'd take if you didn't need a job."

Someone else has uploaded it YouTube and the video is embedded below:



For more on the Oracle from Omaha, be sure to also check out Warren Buffett's recent interview with Charlie Rose.

Foxhaven Asset Management Shows Trivago Stake

Michael Pausic's hedge fund firm Foxhaven Asset Management has filed a 13G with the SEC regarding Trivago (TRVG).  Per the filing, Foxhaven now owns 8.7% of Trivago with over 2.61 million shares.

This is a newly disclosed equity position and the filing was made due to activity on January 25th.  TRVG recently completed its initial public offering (IPO) but is controlled by Expedia (EXPE), which owned 63.5% of the company as of the end of the third quarter in 2016.

At the end of the third quarter in 2016, Foxhaven also owned almost 800,000 shares of Expedia too.  They also had additional long exposure to the online travel booking segment via Priceline (PCLN) and MakeMyTrip (MMYT).


About Foxhaven Asset Management

This is the first time Foxhaven has been featured on the site.  Prior to founding the fund in 2013, Mike Pausic worked at Maverick Capital as head of the media and telecom team.  Foxhaven focuses on the technology, media, and telecom sector as well as consumer and internet. 


About Trivago

Per Google Finance, Trivago is "a company based in the Netherlands that operates an online hotel search platform. The platform allows users to search for, compare and book hotels. It gathers information from various third parties' platforms and provides information about the hotel, pictures, ratings, reviews and filters, such as price, location and extra options. The Company offers access to approximately 1.3 million hotels in over 190 countries via more than 50 localized websites and applications in various languages. The Company also offers marketing tools and services to hotels and hotel chains, as well as to online travel agencies and advertisers, among others. Its principal executive offices are located in Germany."

ValueAct Capital Sells Allison Transmission Shares Back to Company

Jeff Ubben's activist firm ValueAct Capital recently announced an agreement with Allison Transmission (ALSN) to sell shares back to the company, per an 8-K filed with the SEC.

Allison will buy 10.52 million shares at a price of $34.50 per share and the transaction is expected to close tomorrow.  ValueAct will no longer own a stake and its member will not seek re-election on the board of directors. 

Just yesterday, we highlighted how ValueAct also sold some Microsoft (MSFT) shares.  Given these two sales, perhaps they're looking to put capital to work in another name?

Also worth noting: Ashe Capital Management, an owner of 6.1% of ALSN, just filed a 13D noting that they'd be nominating William Harker to the board of the company in absence of ValueAct's representative.

Per Google Finance, Allison Transmission "design and manufacture commercial and defense fully-automatic transmissions. The Company manufactures fully-automatic transmissions for medium- and heavy-duty commercial vehicles and medium-and heavy-tactical the United States defense vehicles. The Company operates through manufacture and distribution of fully-automatic transmissions segment. The Company's transmissions are used in a range of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (primarily school, transit and hybrid-transit), motorhomes, off-highway vehicles and equipment (energy, mining and construction) and defense vehicles (wheeled and tracked). The Company's transmissions are sold under the Allison Transmission brand name and remanufactured transmissions are sold under the ReTran brand name. The Company has developed over 100 different models that are used in over 2,500 different vehicle configurations."

ValueAct Capital Trims Microsoft Position, Adds To Alliance Data Systems

Jeff Ubben's activist investment firm ValueAct Capital has filed two separate Form 4's with the SEC regarding their recent activity.

ValueAct Reduces Microsoft Stake

First, Ubben's firm has reduced its position in Microsoft (MSFT).  Per the filing, ValueAct sold 11 million shares between February 1st through 3rd at prices of $63.72, $63.12, and $63.33.

After these transactions, they're left owning over 27.62 million MSFT shares. This was their top holding at the end of the third quarter

Per Google Finance, Microsoft "develops, licenses, and supports a range of software products, services and devices. The Company's segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories, that integrate with its cloud-based offerings. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services."


Ubben's Firm Adds To Alliance Data Systems

Second, ValueAct has also filed a Form 4 with the SEC regarding their Alliance Data Systems (ADS) stake.  Per this filing, they bought 57,400 shares on January 26th at varying prices (the bulk at $217.57 and $219.18).

After these buys, they now own over 5.87 million shares of ADS. 

Per Google Finance, Alliance Data Systems is "a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company's Canadian AIR MILES Reward Program and BrandLoyalty; Epsilon, which provides end-to-end, integrated marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company's private label and co-brand retail credit card programs."

Senator Investment Group Shows Equity Stakes in Star Bulk Carriers and Noble Corp

Doug Silverman and Alex Klabin's hedge fund firm Senator Investment Group has filed two 13G's with the SEC recently.

Senator Shows Star Bulk Carrier Equity Position (SBLK)

First, Senator has filed a 13G on Star Bulk Carriers (SBLK) indicating they own 6.83% of the company with over 4.07 million shares.  This is a newly disclosed equity position for the firm and the filing was made due to activity on January 23rd.

This was part of a private placement of common shares where Oaktree Capital and Senator pruchased at $8.154 per share.  The sale netted the company $51.5 million and they've agreed to "grant shelf registration rights to the investors for the resale of their common shares"  per a press release.

Per Google Finance, Star Bulk Carriers is "an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. The Company's segment is operating dry bulk vessels. The Company will have a fleet of approximately 76 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels, with a carrying capacity between 45,588 dwt and 209,537 deadweight tonnage (dwt). Its fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company's Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia. Its vessels include Maharaj, Star Poseidon, Leviathan, Peloreus, Star Borealis, Star Angie, Star Georgia, Star Nina and Mercurial Virgo."


Senator Also Shows Noble Corp (NE) Stake

Second, the hedge fund firm also has filed a 13G on Noble (NE) indicating they own 5.76% of the company with 14 million shares.  This is another newly disclosed equity position and the activity was made due to activity on January 24th.

Per Yahoo Finance, Noble "operates as an offshore drilling contractor for the oil and gas industry worldwide. It owns and operates a fleet of mobile offshore drilling units."

Balyasny Asset Management Adds To Restoration Hardware Holdings

Dmitry Balyasny's hedge fund firm Balyasny Asset Management has filed a 13G with the SEC regarding its stake in Restoration Hardware (RH).  Per the filing, Balyasny now owns 5.41% of the company with over 2.2 million shares.

This marks an increase in their position size of over 1.85 million shares since the end of the third quarter of 2016.  The filing was made due to activity on January 30th.

Per Google Finance, Restoration Hardware is "a luxury retailer in the home furnishings marketplace. The Company offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, accessories and home decor. As of October 29, 2016, the Company operated a total of 85 retail galleries, consisting of 51 legacy Galleries, six larger format Design Galleries, seven next generation Design Galleries, one RH Modern Gallery and five RH Baby & Child Galleries throughout the United States and Canada, as well as 15 Waterworks showrooms in the United States and in the United Kingdom. In addition, as of October 29, 2016, the Company operated 28 outlet stores."

Valiant Capital Shows Yatra Online Stake

Chris Hansen's hedge fund firm Valiant Capital has filed a 13G with the SEC regarding shares of Yatra Online (YTRA).  Per the filing, Valiant now owns 13.6% of the company with over 4.37 million shares.

The filing was made due to activity on December 31st.  Yatra recently completed its initial public offering (IPO) at the end of last year.  Valiant has previously invested in the company when it was still private back in 2011.


About Valiant Capital

Chris Hansen founded Valiant Capital in 2008 after previously being a Managing Director at Blue Ridge Capital.  Valiant is a globally focused firm with many international holdings in both private and public companies and has had between $2-2.5 billion in assets under management, preferring to stay smaller to be more nimble.  Valiant returned 4.9% in 2015.


About Yatra Online

Per Google Finance, Yatra Online is "an India-based consumer travel platform and online travel agent. The Company’s segments include Air Ticketing, Hotels and Packages, and Others. Through Internet and mobile-based platform and call-centers, the Company provides the facility to book and service international and domestic air tickets to customer through business-to-consumer (B2C) and business-to-business-to-consumer (B2B2C) channel. Through an Internet and mobile-based platform, call-centers and branch offices, the Company provides holiday packages and hotel reservations. The Other segment includes the advertisement income from hosting advertisements on its Internet Websites, income from sale of rail and bus tickets, and income from facilitating Website access to travel insurance companies. It offers multiple mobile applications for a range of consumer segments and services, including Yatra, Yatra Mini, Yatra Web Check-In, Yatra Corporate, Travelguru HomeStay and Yatra Hoteliers DESTranet."

Warren Buffett's Interview With Charlie Rose: "Bought $12 Billion of Common Stocks Since Election"

Charlie Rose recently sat down with both Warren Buffett of Berkshire Hathaway as well as Bill Gates of Microsoft. 

They started off talking about the giving pledge and philanthropy and they've been surprised at the overwhelming participation. 

On business, Buffett noted that it's imperative that he be able to know and understand the business and to stay within that sphere of competence.  Of his two younger managers (Ted Weschler and Todd Combs), he notes, "I have two people who themselves have different circles of competence."  They weren't chosen because of that, but it's nice to have a huge circle he says.

He says it's harder to find acquisitions mainly because of the size of Berkshire these days.  On how he finds them, he might get a call, he might be thinking about certain areas.  Occasionally, he decides to act.

One key takeaway from the interview was that Buffett said,"We've bought $12 billion net of common stocks since the election.  (Ted and Todd) have probably bought some too." 

When asked by Rose about his purchase of airline stocks last year, Buffett said it was largely his decision to do so.

The conversation then shifted to allocation of time and Gates poignantly noted that, "You control your time.  Sitting and thinking might be a much higher priority.  It's not a proxy of seriousness that you fill every minute of your schedule."

Buffett added, "I can't buy time" and Rose noted it's the most precious resource.

Buffett thinks a 4% growth rate that the Trump Administration is targeting is pretty high and in actuality, a 2% rate would be fantastic and could potentially be possible.

Embedded below is the video of Charlie Rose's interview with Warren Buffett:

Lone Pine Capital Starts Rice Energy Position

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC regarding shares of Rice Energy (RICE).  Per the filing, Lone Pine now owns 5.8% of the company with over 11.68 million shares.

This is a newly disclosed equity position for the firm and the filing was made due to activity on January 23rd, 2017.

Per Google Finance, Rice Energy is "an independent natural gas and oil company. The Company is engaged in the acquisition, exploration and development of natural gas, oil and natural gas liquids (NGL) properties in the Appalachian Basin. The Company conducts its operations through two segments: Exploration and Production, and Midstream. The Exploration and Production segment is engaged in the acquisition, exploration and development of natural gas, oil and NGLs. The Exploration and Production segment operates in the cores of the Marcellus and Utica Shales. The Company controls approximately 231,000 net acres in the Marcellus and Ohio Utica Shale cores. It operates approximately 1,164 drilling locations. The Midstream segment is engaged in the gathering and compression of natural gas, oil and NGL production of, and in the provision of water services to support the well completion activities of, Rice Energy and third parties."

Hedge Fund Links ~ 2/3/17

Excerpts from Viking Global's Q4 letter [ValueWalk]

The case for (some) hedge funds [ai-cio]

Kyle Bass: global markets at the beginning of tectonic shift [Yahoo Finance]

Long-short hedge funds are ditching the shorts to focus on longs [Bloomberg]

The failed quest to bring down Wall Street's most wanted man [Bloomberg]

Hedge funds strike paydirt on Actelion deal after tracking private jet [Bloomberg]

Private equity and hedge fund pros on why they won't hire you [eFinancialCareers]

Pershing Square, nine others hit with SEC 'pay to play' violations [Reuters]

Citadel pays SEC to settle charges of misleading customers [Reuters]

Harvard endowment to lay off half its staff [WSJ]

Activist investor teaming up for CSX stake [Reuters]

A hedge fund expects 'hundreds of billions of dollars' in tech deals [Business Insider]

Numerai is a crowdsourced hedge fund for machine learning experts [TechCrunch]

Scaramucci's SkyBridge to sell majority stake [StreetInsider]

Here's the indictment against Platinum Partners [Business Insider]

When your hedge fund managers buys a Ferrari, find a new manager [Bloomberg]

Third Point's Q4 Letter: Bullish on Financials

Dan Loeb's hedge fund Third Point finished 2016 up 6.1%.  Third Point's fourth quarter letter outlines their bullish stance on markets, noting that de-regulation and tax decreases under various policies from President Donald Trump should spur US economic activity.

That said, they're still keeping an eye out on the potential for trade wars and/or inflation.

Particularly, they like financials and increased exposure to the sector in November and December: "We reallocated half our initial holdings from high-multiple, FCF businesses in payments, ratings, and P&C (which traditionally outperform during periods of deflation), to more traditional reflationary exposures in banks, brokers, and geographically, in Japan."

Third Point highlights that the bank stocks they're playing trade for less than 10x earnings with EPS growth in the high-teens.

Embedded below is Third Point's Q4 letter:



We've also posted up other letters today, so be sure to also check out Greenlight Capital's Q4 letter as well as Oaktree Capital's Howard Marks' latest memo.