constructive

Icahn: "I wouldn't invest with you if you were the last man on earth!" Ah ha ha. Icahn comes off absolutely terrible here.

Option Oracle is a good free program for all types of option strategies. It has a useful screening tool and several visualizations. http://www.samoasky.com/

Why would short sellers be mad at him? If anyone should be mad, it's long-time shareholders!

Kinetics Paradigm (WWNPX). Fees are high, but they've matched Fairholme's performance since inception and I like their strategy and holdings. (But I don't own this.) And another vote for index funds.

Plus, who knows if he's refunded all the cash to his investors yet. Based on his past mistakes, I assume he's still not doing right by his clients and the lawsuit against Baupost is being paid for with client money.

Anyone follow Universal Insurance Holdings (UVE), an equity-heavy P&C insurer concentrated in Florida? The CEO and COO are in their 40s and own 34% of the company. Yoshikazu Tanaka owns around 30% of GREE (3632.JP) and is a self made billionaire at age 35. I think I'd rather invest alongside him than Zuckerberg.

Really? The argument against diversification is that having too many stocks is like having too many women because its such a negative? Given Buffett's proclivities I doubt he really believes that. Perhaps a better analogy is in order. I imagine that by age 82, the attractions of a 70 woman harem have faded quite a bit.

Damn,... I did even lurk at BronteCapital's blog after years,... because somebody here in the other HLF thread did mention it,... LOL He has similar words as Munger.... This is the hedge-fund equivalent of Stalingrad. Someone is going to lose big. And the victor will be so bloodied that the word victory will sound hollow... Of course, there's probably no truth at all to that quote. I expect both Ackman and Loeb will make plenty of money on this trade, since they both had good entry points.

Credit card and payment platforms are a great business I think. Especially Visa and Mastercard, to a lesser extent Discover, Amex, Paypal (Ebay), Square, etc. You have to pay up for V and MA, DFS is much more reasonably priced.

But if you look at it another way, shorting stocks can provide negative cost float, just like selling insurance.

He's never disclosed any position. I'd guess he had a small short position when he questioned management on the HLF conference call last year, and is not short right now.

If I wasn't repelled by the business.

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors. The majority of businesses fail in general. I agree that MLM isn't the most ethical industry, but MLM will exist. Do you really think the government would shut it down, forcing distributors to lose their livelihood and a lot of money in rapid fashion? I think Ackman is toast in this short position, partially because he brought it upon himself by creating a public circus around an investment position. Short sellers like to do this, but many of the best short sellers don't have to, and you never read about them or their positions in the news. No I don't think the FTC will shut it down. I do think they are violating GAAP and the SEC should take action. At this price and with these market dynamics, I might lean towards the long side too.

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors. They lose money because they did not execute on the distribution...an actual effort has to be made on the system package material provided to new distributors. A similar argument could be made that some universities are ponzi schemes...students pay fees to attend the university and receive their degree. What if the student has paid fees for four years, fails some of their courses and does not receive a degree? Should the educational institution be categorized as a "ponzi scheme" because the student lost money? Ironically, what about failed hedge fund managers...should their businesses be deemed ponzi schemes? As they charge 2&20 fees on other people's money, run aground, and then close their funds after realizing they will be a long ways from receiving another incentive fee. But they are at the top of the pyramid and run away with all of the fees they've generated over the years. I like Ackman some of the time, but his hypocrisy stinks big time on this one...that Target fund was one of the stupidest things any hedge fund manager has done in some time and his investors lost a bundle. Cheers! Sure, distributors lose money because they are lazy, but they also lose money because the company and its unofficial representatives lie to them about the cost structure. I don't disagree with you, there seems to be plenty of public abuse in for-profit colleges and hedge funds too.

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

My guess is that he might have bought Accenture or Infosys if he had 5 decades to get comfortable with their business, like he has with IBM.

I'd throw him in jail, just for charging 3% + 50%.

Great essay by Andrew Redleaf: http://www.whiteboxselectedresearch.com/wp-content/uploads/2012/09/WBA-Arithmetic-of-Equities-Final.pdf Buying the bond and selling the stock has been the core day-to-day business of both our convert arb and credit funds for most of their history. ... The trade of the present and perhaps the trade of the new decade is to sell the bond and buy the stock.

Very interesting. Do you have a lockup? It seems like emphasizing the lockup and a fee schedule which rewards longer lockup periods would help solve that issue.

You can have up to 35 non-accredited investors. http://www.hedgefundlawblog.com/non-accredited-investors-in-hedge-funds.html

That's pretty steep. $895 here: http://www.miramar-research.com/kits/hedge/hedge.htm

I liked the report, quite informative and professional. What do you estimate as the minimum overhead for launching a fund? I'm thinking mainly IT, accounting and legal, not rent, marketing, or your own salary.

Packer, I agree although I have limited experience in this area. Having this in your toolbox seems like it would be especially useful since you specialize in high debt companies. A good example of this working is LUTHP, it was a steal recently at 60 cents on the dollar, now back up to 88. A good example of it not working would be ATPGP. For reference, http://quantumonline.com/ - A list of all preferred, convertible preferred, etc. http://screener.finance.yahoo.com/bonds.html - Screening for distressed bonds.

Anyone familiar with Counsel Corp (CXS.TO)? Small Toronto company focusing on real estate finance and private equity. http://www.counselcorp.com/ http://markets.ft.com/research/Markets/Tearsheets/Summary?s=CXS:TOR http://markets.ft.com/research/Markets/Tearsheets/Summary?s=CRBN:QBB http://markets.ft.com/research/Markets/Tearsheets/Summary?s=TII:CVE

Your attitude probably makes you well-suited for microcaps, while mine makes me better suited for more liquid stocks. Naturally, liquidity also affects the appropriate concentration for the portfolio.