Picasso
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Posts posted by Picasso
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I track the following:
Paulson & Co filings
Whitney Tilson via KASE Capital letters on ValueWalk
Doug Kass via Twitter
Jim Cramer via CNBC articles
If there is some crossover between what I own and those guys, I am probably wrong about my thesis. I begin to doubt myself and find out why/how I am wrong. Sometimes I will short those stocks I used to own.
I have a list of the good filers, but I like to keep those to myself.... ;D
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I think a good stock no one has mentioned is RSG. I would have no problem closing trading down on that for 10 years. I was actually going to start a thread on that as Cascade has gone crazy buying up stock in the past month.
SoftBank is another one for me. The founder/CEO has a 300-year plan for the company. He can borrow cheaply and invest at attractive rates of return while having a core wireless/wireline business providing enough cash flow while you compound NAV. I saw an article today talking about the costs to SoftBank if rates rise and I started laughing. If a business can fix borrowing costs over 10-years around 1.5% and invest primarily outside of your local currency at much higher rates of return you would be a fool not to.
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This topic should be lighting up with SHLD. Quite the stubborn bunch who own that stock. They'll still be debating the super secret Eddie plan in 10 years.
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I think it is more likely that Europe always sucked and the bond market reflected it. 30-year bunds are down under 1.8% and equities shrugged it off as if it didn't matter.
You don't have 2% 30-year bonds when there is a lot of growth and any worry can cause that tiny growth to disappear. So if anything I think the big push into European equities to benefit from potential QE was misguided.
Actually, I had a post pretty much near the top of the market on this: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/naked-puts/msg189834/#msg189834
Options skew and bonds were telling a totally different story than stocks. But there have been so many false signals in the past couple years that no one really cared.
It will be interesting to see how this shakes out. We are value investors after all, so this should be extremely beneficial.
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It's not hard to tell when the market is no longer in dip mode. HPQ and EBAY both announced spin-offs, but the stocks are well below the announcement prices. Stocks beating earnings do not matter. Big buyback announcement do not matter.
This is just another big unwind of too much leverage in equities. It will finish when people throw in the towel and realize if they were wrong about interest rates, they're probably wrong about stocks too.
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Softbank.
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Does anyone know if there is a way to short FNMA/FMCC?
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I don't mind the mistakes so much. Everybody makes mistakes and in this case he's right far more often than he's wrong. It's the inaccurate track record that bothers me.
Definitely.
So shares of PSH closed at $22 from the offering price of $25. Not a bad discount if you believe in Mr. Ackman.
On a side note, when Third Point came out with their closed-end in 2007 it was pretty much top ticking the market. I wonder if we will look back and see a similar story.
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He surely has made some mistakes… Anyway, who hasn’t?
Despite those mistakes, he enjoys a great track record and has become a billionaire… I wish I knew how to make the same mistakes!! ;D
And think what he could accomplish, if he has learnt his lessons and won’t repeat the same mistakes in the future! ;)
Gio
I think you are being too forgiving. You should be one of my investors so the next time I make a mistake on the tune of losing 2 billion in Target options your response is "Can you imagine how much you will learn from this?"
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Put $2 billion in Target, lost $1.8 billion.
With less than $10 billion of AUM, he put 10% of it in a naked short position on HLF. George Soros has a tough stomach but even that guy redeemed after those shennanigans.
When everyone else is investing in the preferred, Ackman goes for the equity of FNMA and FMCC. At least he kept it under 10% of his AUM in case that one goes to zero.
Even his claim to fame in MBIA was largely due to outside forces unrelated to his original thesis. Nice to be lucky versus smart sometimes.
The bets simply get bigger and more reckless. He makes a lot of great calls but I worry about the day he is wrong on more than just a couple positions.
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The thing that rubs me the wrong way about Ackman is his promotional behavior and bets that get bigger and seemingly riskier. Eventually he is going to write a check his investors will be unable to cash and his reputation will be ruined along with much of his investors capital.
I don’t agree. And I would suggest to read [amazonsearch]Confidence Game[/amazonsearch]. Ackman is a true workaholic and I would never bet against him.
Gio
I've read it and followed Ackman for a while. It is clear that he is taking larger risks as he becomes more successful. Everyone always points to that book when Ackman takes a big stake in a lousy investment.
He does work very hard, in fact harder than most hedge fund managers so I think he earns his fees. But the risks one takes in investments does not always show up in alpha/beta and standard deviation figures.
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The thing that rubs me the wrong way about Ackman is his promotional behavior and bets that get bigger and seemingly riskier. Eventually he is going to write a check his investors will be unable to cash and his reputation will be ruined along with much of his investors capital.
His credibility is spotty when you consider Pershing set up a side fund to invest in Target options so it would not ruin the performance of his main fund. There are many instances of reckless behavior by Ackman which would preclude me from ever investing in his fund.
That said he has been able to get some pretty good inside deals for his shareholders. BKW, PAH and AGN were real value adds as being a Pershing client.
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• As of close of business on Oct. 10:
• NAV per public share as per IFRS was $24.41
“The stock is down, which is good,” Ackman said. “If it
went up we’d have sold it too low.”
Uhh, isn't this a closed-end fund with a NAV based on cash and liquid securities? How would they have sold it too low if it popped? This isn't the BABA IPO Bill.
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While you guys take crotch shots at each other, I am curious who is voting female just to mess with the poll?
I know I am ;D
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Speaking of which, check Larry Ellison's letter at http://givingpledge.org/
Makes me laugh everytime. There was no love put in it at all.
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He made his money in a flat to declining market gold market, but the gold he really discovered was the royalty business. One of the best business models ever.
You can aggregate 100 different royalty streams, sort of like a tail risk investment, and hope a couple make up for all the losers.Not sure what you really mean to say. That is not how you buy royalty streams. You aren't really buying losers.
Anyway, I am not a Lassonde acolyte, I did not like his gold book, but he is a sharp investor with a great record.
I guess what I mean is most of the royalties are not going to give above average returns. But you end up with a few (like he mentioned) that provide the lion shares of returns across all your investments.
I take back what I said, he seemed to have a good handle on what he was doing during a period of weakness in gold. I think the hardest part in investing can be to hold onto something forever. Sometimes being smart or dumb enough to hold onto something forever can make the difference between an average and above average investor.
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What are thoughts on Carney's comments that Sweeney holds Lamberth in high intellectual regard? Interesting.
Also - what are the chances the govt simply cancels the existing common and pref equity capital structure, including the Senior Pref, then IPOs F&F to the market with all proceeds going directly toward recapitalizing F&F's balance sheet?
Shhh, don't give Ackman a heart attack.
That has always made the most sense to me from the governments point of view. Reminds me of when my mom used to say "I gave you life, I can take it away too." She was dead serious at times.
I'm no lawyer so I don't understand all the lingo here. I suppose I should look at the other proposals to judge how they compare against a new F&F. While some people will say they will never invest in F&F if that happens, I suspect people will have rather short memories and capitalize it anyway. I mean new GM stock seems to have done just fine.
This is outside my circle of competence. Ignore what I said ;D
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I guess what I am saying is that EBAY is a fairly efficient stock. Icahn has been very clear with his intentions to spin-off Ebay.
So now investors get what they asked for, plus a new activist with Dan Loeb. But the stock is only up 3% on the year? 8% on this news? If the spin-off was as much of a slam dunk as everyonme wants you to believe, it should be up more.
Hell even IRM was up a lot more when they were allowed to convert to a REIT. That business is way less exciting than Paypal.
But then again one might say the market is wrong on this one and Ebay + Paypal > 57.
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Lassonde owns shares in ESL.TO.
I've read Lassonde's book on gold. It was underwhelming. It also had terrible timing... had you listened to the book and bought gold, your investment would have gone sideways for several years.
The Gold Book: The Complete Investment Guide to Precious Metals (Financial Times Personal Finance Library)
Lassonde understands very well that you can make money by selling overpriced stock to investors. To some degree he talks his book; he wants people to overvalue his company.
I never put in the work to figure out how much of his returns were due to skill and how much to luck. If Franco-Nevada didn't find gold then obviously its returns would not have been as good.
I agree, it just seems like a lot of promotion over what is a combination of luck and a massive gold bull market. Not to say he didn't have at least some element of skill in the process.
It reminds me of those internet links "12 THINGS YOUR DOCTOR DOES NOT WANT YOU TO KNOW." Really? No other natural resource CEO knows about royalities? In fact they do cost something. You can get a perpetual royalty but we are talking a very small percentage of the total production. The cost is in the inability to get more than a couple percent of the production.
You can aggregate 100 different royalty streams, sort of like a tail risk investment, and hope a couple make up for all the losers. He mentioned a couple so it seems he managed to get his hands on those.
Overall, 6/10 - IGN. Interesting fellow though.
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Bad move in my opinion. The Paypal/Ebay integration is beneficial. The two companies often have to work together to fight fraud on Ebay. I suspect that there are synergies because both companies have to spend a lot of time and effort on fighting fraud and the activities associated with doing that, e.g. customer support for legitimate customers whose accounts are accidentally frozen.
Well, the integration is beneficial for eBay -- but is it beneficial for PayPal?
Yes.
(1) The integration is win-win. More volume on Ebay is good for Paypal.
(2) Ebay forcing people to use Paypal is good for Paypal.
I guess I'm in the minority thinking that this is a bad idea. I feel like people never really bothered to understand Ebay and Paypal, their history, etc.
I think the market agrees with you. EBAY should be up a lot more today if there is that much value being unlocked through the spin-off.
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Janus has $30 billion in bond AUM, including an existing fund that Gross will step into. I agree that is nowhere near all the funds that Pimco offered under Gross.
We must have a different understanding of fund platforms. I don't see discount brokers needing to be wined and dined to add another Janus fund to the platform. Their customers will want it and if they don't provide it customers may invest directly with Janus. You also seem to be saying that most investors won't follow him to Janus but they would have been more likely if he had started from scratch. That seems contradictory.
This will be interesting to see who benefits from AUM leaving Allianz.
Discount brokers will be able to add the new PIMCO fund no problem. But do you know how difficult it is to raise over $50 billion dollars in a mutual fund? It is freaking hard even for the best managers.
Gundlach has one of the best track records out there and he pulled in about $35 billion over two years. By starting up his shop with Oaktree he adds credibility as a long-term focus (not just moving into a new fund company since there is nothing to prevent Bill Gross from jumping to another company if the culture clashes) and retains more value for himself since there is slippage as AUM leaves for other places. If he ends up with $100 billion of AUM in the next several years, it would be much more beneficial to have it under his own ownership and culture to prevent PIMCO 2.0.
I am familiar with the sales force at Janus. Let me just say it is weak and the sales force is stretched out across a very wide territory. I was never particularly impressed by them. The new Janus fund can be added to some discount brokerage platforms but how hard is it to raise over $100 billion from retail investors one trade at a time? There was "only" a total of $250 billion in the PIMCO total return fund and it was considered a foundation of most fixed-income allocations in MASSIVE retirement plans and wirehouse fund platforms.
Sorry if I seemed as being contradictory. I was more saying that from Bill Gross' perspective, he could have done exactly what Gundlach did and create much more value for himself than taking over some funds at another company. That in itself sort of tells me what the current mindset of Bill Gross is. He became a declawed, domesticated house cat at PIMCO and he is not looking to stay at the top of his game. Performance at his fund the past several years seems to agree with this as well.
At the same time he will have an easier time running in the tens of billions than hundreds of billions. He is currently a down and out manager and I wouldn't bet against him. I just don't see how that much AUM or value flows through into Janus that easily. I don't know how that relates to the current share price of JNS since it may be cheap enough to reflect the efforts of pulling in that AUM.
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Well one big issue is that Janus is not a Bond shop. It is an ok equity shop. So, they would have to open many new funds. Total return, HY, Treasury, etc. It takes time to ramp up a mutual fund shop. In the meantime people nervous about PIMCO are going to move to Black Rock, Doubleline, Fidelity, Vangaurd, etc. Remember that 401k, pensions usually have contracts and lots of admin work. So these will take time to move. But they will. Once they move, they wont be in a hurry to change again. I dont think Janus will be a big winner but Allianz surely is a big loser.
This is exactly right. It is not as simple as "we have this genius bond manager running this fund and oh by the way he is already 70 years old and we hope he doesn't croak soon." These fund platforms require a lot of due diligence, wining and dining, and the company infrastructure to handle all of this.
I am honestly surprised Bill Gross did not do what Gundlach did: approach Howard Marks to help fund the operations, provide compliance and back office support, and take a stake in the new bond shop. He left a lot on the table by not doing something like this.
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I find it interesting that Allianz has lost over $4 billion in market capitalization today, while Janus has gained about $650 million. Not that the market is efficient, but this doesn't make sense. If Gross managed 220 billion it is priced as if all of it is leaving (2% of AUM for fixed income is a reasonable rule of thumb). Not very likely. And if the outflows did occur it is assuming only 1/7 of it follows Bill Gross. That doesn't make sense to me either. If the assets are there based on Gross's track record why would 6/7 of the assets that leave go elsewhere??? So either Janus is not pricing in all the benefits or Allianz is taking an excessive beating.
There's also a factor that more of the revenue stream will likely accrue to Gross personally, to the extent that he can draw away the assets he had managed at PIMCO.
But I think the bigger reality is that tons of assets will go elsewhere - if you're an institution with a PIMCO managed separate account, you want to flee the uncertainty of PIMCO but you also can't credibly take the money to an upstart manager with little real track record in fixed income, even if it has a big name attached. So a lot of that money will wind up with other established credit managers ... BLK has added more than $1bn in market cap today.
So is Gross' departure giving justification to move assets elsewhere? To me, if someone had assets at Pimco because of Gross wouldn't they most likely move them to Janus since Gross is going there?? Why move them to LM, BEN or BLK etc.?? If someone thought those other firms/managers were better wouldn't they have already chosen them. In other words, Gross switches firms so he drops from 1st choice to 3rd or 4th. Why??
Janus share price move is implying that about $50 billion will follow if I assume 45bp in fees and 16% net profit margins.
From my experience in asset management, it does not really work this way even if an asset manager likes Bill Gross and put his clients in PTTRX.
A lot of money invested in PIMCO is through mutual fund platforms where they pick the funds based on the track record of that fund (not the manager) and they would have a difficult time putting a Janus fund with Bill Gross running it on the platform. The more likely outcome is they start getting calls from Legg Mason, Blackrock, Doubleline, etc who have funds with great track records without the Bill Gross drama. This is really paving the way for emerging bond managers at those bond shops.
Not very much of the PTTRX fund are from individual investors who are in it because they trust Bill Gross. In fact there should be some massive shifts in 401k plans as a result of this management change. All kinds of fidiciary duty issues with the plan sponsors now that there is a material shift in strategy/manager and there are other good bond funds out there.
If you add up the market cap gains of those winners and the market cap losses of Allianz, I suspect you even out pretty closely.
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Sept. 26 (Bloomberg) -- Jeffrey Gundlach of DoubleLine
Capital LP said he met with Bill Gross early last week, before
the Pacific Investment Management Co. co-founder announced his
departure for Janus Capital Group Inc.
The two money managers discussed employment possibilities
for Gross at Los Angeles-based DoubleLine, Gundlach said today
in a telephone interview. Gundlach co-founded DoubleLine in
December 2009 after being ousted from TCW Group Inc. amid a
dispute.
Gross, 70, and until today manager of the $222 billion
Pimco Total Return fund, will join Janus Capital to oversee a
new bond fund, according to a statement today from Denver-based
Janus.
Son of a gun... would have been awesome for my shares of Oaktree. Oh well...
Japan collapse
in General Discussion
Posted
Just a suggestion, but I have trouble following your post because of so many typos and a lazy writing style. It might help if you are more concise and checked for errors.