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Best Money Managers Looking Forward 15+ years


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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn. 

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

 

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

I would add that it would be like trying to pick him at the age of 7...

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Dave Waters at Alluvial Capital

 

http://alluvialcapital.com

 

Interesting. What are his historical returns like?

 

I'm not sure if he's publishing his returns or not this year.  I know they beat the pants off the market this past year, it was his first year in business.

 

If you want to see his thought process he writes at blog: http://www.otcadventures.com

 

Not that this matters, but I've told my wife is something happens to me all of our money goes to Dave to manage.  He has incredible character, really cares for his clients, and our investment approaches are similar.

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

I would add that it would be like trying to pick him at the age of 7...

 

I respectfully disagree guys.  Einhorn is in his late 40's, Kevin Byun is probably is in his 30's as is Mecham.  If you took this approach with Buffett saying Berkshire was too big in the 80's you would have left A LOT of money on the table. 

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

I would add that it would be like trying to pick him at the age of 7...

 

I respectfully disagree guys.  Einhorn is in his late 40's, Kevin Byun is probably is in his 30's as is Mecham.  If you took this approach with Buffett saying Berkshire was too big in the 80's you would have left A LOT of money on the table.

 

A long/short fund is not nearly as scalable as an insurance-based conglomerate. It's hard to run a BIG short book.

 

I don't know my answer to this question, but I wouldn't pick a full fees $10B+ long/short fund. The proliferation/institutionalization of hedge funds makes generating alpha (much less absolute returns) on the short side much more difficult than the day of old.

 

When you read FSPAOTT, you see that Greenlight was involved in things like bank demutualizations and finding frauds like Allied in small - mid cap land. It's a lot different than owning gold, apple, and shorting Chipotle.

 

Don't get me wrong I think he's great, but it is a lot harder for him ( and any other giant L/S) to kill it than in the early days.

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

The key is having the knowledge and confidence that these people are exceptional a priori.

 

If you feel that Einhorn is going to get like Buffett returns in the 80's then being rational, you have 10% or 20% or 50% invested with him? Or Mecham and Byun? if you could invest with them?

 

 

 

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

I would add that it would be like trying to pick him at the age of 7...

 

I respectfully disagree guys.  Einhorn is in his late 40's, Kevin Byun is probably is in his 30's as is Mecham.  If you took this approach with Buffett saying Berkshire was too big in the 80's you would have left A LOT of money on the table.

 

Dshachory, the key is having the knowledge and confidence a priori.

 

If you feel with confidence  that Einhorn can get the 20% returns that Brk achieved throughout the 80's, then the rational thing would be to put 10% , 20% or 50% of your money with him. Are you doing that? Same for Byun and Mecham, if you could of course.

 

 

 

 

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Dave Waters at Alluvial Capital

 

http://alluvialcapital.com

 

Thanks, is there a good article on managed accounts that someone could point me to?

 

Here is an article on SMAs at IB- a strategy that Mr. Waters seem to be implementing.

 

http://www.leighdrogen.com/the-hedge-fund-structure-is-dead/

 

I believe for mostly vanilla instruments, it makes a lot of sense. In my nascent RIA, I will be doing the same.

 

Thanks

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Carl Icahn, Joel Greenblatt, Warren Buffett

 

2 of the 3 are likely to be dead within that time frame.

 

Maybe, but maybe not.  But they are likely to outperform if they survive and you will know as soon as they die, so you can adjust your strategy.  It is a lot easier to tell if someone is dead than if they have lost their "alpha".  Also you can invest with each, even if you're a non-qualified scrub.  I like my answer.  Ok, ok Keith Meister.

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Dave Waters at Alluvial Capital

 

http://alluvialcapital.com

 

Is his strategy scalable? It works great for normal folks and he's showing he can do it with a few million but he'll end up like the endowments if he tries to scale...

 

I guess it depends on how scalable you mean.  I don't want to speak for him if you have questions you should contact him, but I believe he could handle upwards of $100m with what he does now unchanged.  If you're looking for the next billion dollar manager it's probably not Dave.

 

For the tiniest and most illiquid stuff I believe what Sonkin had ($40m) is the upper limits.  That's to essentially be concentrated in small stuff.  I've talked with plenty of managers who run hundreds of millions and own a lot of small illiquid stocks.  They're hanging around in the back of the portfolio in separate accounts and remain unreported.

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We have all seen articles if you had invested $10K with Buffett when he started it would be worth $50 MM or so today.  With that in mind, if there was just one money manager you could leave the vast majority of your net worth (minimums aside) with for 15 years or so  who would it be?

 

My top pick would probably be Einhorn.

 

 

Dshachory, those MM would be people that are starting out with very little capital. For example, if you put your money with Einhorn in the 1990s ya. But he is too big now IMHO. Sure we'd all love to know who is the next upstart. If I knew I'd be rich. But I think it is as difficult as picking the next top draft pick in the NFL.

 

I would add that it would be like trying to pick him at the age of 7...

 

I respectfully disagree guys.  Einhorn is in his late 40's, Kevin Byun is probably is in his 30's as is Mecham.  If you took this approach with Buffett saying Berkshire was too big in the 80's you would have left A LOT of money on the table.

 

Ah, I misread. Based off your first sentence, I thought you meant that you had to pick a guy who had literally just started. (No track record, etc.)

 

I would disagree on Einhorn. I think he's a fantastic investor, but it's difficult for him to continue to outperform given that he's running a $10 billion fund -- not saying he won't, but the odds are against him.

 

Both Byun & Mecham are good picks.

 

If I had to choose, I'd probably choose Mecham.

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Dave Waters here, owner of Alluvial Capital Management and author of otcadventures.com. Since Nate posted such kind words about me and my RIA, I've received a number of inquiries about separate accounts managed by Alluvial. I must say, CofB board members are exactly the kind of clients I like best: those with a deep understanding of value investing and a truly long-term perspective. Since I started Alluvial in early 2014, returns have been strong: a little over 15% for the nine months ending December 31, 2014. Of course there's no telling what the future holds, but I believe that disciplined value strategies focused on micro-caps and other obscure stocks will continue to pay off well for investors in the long run. My strategies are not infinitely scalable, but I'm a long way from having to shut my doors to new clients and capital.

 

I'm awful at self-promotion and even writing what I did above makes me uncomfortable, but if anyone would like to know more, my e-mail is dave.waters@alluvialcapital.com and my website is alluvialcapital.com. Thanks.

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