Joseph Steinberg (LUK/Berkadia), B.Ackman & Myron Scholes - VideoLecture (90min)

[berkshiremystery]

Here's an exceptional glimpse of intellectual talk from Jospeh Steinberg (LUK/Berkadia), Bill Ackamn (Pershing Square Capital Mgmt.) and Myron Scholes at the Polytechnic Institute of NYU. Their discussion covers everything from LUK, Berkadia, risks and black swans. The video lecture runs around 90 minutes.  Cheers!

 

http://cable.poly.edu/issue/summer-2011/news/campus-buzz/nobel-laureate-economist-myron-scholes-delivers-lynford-lecture

 

<snip>....

The presentation was followed by a panel discussion featuring Joseph Steinberg, president of Leucadia National Corporation and an NYU-Poly trustee, and William Ackman, founder and CEO of Pershing Square Capital Management LP, a hedge fund. Professor Charles Tapeiro, chair of the Department of Finance and Risk Engineering (FRE) at NYU-Poly, joined the two finance practitioners, and together the trio engaged in a lively discussion with Scholes.  ...</snip>

 

http://cable.poly.edu/sites/default/files/imagecache/img_half/inline_img/10926scr_f3a2e0269768e50.jpg

 

 

[Josh4580]

Why is Ackman & Steinberg wasting time talking to Myron Scholes

 

http://en.wikipedia.org/wiki/Myron_Scholes

 

Investment activity

In 1990 Scholes decided to get involved more directly with the financial markets and he went to Salomon Brothers as a special consultant, then becoming a managing director and co-head of its fixed-income-derivative group. In 1994, Scholes joined several colleagues, including John Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers, and his future Nobel Prize co-winner Robert C. Merton, and co-founded a hedge fund called Long-Term Capital Management. The fund, which started operations with $1 billion of investor capital, was extremely successful in the first years, with annualized returns of over 40%. However, following the 1997 East Asian financial crisis and the Russian Financial Crises the highly leveraged fund in 1998 lost $4.6 billion in less than four months and failed, becoming one of the most prominent examples of risk potential in the investment industry.

LTCM brought more problems for Scholes in 2005, when he was implicated in the case of Long-Term Capital Holdings v. United States, being accused of having used an illegal tax shelter in order to avoid having to pay taxes on profits from company investments. It was found that Scholes and his partners were not eligible for $40 million tax savings resulting from $106 million accounting losses that had no economic substance.[3][4]

Scholes is currently the chairman of Platinum Grove Asset Management, a hedge fund, which he started with former LTCM partner Chi-fu Huang. The company managed $4.5 billion and had an average annual return of 9.4 percent prior to 2007.[5] Then Platinum Grove Contingent Master fund suffered a 38 percent loss from the beginning of 2008 through October 15. The decline caused Platinum Grove to temporarily halt investor withdrawals from its largest fund.[6] He also serves on the boards[7] of various organisations, such as the Chicago Mercantile Exchange and Dimensional Fund Advisors, a pioneer of passive investing which manages $100 billion.[8]

 

 

Myron Scholes this one is for YOU..

 

[berkshiremystery]

Why is Ackman & Steinberg wasting time talking to Myron Scholes

 

I know, Steinberg,  the outstanding investor, Bill Ackman, the company stalker, together with the almost bankrupt nobel winner Scholes -- that's what someone would call a weird trio.  ::)  Hopefully Steinberg doesn't hire Scholes, my daytime naps wouldn't be so pleasant anymore.  ;D  But don't worry, just kidding. Steinberg knows that Scholes will be unable to hold a candle to him in terms of long term compounding.

[Gopinath]

Actually we cant learn much from so called Myron Scholes! So much for being a professor! Just listen to any others in the panel(Ackman & J.Steinberg)! Its unfortunate that they couldn't spend much time talking because of the talking head professor :-)

 

[scorpioncapital]

I found the lecture interesting, Scholes is an academic, I think in that realm he has some valid ideas regarding intermediation, attractors, and setpoints. Of course, it's just scientific talk to explain simple concepts like "new normal" and how the future is hard to know. I found it interesting though that he thinks alpha is a zero sum game, like beta, so many hedge funds claim to "seek alpha" and his message is that in the aggregate this is misfounded. One should seek gains in intermediation (which by the way is what LUK does as a liquidity umbrella for illiquid stakes + a tax benefit).

 

[Morgan]

Thanks for sharing the link.

 

Scholes talked far too much in the panel. It was especially interesting to watch the body language of Ackman while he listened. There were times when he heard something from Scholes and immediately thought how wrong Scholes was. He would cover his mouth or cross his legs or scrunch up his forehead or all of the above.

[twacowfca]

I found the lecture interesting, Scholes is an academic, I think in that realm he has some valid ideas regarding intermediation, attractors, and setpoints. Of course, it's just scientific talk to explain simple concepts like "new normal" and how the future is hard to know. I found it interesting though that he thinks alpha is a zero sum game, like beta, so many hedge funds claim to "seek alpha" and his message is that in the aggregate this is misfounded. One should seek gains in intermediation (which by the way is what LUK does as a liquidity umbrella for illiquid stakes + a tax benefit).

 

 

Alpha has been a statistics term before it became a financial buzzword.  It is a zero sum game in the statistical sense.