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Posted

Its amazing how much these guys copy off of each other....

 

Sequoia

Valeant Pharmaceuticals International, Inc.................................28.7%

 

Pershing Square

25.84% of Portfolio.

 

 

Then agian i own a large chunk of some of what these guys own. Hah, I'd give a left nut to be a part of one of these funds.

Posted

Its amazing how much these guys copy off of each other....

 

Sequoia

Valeant Pharmaceuticals International, Inc.................................28.7%

 

Pershing Square

25.84% of Portfolio.

 

 

Then agian i own a large chunk of some of what these guys own. Hah, I'd give a left nut to be a part of one of these funds.

 

Ackman is late to the party compared to Sequoia. Not sure when they first bought, but it was years ago.

  • 11 months later...
Posted

Thanks for posting.  :)

 

I like the part about Precision Castparts:

 

"Greg Steinmetz: For those of you who might not know, Precision Castparts manufactures turbine blades and other hard-to-make parts for airplanes and jet engines. We did our first work on this company and wrote our first memos on it in 2003. We realized that it occupied a unique position in the aerospace supply chain and that it would be very hard to get a Boeing jet off the ground without parts made by Precision Castparts. The trouble was that Precision was and is a highly capital intensive business and it operates in a cyclical industry. When you invest in something like that, we knew that we had to be careful. So what did we do? As is so often the case, we did nothing. But we did not forget about it.

Fast forward to December of 2008. Remember those good old days: Lehman Brothers, Bear Stearns. The world was melting down; a lot of investors were scared to death. I was one of them. I was hiding under my desk when Chase came to me and said, ‘‘Precision Castparts? You know about that company. It has shown up on my screen as being not only affordable because stocks are down, but it is still growing. And it is a very profitable business. Maybe you should take another look.’’

I think it was that same week Arman, who had done a bunch of work on Rolls-Royce, the engine maker, came up to me and said, ‘‘A lot of my contacts for Rolls-Royce are telling me that the 800-pound gorilla in the components business is Precision Castparts. Maybe you should take a look.’’ So we cranked up the research process again. We crunched the numbers, but it still took us about four months even though we had known the company before. But at the end of that process we discovered that not only was Precision as strong as it was in 2003, but it had gotten even stronger. So we started buying the stock.

The stock really got hurt last year when aerospace started to go through one of its slow periods and oil and gas, which is another of Precision’s end markets, got pounded when crude prices plunged. But we stayed with Precision because we knew from our research that planes still could not go up in the air without parts made by Precision Castparts; we held on and we even bought a little bit more. As you may know, the story has a happy ending. Berkshire Hathaway ended up buying the company earlier this year for about $32 billion dollars and we more than tripled our investment."

Posted

They underperformed, YTD, over 1 Year,  3 Years, 5 Years and over 10 Years. That all one needs to know. Another win for index funds. RIP

 

Valeant killed the radio star...

Posted

I'm just amazed to see that one single investment caused them to move from outperform to under perform over 1 yr, 5 yr & 10 year time frame compared to S&P 500.

 

Posted

I'm just amazed to see that one single investment caused them to move from outperform to under perform over 1 yr, 5 yr & 10 year time frame compared to S&P 500.

 

They outperformed the index over 5 and 10 years before the Valeant debacle by a narrow margin only, and lost that when Valeant lost most of it's value. Valeant was over 25% of their portfolio , so the performance impact was significant. However it is also clear that even without that Valeant debacle, they had performance issues already.

Posted

From my understanding, they purchased VRX in 2010.

 

They out peformed the index pretty nicely before the VRX drop (I think a big reason for that outperformance is VRX though). From July 2005-July of 2015, $10,000 invested in the S&P 500 would have turned into about $21,000 vs SEQUX at about $28,000. For a large cap fund that is a big difference over a decade.

Posted

Another one bites the dust.  Did anyone expect this fund to continue to beat the indexes after the founder died?

 

The staff costs alone are putting a drag on performance, and then there is the "decisions by committee" problem. 

 

 

Posted

I'm just amazed to see that one single investment caused them to move from outperform to under perform over 1 yr, 5 yr & 10 year time frame compared to S&P 500.

 

Despite having a full time analyst allocated to VRX ...

Posted

every Fund is getting killed (saw Chou's thread)... is there any mutual fund worth investing in?

 

That's pretty much the situation. Fund argument is pretty much that they will outperform eventually - when market crashes??? - but I am not aware of any funds that are clearly worth investing into with expectation of outperformance.

 

I thought a bit of getting into Sequoia this year as they opened to investors. But did not act and not sure it's worth doing it.

 

If you're bearish, it's likely better to just adjust your allocation yourself rather than invest in value fund and expect that it will do better in market downturn... Edit: OTOH with 20-40% non-stock allocation, you're likely to underperform index as well, so... you might do as well with some value fund maybe... or not... :)

 

Just my thoughts though. I may be wrong. :)

Guest longinvestor
Posted

every Fund is getting killed (saw Chou's thread)... is there any mutual fund worth investing in?

 

No.

 

The low cost index fund that eschews unneeded (frictional ) activity is the better choice.

 

I wish to see fees paid after performance. They will all run away.

Posted

is the reason they don't/won't do the fees after performance due to the 1940 investment act?

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