Bill Browder: The Type Of Innovator The Fund Industry Needs
“What’s my unique comparative advantage with all these other people that are all so smart, and all so good, and all so ambitious… and I thought, ‘Well I’m a businessman. But I am also the grandson of the head of the Communist Party.’ And it just so happened that 1989 was the year that the … Read more
Tempurpedic Cannot Possibly Be Worth Its Current Price
I think I did an OK job of preparing for the January effect, as we had no sizable shorts going into the new year. However, there are two investments that have cost more than 300 basis points of performance. One of them is Tempurpedic (TPX). Bulls are downplaying the competitive pressure from Serta’s iComfort line … Read more
The Canadians (Not RIMM) Have Made A $50 Tablet Computer
Tatemae (façade): http://blogs.wsj.com/speakeasy/2012/01/08/the-inside-story-of-indias-50-computer-tablet/ Honne (truth): http://indiatoday.intoday.in/story/kapil-sibal-cheapest-tablet-of-world-aakash-failure/1/167730.html It’s $50, BUT… The screen is 7 inches. When will people realize this is dumb? http://stableboyselections.com/2011/11/08/according-to-steve-jobs-would-argue-that-the-kindle-fire-will-be-dead-on-arrival-ill-put-some-money-on-it/ The battery lasts 3 hours. The screen isn’t multitouch. There’s 2GB of internal storage. The processor is too slow. I think the Apple thesis is largely intact. Apple devices still have the highest … Read more
Interesting Things About Soros From Vic Niederhoffer
“Soros told me once that he lost more money selling short than on any other speculative activity. My experience is similar.” “Boasts about great successes are a giveaway on someone’s insecurity. When I was good in squash, I didn’t go around telling the whole world about it. ‘My racquet will do the talking,’ I’d say. … Read more
Now That Most Chinese RTOs Have Blown Up And Most Apple Competitors Have Been Vanquished We Have To Go Somewhere Else For Alpha.
A couple days ago I talked to two fund managers who earned net returns to investors of over 200% in 2011! In each of the previous two years, they returned over 80%. Most of this outperformance came from shorting US-listed companies based in China. The managers write in their letters that future returns are very … Read more
This Sears Trade Is Really Annoying Me: The Bonds Look Interesting
Last week I mentioned selling SHLD January $37.50 puts for $4.50. They last traded at $8.22. At one point on Thursday they traded above $9. That’s a loss of 90-100%. Fortunately I limited my notional exposure to under 5%. So the loss is less than half a percent of the portfolio. I’m not happy about … Read more
Mattress Firm Should Provide More Details To Investors
I hold a short position in Mattress Firm (ticker: MFRM) because it offers multiple ways to win: 1. The business of selling mattresses is a time bomb for everyone except IKEA and Nebraska Furniture Mart. Virtually every mattress retailer has been through some form of reorganization or outright bankruptcy. After 25 years of operation, Mattress … Read more
Who’s The Sucker In The Markets Today? Are There Enough Of Them To Feed The Hedge Funds? Steve Crist: The Suckers Don’t Bet On Horses As They Used To
“Twenty years ago, if you made your own speed figures [a method of standardizing horses’ running times for comparison, popularized by noted handicapper and Washington Post columnist Andrew Beyer ’65] and followed horseracing closely, you had a real edge over the majority of the public. But now, so many of the bad gamblers–the people who … Read more
Window Dressing In Illiquid Stocks. BZC, IBA, SFL, CRP.TO, BR.TO All Up Around 2% On A Down Day? Obviously Not A Coincidence. Window Dressing CDS Marks.
A couple weeks ago I pointed out the underperformance of VN Capital, a New York-based fund with a good overall track record. I recently went long virtually every one of their holdings at prices substantially lower than their cost basis. What I did not mention is that there tends to be end-of-the-quarter, end-of-the-day window dressing … Read more
FML! Trades I Missed But Shouldn’t Have In 2011: Saratoga Resources & FBNK
FML! I missed a 40% gain in SARA because I never took this report seriously: We are initiating coverage of SARA with a Market Outperform rating and a $9.00 target price. SARA is a small-cap E&P company whose asset base is concentrated on the marshes and shallow waters of the Louisiana coastline. The stock is … Read more
Hedge Fund Performance in 2011: It Validates the Efficient Market Hypothesis; Greenlight Capital Did OK… The Results Are In
The Barclay Hedge Fund Index ended 2011 with a 5% loss. http://www.barclayhedge.com/ The only strategies–asset classes–that worked were bonds and shorting stocks. Treasurys gained about 8% on the year. That would have been inconceivable a year ago. I remember running into a floor trader who told me he had a levered long position in TBT. … Read more
Rumor That David Einhorn Is Long DMND; Off Wall Street’s Disclaimer; Seth Klarman On Inside Information
http://www.thestreet.com/_yahoo/story/11360255/1/einhorn-rumor-drives-diamond-foods.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA I wonder who started this rumor. If true, this would be pretty weird. Greenlight Capital has had a subscription to Off Wall Street for a long time, and they often take the same positions. Off Wall Street put out a recommendation to SHORT DMND earlier this year (they have since closed the position, though). … Read more
Fischer Black & Mike Burry on Volatility: Beware of Geeks Bearing Formulas; Listen to a Geek Who Made Mucho Dinero
I’ve been reading Fischer Black’s academic papers from the 1970s. His view of volatility is drastically different from my own. Black believed that the historical volatility of an underlying stock was one of the major inputs that determined the “correct” price of an option. I think this is crazy. If Berkshire Hathaway shares were to … Read more
iOS 5 Jailbreak: Another Reason to Buy the iPhone
http://lifehacker.com/5871248/untethered-ios-5-jailbreak-now-available-for-all-non+a5-devices
SHLD Becomes an “Ick” Stock, or more appropriately a “Larry King” stock
“Another issue I have with this sort of thinking is probably best summarized by the word “Ick.” Ick investing means taking a special analytical interest in stocks that inspire a first reaction of “ick.” I tend to become interested in stocks that by their very names or circumstances inspire an unwillingness – and an “ick” … Read more
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