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Summarizing The SALT Vegas Conference: Key Bullet Points From Cohen, Dinan, Ainslie And Englander

Tyler Durden's picture





 

Save yourself the $1,000 bottle service at Tryst (not to mention the always failing Martingale strategy (unless you are the Fed or a Primary Dealer with discount window access of course) at the high rollers table), and cut right to the chase with this summary of the key points by Stevie Cohen, Jamie Dinan, Lee Ainslie, Izzy Englander and Jeremy Siegel.

 

Steve Cohen, SAC Capital: Energy ‘Interesting’ After Plunge

  • Steven A. Cohen, the billionaire founder of hedge fund SAC Capital Advisors LP, said last week’s selloff in commodity markets makes this a good time to buy stock in energy companies.
  • Energy is “an interesting sector,” he said, speaking to a packed room with 1,750 seating capacity. “I think that energy stocks are discounting oil prices much lower than where we are trading today.”
  • Cohen, who handles about 10 percent of the roughly $35 billion the Stamford, Connecticut-based firm trades, including leverage that magnifies SAC Capital’s $13 billion in assets under management, said he has started doing more macro trading in his portfolio, known as the “Cohen Account.”
  • The macro strategy accounts for about 20 percent of the money he manages, he said.Cohen, 54, has been managing the macro portion of his portfolio with Dan Tapiero, who has worked with macro investors Michael Steinhardt and Stanley Druckenmiller. “I always understood macro but now I’m heavily involved in those markets,” Cohen said.
  • Cohen said he expects the stock market to take a “pause” and that while he was optimistic about the second half of the year, forecasting a 4 percent U.S. economic growth rate, he is “worried” about the impact of rising budget deficits in 2012. “The deficit is the elephant in the room,” he said. “Either the Democrats and Republicans will get together or the markets will force a solution on them.” Cohen said he thinks the deficit is “easily fixable.”
  • He started SAC Capital in 1992 with 12 people and about $25 million after leaving brokerage Gruntal & Co., where he worked his entire career. Cohen’s track record SAC Capital, a 30 percent average annual return for 18 years, is one of the best in the hedge-fund industry. The firm suffered one annual loss since it was founded: a 19 percent drop for its flagship SAC Capital International Ltd. fund in 2008.

 

Jamie Dinan, York Capital: Bearish on Banks

  • Jamie Dinan, founder of $17 billion hedge fund York Capital Management LP, said he is bearish on financials.
  • The amount of capital banks will be required to hold, in addition to changing so many of their money making activities,” including spinning out their proprietary trading desks, will have a negative impact, he said.
  • ROE is going down and there is nothing they can do.” He said bad loans were what hurt banks during the crisis and that regulators want them to continue making those loans, which he considers a “much less attractive business model.”
  • Dinan said Wednesday that the surge in credit markets in recent years suggests lessons from the financial crisis have been “totally forgotten.”
  • Junk-bond spreads are back to where they were during the previous credit boom, and Treasury bond yields are still very low, he said.
  • There’s a lot of liquidity still on the sidelines. That money is seeping back into the market,” Dinan said.
  • People are looking for yield because they’re sick of earning zero. They’re holding their nose to the risks,” he said, adding that credit spreads can’t tighten much more.
  • “The lessons of ‘07 and ‘08 are totally forgotten,” Dinan warned. “The thinking that ‘I won’t be left behind when the music stops.’ That’s very dangerous thinking.”

 
Lee Ainslie, Maverick Capital: Likes Technology Stocks

  • Lee Ainslie, founder of New York-based hedge fund Maverick Capital Management LLC, said he is bullish on technology companies.
  • On the long side, I go back to the theme of the fact that, in this risk rally, there are large, stable multinational companies that have been left behind. Some of the most attractive opportunities in that space are in the world of technology,” he said.
  • He cited commodity and labor inflation as factors that will have a negative impact on some companies. “Corporations are clearly getting more comfortable; you’ll see it in cap-ex and R&D.”
  • Ainslie said Wednesday that risk isn't being properly priced in the stock market, partly because of the Federal Reserve's latest round of government bond purchases, known as QE2. "It will be interesting to see what happens when QE2 disappears -- to have such a big active participant withdraw."
  • "We're more focused on how that will impact individual stocks," he added. The riskiest stocks -- smallcap, higher-leveraged companies -- have been the best performers, while large, multi-national companies with strong balance sheets "have been left behind,"  Ainslie noted. If the end of QE2 introduces more risk into the market, that will probably be more conducive to trading and investing, he added.

Izzy Englander, Millennium Management

  • Englander said Wednesday the world "seems pretty fertile territory" for the relative-value type strategies that are the specialty of his hedge fund firm Millennium Management. Millennium doesn't focus on the macro economic outlook and tries to keep correlation and exposure to the market as low as possible, Englander said.
  • Instead, the firm tries to find anomalies in the value of related securities in equity and fixed-income markets. The current environment for these strategies is pretty fertile -- as it was after the 2008 financial crisis, Englander said.
  • Still, he added that there's more competition for talented traders, partly from so-called seeding firms that are willing to commit a lot of money to new hedge fund managers, Englander explained.

 
Jeremy Siegel, Professor of Finance at the Wharton School

  • Siegel said Wednesday that the Standard & Poor's 500 index may climb 12% to 15% by this time next year as corporate profits grow stronger.
  • Inflation could be in the 2% to 4% range in five years time and the Federal Reserve may start raising rates next year.
  • However, the first two years of a rising rate cycle has been good for equities in the past, he noted.

h/t David

 


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Thu, 05/12/2011 - 14:58 | Link to Comment camaro68ss
camaro68ss's picture

Are all these people doing lines at the VIP table in Tao?

How blind can you be? where do these people get there forcasts from, MSLSD? AKA MSNBC

Thu, 05/12/2011 - 15:15 | Link to Comment Smiddywesson
Smiddywesson's picture

Camaro, I thought either it went over my head or it was a late April fools joke, because their ravings seemed like, well ravings. 

Thu, 05/12/2011 - 15:29 | Link to Comment camaro68ss
camaro68ss's picture

Whatever they are smoken i want some! Ill smoke it when i watch American got talent and be happy in the land of bliss, rainbows, and fairys that grant my wishes.

 

Thu, 05/12/2011 - 22:29 | Link to Comment Thomas
Thomas's picture

Don't know about the others, but Siegel is just a complete boob.

Thu, 05/12/2011 - 15:02 | Link to Comment IMA5U
IMA5U's picture

SALT = bullish for The Rhino

Thu, 05/12/2011 - 15:06 | Link to Comment Cash_is_Trash
Cash_is_Trash's picture

Coke dealers are the real winners.

Fri, 05/13/2011 - 18:53 | Link to Comment The Real Fake E...
The Real Fake Economy's picture

love the rhino!!

Thu, 05/12/2011 - 15:05 | Link to Comment Gordon Freeman
Gordon Freeman's picture

This is worth 2 and 20??  What a load of crap--all those fucks just rode the credit expansion of the last 30 years.

Let's see their track records, when the secular bear market in everything really gets a head of steam behind it...

Thu, 05/12/2011 - 22:08 | Link to Comment rocker
rocker's picture

I think Jamie Dinan, York Capital: Bearish on Banks has it right.

Fri, 05/13/2011 - 08:20 | Link to Comment tmftdoyle
tmftdoyle's picture

you nailed it! closet levered longs, all of them.

Fri, 05/13/2011 - 08:20 | Link to Comment tmftdoyle
tmftdoyle's picture

you nailed it! closet levered longs, all of them.

Thu, 05/12/2011 - 15:10 | Link to Comment Misean
Misean's picture

Dayam! Did these clowns find the long lost Hunter S. Thompson stash?

Thu, 05/12/2011 - 16:19 | Link to Comment citta vritti
citta vritti's picture

+1 Samoan lawyer

Thu, 05/12/2011 - 15:15 | Link to Comment lizzy36
lizzy36's picture

Has Jermey Siegal every NOT said the market is going up next year by 12%-15%?

EVER?

Siegal's outlook in Jan 2008.

I believe that the stock market will do better in 2008 than it did in 2007, when it chalked up a 5.5% return, the fifth year in a row that the market went up. Year-ahead forecasts for the market are notoriously difficult, but I believe that a 10% to 12% gain is possible, on the heels of a recovering financial sector. Financial stocks plummeted about 20% last year, and this was the reason why the market had a mediocre year. Outside of financials, the S&P 500 Index had double digit returns. A revival of financial stocks would spur good market gains this year.”

 

Fri, 05/13/2011 - 00:37 | Link to Comment ProdigyofZen
ProdigyofZen's picture

As soon as I saw that Siegal belonged to the Ivory Tower aka "theory universe" I knew whatever he said next would be totally retarded. I was proven right.

Thu, 05/12/2011 - 15:15 | Link to Comment AxiosAdv
AxiosAdv's picture

It's nit-picking, but Maverick is based in Dallas.  Ainslie has had a rough year or two as well if I remember correctly.

Thu, 05/12/2011 - 15:17 | Link to Comment Silver Bug
Silver Bug's picture

What a fitting place.

 

http://ericsprott.blogspot.com/

Thu, 05/12/2011 - 15:19 | Link to Comment adonisdemilo
adonisdemilo's picture

you can be absolutely certain this lot haven't a clue

why?

they've invited Gordon fucking Brown to speak.

if you want something to short, follow that asshole, do the exact opposite of whatever he says,  he will fuck up any sound business plan.

welfare socialism at its very worst

 

  

Thu, 05/12/2011 - 15:31 | Link to Comment camaro68ss
camaro68ss's picture

o man that made me crack up! hahaha

Thu, 05/12/2011 - 15:31 | Link to Comment camaro68ss
camaro68ss's picture

DP

Thu, 05/12/2011 - 15:45 | Link to Comment TimmyM
TimmyM's picture

By Saijel Kishan
     May 12 (Bloomberg) -- Eric Sprott, chief executive officer
of Toronto’s Sprott Asset Management LP, said U.S. savers
eventually will pull their money out of banks that are carrying
too much leverage on their balance sheets.
     “If you have a fear of a banking system, you go to gold,”
Sprott said today at the SALT, or SkyBridge Alternatives,
Conference, in Las Vegas. “The dominoes are starting to fall.”
     Savers in Ireland and Greece are already fleeing from
banks, he said.

Thu, 05/12/2011 - 16:14 | Link to Comment TheMadNumismatist
TheMadNumismatist's picture

So glad you did not list Gordon Brown

Thu, 05/12/2011 - 16:25 | Link to Comment Math Man
Math Man's picture
  • Steven A. Cohen, the billionaire founder of hedge fund SAC Capital Advisors LP, said last week’s selloff in commodity markets makes this a good time to buy stock in energy companies.
  • Energy is “an interesting sector,” he said, speaking to a packed room with 1,750 seating capacity. “I think that energy stocks are discounting oil prices much lower than where we are trading today.”

OR, this is a REALLY good time to short oil.

 

Thu, 05/12/2011 - 16:29 | Link to Comment adonisdemilo
adonisdemilo's picture

@yhemadnumismatist

he's on my list, next for the fucking tumbrel

say hello Marie Antionette for me Gordon

Thu, 05/12/2011 - 16:32 | Link to Comment AldoHux_IV
AldoHux_IV's picture

Anyone who listens to or thinks Siegel has a valid opinion on anything is just about as cluess and idiotic as he is.  I'm not so sure how much Cohen's worth as well, but apparently a bunch of people in Vegas seem to think these guys are worth listening to over a lap dance and a shake of the dice at the craps table which in my opinion would yield a better ROI.

Thu, 05/12/2011 - 18:04 | Link to Comment bogey4
bogey4's picture

Say what you want, but Cohen's track record speaks for itself.  Up 30% a year on average with one down year.  Hell, I'd take that in a heartbeat. 

Fri, 05/13/2011 - 08:38 | Link to Comment harveywalbinger
harveywalbinger's picture

30% a year puts Madoff to shame.  But alas, too much juice...  Little Stevie's got TBTF

Thu, 05/12/2011 - 19:09 | Link to Comment Yen Cross
Yen Cross's picture

Vegas is the Nuclear option! The land of craters! I have pictures.

 

OK back to the Article. Houses and Energy. Am I on the epiphamal path?

Thu, 05/12/2011 - 23:50 | Link to Comment AgShaman
AgShaman's picture

Hahaha....temperamentally riddled with sound bites...it deserves immediate entrance into the Smithsonian

My fave:

"Either the Democrats and Republicans will get together or the markets will force a solution on them"....[thinks deficit is....] "easily fixable"

These "Idjuts" would hope you never seek out the avg. life span or success/survivability rates of most hedge fund managers

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