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What Happens When A Hedge Fund Hotel Explodes
Sometimes, when one desperately chases alpha at any cost, all one needs to see is a somewhat credible asset manager, in this case Bill Ackman's Pershing Square, invest a massive amount of cash in a given company, to decide to invest alongside. In this case the company is JCPenney, and the amount in question invested by Ackman being $1.3 billion (at last check his third biggest positions after GGP and CP). Usually this strategy, elsewhere known as herding, 13F chasing, or alphacloning, works, until it doesn't. In the case of JCPenney it just didn't, after the company just blew up in real time dropping a tape bomb, missing on the top and the bottom, cutting the forecast, and for good measure also eliminating the dividend. End result: Ackman just lost nearly $200 million after the stock imploded by nearly 15% after hours, and all those who blindly piggybacked along without doing their homework (such as Whtiney Tilson whose 4th largest cash position is JCP), went for the ride.
Full list of JCP holders below.
Is it finally safe to say that the artificially propped up (no mortgage payments for ever... or until a point?) consumer discretionary tide is now over? And how long before we shift from retailers to those selling other iconic fads which now have a 6-9 month product cadence and are starting to self-cannibalize? Because, shockingly, it appears that unlike the Fed, US consumers just can't print money...
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Nice crash, it is about time.
today's theme for the ol' portfoolio:
http://www.youtube.com/watch?v=PHFveRxXfM4
I think I have solved this whole European crisis thingy.
Check it:
First, the Greek PM, appearing to finally take charge of feeding his people, starts a nationwide baking campaign. Stocks go up as fear goes down. When Draghi comes looking for his money, Greek PM looks at him surprised and says, "Oh, I thought you say you want 400 Billion CHURRRRROS!" This way, Greeks can feed themselves, "print" their own money, Germans can get angry (but only temporarily, for who does not love a good churro!) and we can reflate Greece's economy with an exchange rate of 1:1 EUR/CHU (which is just about right, anyway!).
Whaddya think?
I think i want you to post more often :-)
It's not 400 Billion CHURRRRROS...it's 400 Billion Gyros. A Gyro for a Euro...makes perfect sense and gets you to that much vaunted 1:1 EUR/GYR....:)
Considering a Churro retails around a $1-1.50 and a Gyro goes for $6-10 depending on filling, I think the Churro is a closer value-the gyro would be too strong a currency for the. Under this plan the Greeks would need to import a high volume of Mexican labor to produce authentic churros, because a bad churro is worthless.
Italy's situation will be more stable when they switch to the Canoli plan, because only Italians can make a good canoli.
If weuse Soylent Green in the Gyro we can get that price down doncha think?
Only on ZH!
Yeah! Gyros make much more sense. Greek restaurants all around in Greece, right? Get all those gyro meat round cooking thingys spinning around, slice off some gyro, and done. And the Greeks could shave the gyros in smaller than regular slices, and debase the gyros just like the Roman emperors used to shave coins. One or two less slices in the gyro but keep the german tourist price the same (easy to spot the German tourists - the people wearing socks with sandals). Who would notice? A sharp knife, a careful eye - it could work! Those 400 billion gyros could be paid off with debased gyros no problem.
But can you eat it?
I'm sad I can only give you one uptick. And I'm strangely craving some sort of warm, cinammon-sugary goodness... if only there was an easily transportable food item that fit that description...
Could be the go it alone strategy that JCP is taking ? No coupons.. no sales...
Backfiring ?
well well well, who would have thunk that a company that went out of it's way to piss off 98% of their customer base would end up here? who would have thunk that a board of directors who hired an ex apple executive, who knows nothing about running a clothing store, would end up here? who would have thunk that hiring a spokesperson of the lesbian kind would drive the customers away? who would have thunk that a company that runs an ad with screaming women, even driving women away from the tv, would end up here? who would have thunk that after a poll, 67% of those polled didn't know what the company was doing with their ads, would end up here? who would have thunk that a company so hell bent on social engineering would litterly drive their customers into the waiting arms of the competition, of which there are many? well, i did and have bought my puts on these clowns running this company, sadly maybe even bankruptcy. can't wait for the action tomorrow. really tho, saddens me to see how some clown with an agenda can destroy so many jobs and peoples lives. ron johnson doesn't care he already has his!
Ron Johnson!? He was great in Miami Vice.....Oh, oh oh, you wrote Ron, not Don.....actually Don probably knows more about clothing stores
damn...i needed that!!!!!! your right don johnson could have done alot better!!!!! thanks for laughs
They should hire Philip Michael Thomas (Tubbs) as the replacement CEO. He & Don wore cool clothes. Or maybe Edward James Olmos (Lt. Castillio)? Get Jan Hammer to do the music for the commercials...
Oops. It's "Ron" Johnson.
Absolutely love this comment.
Besides the lesbian spokes model (who besides lesbians want look, dress and attract members of their own sex,; a big taboo for the earning group of young professional woman who want a man), now what makes JCP any different than Marshalls or TJ Maxx. Other than the fact that Marshalls has lots of brands and not just JCP's proprietary shitty brands (like Christie Brinkley's bomb "Sag Harbor", or" St. John's Bay")? Do people wear that shit?
When you think of JCP, everyone now thinks "lesbian wear". Its true. Look on Twitter.
If you want to dress like a Latina Fashionista, you could buy Sofia Vergara's crap at Kmart (Mexican market targetted correctly).
My point: Look at other big boxes like Best Buy and others where the same thing is happening. Digital shopping has hit the inflection point and is moving so fast that retailers and shopping center owners are not going to be able to react fast enough. Continuing to deny the trend and saying we heard it all before about online shopping is just putting your head in the sand.
And I'm sure Ellen was a discernable "blip" to their balance sheet.
You mean that Ellen chick is a lesbian? Jesus what is this world coming to
Newegg rules. No taxes either.
It is literally cheaper to whistle up Brownie to deliver to your door than to DRIVE down to Best Buy or some shit place... to get a item.
Save the gas and hassles. Click order and wait a day.
Wow Larry, you know much more about women's fashion than I do. JC Penneys is actually one of the few stores I shop at, but I buy so little in recent years that I'm probably no help for them.
They sell many home goods too, but with less households forming and with people being worse off financially, I suspect that part of their business has really dropped off.
Looks like the Million Moms Boycott of JCPenney is having an effect, though our largely-gay Mainstream Media will NEVER admit it.
Gays may make up 50% of the Media, but they are only 2-3% of the General Population. What MORON thought hiring Ellen Degenerate as the spokesman for a retail chain targeting families and children was a good idea? The media all praised and trumpeted Ron Johnson's "BRAVE!" choice of spokesperson, but I guess the CUSTOMERS didn't care for it, much.
And yeah, I know about the price changes, and the "No Sales" idea, but REALLY???
LOL@imbecile hedgefunders... I discussed JPC a few weeks ago and that the company is a dead man walking. Little by little my chosen ones come home...
Now, I ask again: who the hell "invests" in a brokeback mountain company? YOU little shits GET what you deserve!!
You ain't seen nuttin; yet!!
Is that QE I smell in the air?
Uncle Warren just bought 10 million shares of Govt Motors. So QE must not be far off.
he tends buy trying install confidence into markets, but market collapses anyway....and then he is bailed out by QE.
Uncle Warren really is in cozy with TPTB, isn't he? (but, but, he's a kindly old gentleman from Nebraska...)
A little bird told me that Ford and Trabant (GM) are, against all logic, starting to make good cars and may beat the Japanese companies in the upcoming high-mileage car scene, getting introduced into the US market. YMMV
Drop Gm, and that statement might be correct.
And hyperinflation to be met with stagflation.
More pain coming for those still holding paper. Pardon...frog being boiled slowly...people have just started to notice food prices...wait until there is no mistaking what happened at the super market.
Plant a garden is my suggestion.
The people here at ZH are all terroristic, garden-planting, chicken-keeping, gun-toting, PM-hoarding, libertarians who believe in that archaic and foolish document known as the Constitution.
Hi, I'm HoofHearted, and my government considers me a terrorist.
I'm also short the financials, so I'm the worst kind of bastard out there, according to Uncle Sugar. Yes, I know QE365 and bailouts will probably burn me, but it is only fiat. And I hope to be smart enough to get out before it all goes wrong for me. We'll see...
.
:)
I concur wholeheartedly.
Fuck that.
Libertarians are just anarchists who lack balls. They expect the big bad gummit they hate so much to help protect "their" money from the rabble.
They do so love to plot and scheme, but you can't get the better end of a deal with the devil.
No. Libertarians are anarchists who have grown up.
I used to call myself a libertarian. Then I spent a few years working with financiers.
They're wannabe "government."
Good luck with the scheming, though. I suspect you'll end up scalped like everyone else.
They'll have to find me first.
Hello, I'm one of the rabble who just happens to be libertarian.
"so I'm the worst kind of bastard out there, according to Uncle Sugar."
Funny.
"The people here at ZH are all terroristic, garden-planting, chicken-keeping, gun-toting, PM-hoarding, libertarians who believe in that archaic and foolish document known as the Constitution....."
Not that there is anything wrong with that ....
I DO NOT have any fucking chickens!
Throw in that U believe "9-11 was an inside job" & the DHS is watching U like Rockwell said.
#Winning.
Bingo, I'm here to collect.
http://www.youtube.com/watch?v=wcW_Ygs6hm0
but, what about the short squeeze cnbc promised? absolutely pathetic. but, hilarious to me:)
http://www.cnbc.com/id/47432219?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
I can't believe that link still works. You would think they would pull that bullshit story following the after hours dump.
So... The economy is on sound footing, no?
Unfortunately for JCP, their customer base, the US middle class, is doomed. Nordstrom on the top, WMT on the bottom, and Amazon to serve the niche markets.
Target, JCPenney....what's next Bill? Please let us know so we can take the other side.
didn't sears buy k-mart? I think allstate insurance and dean shitter are part of that outstanding icon, of corporate obsolescence. they're on my eventual fail list.
Yay, inFidelity is high on the list.
Then there's the poor bastards in the JCP ESOP, cuts both ways.
if cheap ass jc pen--nay cant make a buck nobody can
All mall retailers are in the process of dying. Some just don't know it yet.
JCP was only worth a buy cause the CEO came from Apple. Other than that, the company has sucked for years. I'm not sure why Ackman has been so bullish on them.
He probably didn't even walk inside a single JC Penney store or he would have known better.
Can we bring Robo back? Or just paste one of his "retail rocks" posts?
http://www.zerohedge.com/article/empire-state-manufacturing-index-plunges-comes-119-down-217-and-big-miss-expectations-1955#comment-1278638
Mon, 05/16/2011 - 08:40 | RobotTraderYet again, retailers buck off the bad news.
JCP up 7% premarket after blowout earnings.
And another horrific day for "anti-dollar" plays like big oil, gold, and foreign currencies.
--------------------------------------------------------------
Robo's Theme: http://www.youtube.com/watch?v=TT9VXxuc0LE
+1 for the video
Don't worry, I'm sure he'll make it all back on GGP!
Credible? Credible? I just don't believe it. Ackman is a total hack. Google "Pershing Square IV" if you want to see just how much of a hack he is. The results from this fantastic venture aren't included in any of his 'return calculations'. Something like a 95% loss on a $2 bn initial investment. Not to mention him coming to tears at the Target board meeting.
Anyone who fills their office with $7/oz french soap clearly does not know how to manage money. That's a consequence of Ackman being able to manage money based on who he knows, and not what he knows.
Ackman's Target Fund Gets a Royal -40.1% Beatdown in January
Whoa - he kicked in $25 mil? How generous.
Damn, TD.....that link to the old site flashed me back to my dog-eared LP album covers
I've been thinking about the phrase, "born on third base and thinks he he hit a triple" for some reason today and think it applies to your post. All these guys ride the fed wave up and think they're brilliant. It catches up with them and it's "the environment."
BINGO was his name-oh!
Its always refreshing to see someone who's got the line tied right...
>>"Anyone who fills their office with $7/oz french soap"<<
Did you smell the scented handtowels? Like hand picked lavender from the Provence! LMAO
Truth be told, 90% of these office turds need to be flushed, and flushed they will when the collapse occurs and they scower in their mansions with their familes hoping its only a nightmare...
@northman
Good of you the remember. This is the same Ackman/Pershing Square of TGT fame. He collected 2 and 20 on a fund that was invested in a single stock: TGT. No shame. No shame at all.
Yes but next time he will nail it.
Sears/Kmart/Landsend/Greatindoors won't be far behind but I would suspect that JCP will survive a bit longer than them, how much longer is anyones guess.
Sears/Kmart/Landsend/Greatindoors won't be far behind but I would suspect that JCP will survive a bit longer than them, how much longer is anyones guess.
DOnt worry the losses will be offset with gains from FB....
Hedge fund hotel? Is that anything like a roach motel?
The crazy fee structure that hedge fund investors agree to gives hedge fund managers every incentive to take huge risks with their AUM. Personally, I think the odds are better in Las Vegas. And in Vegas, you get drinks and entertainment.
Anyone know where I can find the same institutional list for the ETF, GDX? I wanna know who is long the wild ride that is miners, thanks!
Wow another Cramer pick gets it up the poop chute. Buying a company because of who the ceo is, is the dummest investment idea ever. If JCP made iGadgets that would a l east made some sense.
I don't get how the market is slowly dumping before the Facebook IPO!!! I am waiting for a week after the IPO to start shorting, DAMN YOU SALAZAR!!!
http://www.youtube.com/watch?v=lu_r0mCuwa8
Doesnt anyone who invests a billion dollars ever take a walk thru one of his investments. Or at least click on their website. If they did they would gave pulled all their money down at the next days opening bell
"...Hotel Explodes" probably tripped several alarms at NSA.
These highy paid geniuses have consistently out performed the inert barbaric relic gold, right?...
That's the stuff that doesn't earn any dividends and you can't even eat it, right?
...the stuff that keeps Charlie Munger up night as it nightmarishly sits there..inert, shiny.....yellow...
Guillotined. Next? Step right up.
But Whitney Tilson told the television shills that JCP was a buy.
With performance like that they could be a gold miner.
the cornerstone of americas' mall has fallen. what say you simon properties?
Yet, IYR is up again. JCP could be down 100% & IYR would still be up.
"you got to know when to fold'em Know when to Gold'em..." enter the casino and get ur ass handed to one and all... Hope ya'll stacking, cause I am bitchez...
As a once loyal JC Penney customer, I haven't been there since the no coupon strategy. I say it's a big bust as I was there at least once a week prior to new policy. Now I shop at Kohls who sends me coupons several times a week. Part of the problem with the no coupon policy is now I harldy receive circulars from them, therfore, out of site, out of mind.
You buy clothes weekly, and use coupons for them? I'm not being a snob or anything, I buy my clothes at costco. I just didn't believe people did that.
5 members in the family will drive you to use coupons and shop weekly, if only to browse
I can't figure out how Blackrock's "100% in" Larry Fink does it. Since he made his clarion call to arms the market has been monkeyhammered. Maybe he was talking about going 100% short...??
What Happens When A Hedge Fund Hotel ExplodesI never knew. It's hard to get a reading on something that generally happens in dark, damp, places. Perhaps they, ( hedge funds) should have hedged, some De-Con, and Raid.
I knew JC Penney was toast when I checked out their new pricing scheme. No more sales, no more seeing the markdowns on the tags, just permanent markdowns, and "best price" Fridays. Part of the experience of retail shopping for me is bargain hunting and I no longer get the satisfaction I used to when I used my coupons and looked for end of season markdowns. But then I'm one of those holdouts for looking at fundamentals, totally out of loop.
So much of JCP is wasted space. The cookware, bedware, draperies, etc., all suck ass when compared with BBBY.
checkout Sierra Trading Post for your fix
Have to admit I don't visit retail establishments very often, prefer to shop online. Amazon probably gets the majority of my business, but I check out Sierra, ebay, clearance sales at online outlets for traditional retailers, etc. My thing about online shopping is hating to pay shipping and I usually find a way around that.
Saying that, however, I am perplexed on how to support local retail since I have gotten into the habit of shopping online. Kind of like objecting to the Walmart-ization of our economy and yet shopping there for the low, low prices.
JC Penney is the only place that carries the socks I like, I headed down there yesterday, planning to snag some 40% off socks. They were approximately 80% higher in price than the last I bought them (about a year ago). The last time they were on sale. I left the store empty-handed.
uh, a bailout?
"blindly investing without doing their homework"
do you really need a Wharton MBA!!? Have you walked through a JCPenny's lately? The crap they sell in that place reminds me of the clothing and trinket stores across the border in Tijuana...just with prettier wrapper, more expensive labor and free air conditioning.
My advice...skip JCP and go straight to Goodwill or Salvation Army.
Oooh, fireworks! Pretty!
Anyone notice how IYR got sold hard on that great builder confidence news ? Very strange, In fact I'd wager insiders were using IYR as a proxy to dump/short JCP so as not to be detected. Also if you step back and look at the longer term relationship between IYR/JCP it appears that JCP tends to lead down turns in IYR. As of tonight the spread between the two is larger then it was just prior to the flash smash....
http://fiatflaws.blogspot.com/
J.C. Penney, the staid conservative U.S. retailer remodeled using the "lower-case font bright colors and a gay spokesperson" model to try to turn things around.
It didn't work - go figure.
What woman would wear clothes that are branded as "Sag Harbor"? Sorry, JCP, you had your day, now you're old, tired and senile........
TVIX & EDZ
Losses. Bleah.
A billion? cut a check to all American Adults.
Some of whom will run to JC Cheap to get the stuff and prop your stock up.
Is EKM still posting H/S?
Desperately Chasing Alpha would be a great ZH psued, if it is not already taken...
What Happens When A Hedge Fund Hotel Explodes
People get killed?
The fascist US government immediately blames it on Al-Qaeda (aka Al-CIAda)?