Everything (all 110 slides of it) you wanted to know about the GSEs but were afraid to ask... (with Bill Ackman's biased long perspective)
From 110 slides of Ackman-inspired Fannie Mae bullishness to Tudor-Jones "Central Bank Viagra", and from Jim Grant's "Buy Gazprom because it's the worst-managed company in the world" to Jeff Gundlach's housing recovery bearishness and "never seeing 1.5 million home starts ever again"... there was a little here for every bull, dick, and harry at the Ira Sohn conference. Perhaps noted behavioral psychologist said its best though: "be careful about the quality of advice you get."
For 18 years, the Ira Sohn Conference has enabled hedge fund managers to pitch their best long (and short) ideas to the rest of the investing public. This year's speakers include Bill Ackman, David Einhorn, Jeff Gundlach, Jim Grant, and Paul Tudor Jones. Listen carefully, trade accordingly, but bear in mind the following table when judging just how masterful of the universe these guys really are...
Ackman's Year Of Living Dangerously Get Worse - The Herbalife Timeline (Audit Complete With No Material Changes)Submitted by Tyler Durden on 12/16/2013 16:21 -0400
UPDATE: Herbalife is halted for the following news:
- HERBALIFE COMPLETES RE-AUDIT FOR FISCAL '10 '11, '12
- HERBALIFE NO MATERIAL CHANGES TO 2010, 2011 OR 2012 FINL
Which opens the doors for the substantial buyback they have planned. We suspect one can hear a pin drop in Pershing Square's headquarters.
Herbalife has re-opened up 9% over $75 on very heavy volume - It seems Ackman's "end of the earth" bet may take a little longer...
This week marks the one-year anniversary of Bill Ackman’s 342-page slide presentation at the Ira Sohn Conference in NYC. At that time he publicly disclosed his $1 billion short bet against Herbalife (HLF), accusing the company of being a pyramid scheme and claiming its stock was destined to fall to zero once regulators stepped in. As everyone knows, HLF shares plummeted, losing nearly half their value in the three days after the presentation. The market’s initial response did not last, and HLF is up about 160% since its 12/21/12 low of $26.06 (vs S&P 500 +24%). Pershing Square’s public campaign has taken many forms, as Barclays outlines below...
For all those curious why all real money managers (and not those who spend 18 hours a day on the modern day Yahoo Finance known as Twitter, "trading" with monopoly money while selling $29.95 newsletters) are furious at what Bernanke and company are doing as shown in the most recent Ira Sohn conference, we present the chart below from Goldman which confirms what most have already known: the Federal Reserve has made hedge funds a thing of the past, whose investors are sure to keep underperforming the S&P until the moment when it all goes tumbling down.
While Paul Singer, Kyle Bass, and Stan Druckenmiller got the headlines, there were in total 14 worthwhile speakers at yesterday's Ira Sohn conference. Though many of the themes were unsurprising, it is nonetheless useful to compare your own views to those of these professional money managers, many of whom are now bludgeoned daily by the 'idiot-maker' rally... of course, that is, until they are proved 100% correct.
Today's star-studded Ira Sohn conference was led by two behemoths - Elliott's Paulk Singer and Hayman's Kyle Bass. We recently discussed in detail Paul Singer's perspective on the "most dangerous" investing environment but today he summarized and added to those comments at the Ira Sohn conference. "There is no safe haven in today's markets," he explained, "those holding long-term bonds in US, UK, and Japan own assets that are trading at the wrong price," and went on with more brutal honesty, QE causes a distorted recovery - financiers doing well, ordinary person not experiencing recovery. Kyle Bass also stuck to the script noting that in Japan "mindsets are changing - the beginning of the end has begun," and exclaiming in his subtle and forthright manner, "you have to be shitting me, you're adding a ponzi scheme to a ponzi scheme." We leave the summation up to Singer, "the ultimate question for a fiat money regime is at what point does confidence in money disappear?"
The overnight economic data dump started in China, where both exports and imports rose more than expected, at 14.7% and 16.8% respectively, on expectations of a 9.2% and 13% rise. The result was a trade surplus of $18.16 billion versus expectations of $16.15 billion. The only problem with the data is that as always, but especially in the past few months, it continued to be completely made up as SocGen analysts, and others, pointed out. The good data continued into the European trading session, where moments ago German Industrial Production rose 1.2% despite expectations of a -0.1% drop, up from 0.6% and the best print since March 2012. The followed yesterday's better than expected factory orders data, which also came at the best level since October. Whether this data too was made up, remains unknown, but it is clear that Germany will do everything it can to telegraph its economic contraction is not accelerating. It also means that any concerns of an imminent ECB rate cut, or a negative deposit rate, are likely overblown for the time being, as reflected in the kneejerk jump in the EURUSD higher.
When Mary Meeker, formerly of pre-IPO bubble analyst fame, released her "USA, Inc." presentation last year, which assayed the US government as if it were a corporation, her conclusion was simple: the country is broke, and can not continue along the path it is on now. Fast forward to today, when the US debt balance is over $1 trillion higher, and the next edition of Mary Meeker's presentation which she released at last week's Ira Sohn conference. Her conclusion: the US is now broke-er than ever.
Now that the Ira Sohn conference has become a worthless hypefest, in which everyone and their kitchen sink is invited in a desperate attempt by hedge funds to offload positions put on ages ago to witless alphaclone chasers, the real "idea dinners" are few and far between. One such remaining one, which unlike others does not seek to publicize its positions to every retail investor, is that held by Monness Crespi, in which very select hedge funds are invited. Below we summarize the stock picks from last night's dinner. We are not at all surprised to find FaceBook already making enemies.
S&P 500 e-mini futures closed at their day-session lows, below yesterday's day-session lows, and heading for overnight lows rapidly - once again giving up some decent early gains amid much heavier volume into the close. Markets were a mess today. Risk-assets in general had the highest intra-correlation in a long-time - with FX, credit, rates, curves, and stocks moving in almost lockstep all day (up then down). Equities were smashed left, right, and center by comments from the Ira Sohn conference (as it seems people have given up reading hedge fund 13Fs) with Einhorn's comments in particular showing up just how fragile and thin the real liquidity picture is so many stocks. Silver plunged just after the European close (margin/collateral calls?) and dragged the rest of the commodity complex down with it as stocks basically turned on a dime after hitting yesterday's closing VWAP this morning. Treasury yields rose and plunged in the same pattern - ending the day marginally lower than overnight low yields at the long-end but marginally higher at the short-end (post FOMC minutes). Financials were the worst performer again, down around 1.5%, with the majors in particular now starting to catch up to credit market's long-held conviction on these names (with MS -10.5% YTD and BofA plunging today but still +27.8% YTD). Gold remained relatively stable getting a lift post-FOMC (along with silver as the inevitability of QE was clear - but an equity plunge necessary before it can occur) - though we note the Gold/Silver ratio is now unch YTD. Credit markets are not done worrying yet - and that weighed on JPM (-2%) as IG9 pushed above 150bps offered for the first time this year and HYG (the high-yield bond ETF) collapsed along with HY credit spreads. Still doesn't feel capitulative as overnight nerves for Greece remain high.
Here are some of the things that David Einhorn likes and does not like, having just started his speech at the Ira Sohn Conference:
- Martin Marietta - stock plunges 10% and triggers circuit breaker.
- France - "a french default is not out of the question" - France not limit down yet. He says that a return to the Franc is not out of the question.
- Einhorn likes GJF.NO - "Norway is the only country which can finance itself."
- Einhorn likes Cairn Energy as it trades at discount to assets in just Britain and India.
- Says China is misunderstood and is not an investment opportunity: not enough money to feed the economy and banks aare becoming illquid; money is leaving the country
- Also does not like Japan for all the usual Kyle Bass and Andy Xie reasons. The Yen will continue strengthening.
- Einhorn likes AMZN, calls it "elephant in the room", but questions profit growth.
- Einhorn likes Dena Co, and Gree Inc in Japan
- Einhorn is short DKS
- Einhorn, who is long about $870MM AAPL as per last night's 13F, likes AAPL. Stunner.
Today begins the 17th annual pilgrimage of hedge-funders near and far to the Ira Sohn conference, where some of the "best and brightest" share their top picks with everyone else in an attempt to generate a buying (or shorting) frenzy and more hedge fund hotel traps. Sadly, this is what to many passes for alpha these days. Yet does the Ira Sohn conference actually lead to any outperformance? Well, Absolute Return has compiled the 1 year return of the recommended investments from last year's conference. The results are absolutely abysmal. Which makes us wonder if the time of groupthink has peaked, and instead the time to fade absolutely everything to come out of such conferences, where analysts pretend to do homework by piggybacking on others' often times very, very wrong research, and which confuse beta expansion with alpha, has come.
The following note from Caris & Co. on HLF (which launched Herbalife in September at a Buy and a $75/share PT) has got to be the worst sell side note in history. The catalyst, according to the firm: what David Einhorn may or may not say. Now that is true value added. Next up: Goldman goes long IBM because it flipped heads.
For anyone deluding themselves that alpha still exists apart from beta, and can be generated sans "expert networks", we bring you the top stock picks from the Ira Sohn's San Francisco conference hosted last night. We will bring more detail shortly.