The manager of the best hedge fund in 2009 explains The Barnegat Fund's strategy, and how it is both similar to and different than the most infamous hedge fund blow up of all time, Long Term Capital Management.
As Facebook nears it's IPO, the buzz is deafening. One can hardly go a week without hearing an updated valuation based on the price that shares have been trading on a private exchange.
Enter Warren Buffett, the value guru who famously eschews technology. For example, check out Berkshire Hathaway's website
Bloomberg: Warren Buffett, the billionaire stock picker and takeover specialist, said investors should be wary of valuations for social networking websites as some of the industry’s biggest startups prepare for initial share sales.“Most of them will be overpriced,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said today... ”It’s extremely difficult to value social- networking-site companies,” he said, without specifying companies. “Some will be huge winners, which will make up for the rest.”
Paul Kedrosky concurs in Dear Warren: Here are the Overvalued Social Networking Companies
As an investor, I love the academic research on "anomalies" (aka how to make money investing). Furthermore, as a reformed accountant I appreciate the accrual anomaly. That is, companies that incur large amounts of non-cash revenue under-perform, and those that have large non-cash expenses out-perform.
For a more in depth discussion, click here.
Legendary investor Victor Niederhoffer discusses the phenomena here, which is a great blog he runs.
From CNBC: Activist Investor Phillip Goldstein, Bulldog Investments co-founder, explains why he sees opportunities in SPACs (special purpose acquisition corporations).
A great book for any investor's education is Value Investing: From Graham to Buffett and Beyond. The author is Bruce Greenwald, Director of the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School. In other words, he is the a successor to Ben Graham, the father of value investing.
In the video below, Bruce lectures a class on a balance sheet approach to valuation. For an extensive interview with Bruce by Steve Forbes, click here.
For a recent interview with Greenwald by GuruFocus.com, click here.
Bloomberg: Guggenheim Partners LLC, the closely held investment bank and asset manager, plans to hire as many as 150 staff being pushed out of banks’ proprietary-trading units because of U.S. financial rules enacted last year...
Guggenheim Global Trading has already hired staff for some technology, legal and administrative functions and is in talks with trading teams, Katzovitz said. The new business, to be set up as a multistrategy fund investing Guggenheim’s own money, plans to hire 20 to 25 trading teams, he said.
This article could be subtitled the "The power of high water marks and performance fee's".
From DealBook: The company’s pretax distributable earnings, which do not include the expenses associated with going public in 2007, nearly tripled in 2010 to $372 million, or 72 cents a share...As of last quarter, nearly all of the funds managed by Fortress had surpassed their so-called high-water marks, which meant the firm could begin charging incentive fees for profits generated. That translated into $170 million in incentive fees from Fortress’ hedge funds, from $16 million in 2009. Private equity credit funds earned six times their 2009 levels, grabbing $158 million in fees. Fees for rest of the private equity portfolio increased 13 percent to $41 million."