Neo-Alpha

Pershing Square's Presentation on Canadian Pacific

2012-02-10T16:34:00.000-08:00

Hat tip to Markefolly for finding this. Pershing Square is out with their presentation on Canadian Pacific. It is quite detailed and worth looking through. He is taking a much more public and detailed approach than simply filing a 13D with a letter. He thinks the stock could be worth $140/share which is up from today's close of $74.63. So basically he thinks its a double from here in three years time, provided they get the right operator. Ackman is proposing an entire slate of directors to change the course of the company. Considering his success at Wendy's, McDonald's, General Growth Properties, Alexander & Baldwin, and of course JC Penney's.

Interesting stuff to say the least. Enjoy.

Pershing Square - 2012-02-06 - CP

T2 Partners January 2012 Letter

2012-02-10T16:21:00.001-08:00

T2 Partners is out with their January 2012 monthly letter. For the month they returned 12.6%. Suffice it to say Whitney Tilson must be thrilled after a disasterous 2011. They were led by gains in NFLX, PBY, GS, REXI, and JCP.

The letter briefly discusses JCP and NFLX in the appendix.

Enjoy.

T2 Accredited Fund letter to investors-Jan 2012

Case Studies from Bruce Berkowitz of Fairholme Fund

2012-02-06T16:16:00.000-08:00

In preperation for their big investor Q&A call on Wednesday. Bruce Berkowitz of Fairholme Fund has put out two case studies discussing why he thinks AIG and BAC are undervalued. He basically thinks they are worth more than 2x their current respective trading values.

Enjoy. (Note if for some reason you can see both and you are using Internet Explorer switch to Chrome or Firefox and you will be fine).

BAC:
120201 - Case Study I (With Disclaimers)

AIG:
120201 - Case Study II (With Disclaimers)

Corsair Capital Q4 Letter

2012-01-31T13:54:00.000-08:00

Corsair Capital is out with their Q4 letter (hat tip to Marketfolly for posting). In Q4 they were up 6.3% net and for al of 2011 they were down 3.7% this stands in stark contrast to their annualized return since inception of 14.4% (they were started in 1991 so its a pretty stellar track record).

Corsair-Capital-Q4-2011

Corsair also included a write up of one of their favorite positions - Aperam (APMA NA). Aperam are a stainless steel manufacturer that Corsair thinks offers 200% upside potential. Aperam was spun off from Arcelor Mittal and Corsair thinks they are worth somewhere in the neighborhood of $38-$63.

Enjoy.

Corsair-Aperam-Thesis

Bill Ackman on CNBC

2012-01-26T11:07:00.000-08:00

Bill Ackman of Pershing Square Capital fame was on CNBC yesterday to discuss his opinion on JC Penney's new plan as well as his position in Canadian Pacific. He also talks about what he thinks the issues at Sears are and where Eddie Lampert has failed. He then described in detail his plan on Canadian Pacific and how he plans on increasing value.

Enjoy:

George Soros on CNBC

2012-01-26T11:04:00.000-08:00

George Soros was on CNBC today discussing his concerns with the pending European crisis. He thinks that Germany has dictated too much of the current terms. He thinks the Euro could break if they financial system of each country becomes more self contained. He thinks Germany is pushing the wrong policies (austerity) as it is creating a deflationary spiral.

Enjoy.

Kerrisdale Capital - Sahm Adrangi - Q4 2011 Letter

2012-01-23T12:42:00.000-08:00

Below please find Kerrisdale Capital's Q4 2011 Letter. For those who are unfamiliar with Kerrisdale, they are led by Sahm Adrangi. The fund launched in July 2009 and was one of the first funds to start exposing chinese reverse-merger frauds. This clearly suited them well as they were up a staggering 198.3% in 2011. Since inception they have generated gains of 588% or an IRR of 103%. The letter includes a nice write-up on why they are now long Apple (NASDAQ: AAPL).

Enjoy.
Kerrisdale Quarterly Letter 12-31-11

Ken Griffin - Citadel Q4 2011 Letter to Investors

2012-01-20T14:15:00.000-08:00

It appears that Citadel has finally recovered above their high water mark. In 2008 the firm had a staggering 50% losses. But slowly and surely the fund has recalimed these losses. In 2011 they returned around 20% (pretty good considering the market). The letter is a little lovey-dovey and light on good intellectual nuggets.

Kenneth Griffin's year-end letter to investors

Andrew Feldstein of BlueMountain Capital on Bloomberg

2012-01-19T12:38:00.000-08:00

Andrew Feldstein, head of BlueMountain Capital Management, was on Bloomberg to talk about the role of credit derivatives in financial markets. For those who are not familiar with Andrew, he worked at JPM (he was head of structured products) before founding BlueMountain. Since founding BlueMountain has been incredibly successful - he was among the highest paid hedge fund managers in both 2010 and 2011. In 2010 they returned around 9% from trading CDS and CMBS. In 2011 the credit fund (as of October) was up 3.3% and the long/short group was up around 9%.

He currently sees opportunities, with borrowers who previously relied on the securitization market. He thinks there is a real opportunity to provide capital to these borrowers that no longer have access to capital.

Enjoy.

Craig Effron of Scoggin Capital on Bloomberg

2012-01-19T12:27:00.000-08:00

Craig Effron of Scoggin Capital was on Bloomberg today. He discussed some of his current positions as well as his thoughts on CDS. Scoggin likes the asset managers in the U.S. He thinks the rate of return on bonds is so low that pension funds etc. will need to put money into alternative assets in order to meet their obligations. The act of reaching for higher yield/returns should push up AUM in the publicly traded alternative asset managers (think Blackstone, Apollo Group, KKR, Och-Ziff, Fortress, etc.).

For those who aren't familiar with Scoggin, they were seeded by Paul Tudor Jones and have had really good returns.

Enjoy.

Greenlight Capital Q4 2011 Letter

2012-01-18T08:53:00.000-08:00

For the year Greenlight returned 2.9%, 2.7%, and 1.9% across their various funds. They have annualized 20% net of fees since inception. In the letter he discusses the European crises, some of his short positions (FSLR and GMCR) and his position that he shares with Kyle Bass on the weakening of the Japanese Yen. He also goes on to discuss Dell and Xerox is some detail.

Enjoy.
Greenlight

Tom Brown of Second Curve Capital discussed Citi's earnings

2012-01-17T08:41:00.001-08:00

Tom Brown of Second Curve Capital was on Bloomberg today discussing Citi's (NYSE: C) earnings release. He disclosed that he is long both Citi and Bank of America (NYSE: BAC). He think that the discount to book value is too great and that the capital markets in Q1 have improved such that the trading revenue will likely be better next quarter.

For those not in the know, Tom Brown was the head of the financials groups at Tiger Management back in the 90s with Julian Robertson. When Tiger shut down he went out on his own. He has a pretty good track record despite getting pretty beat up in 2008.

Enjoy.

Boaz Weinstein of Saba Capital Management on Bloomberg TV

2012-01-12T10:55:00.000-08:00

At the end of 2011 Boaz Weinstein, founder of Saba Capital Management LP, was on Bloomberg TV talking about his strategy for Europe and credit relative value investing. He talked about how Europe will be the main focus for the markets in 2012. He thinks Italian debt above 7% is attractive relative to the equity markets and the corporate debt market. He then spoke about Greek CDS and what value he sees there. Overall its a pretty interesting and rather rare interview with Boaz.

Enjoy.

Bloomberg Markets on Most Profitable Hedge Funds of 2011

2012-01-10T10:38:00.000-08:00

Bloomberg Markets is out with their annual 100 Top Performing Hedge Funds of the year. For 2011 they claim the champion is Chase Coleman of Tiger Global who returned 45% followed by Renaissance Technologies with their Institutional Equities fund that returned 33.1%. The overall data is pretty interesting and they do a fairly in depth summary of Chase and Tiger Global discussing their current strategy as well as their history.

Enjoy.

Bloomberg Markets Magazine the Worlds 100 Richest Hedge Funds February 2011

T2 Partners Year End Letter

2012-01-10T08:42:00.000-08:00

T2 Partners is out with their year end letter. For the year they were down 24.9%. They make the argument that they think their underperformance is a temporary phenomenon and they will likely snap back quickly. In 2012 they should be a bit happy that NFLX, which they were formerly short but then turned around and became long on, has run up something like 25% YTD.

He then lists out his largest long and short positions. Appears he is a big bull on JC Penney (JCP) and Citi. Interestingly Ethan Allen is their largest short - they have not discussed this yet publicly.

Enjoy.

Tilson Full Year

Pershing Square Letter to Canadian Pacific Railway

2012-01-09T13:48:00.000-08:00

For those who haven't been reading the news as of late there is a pretty interesting fight going on up north between Bill Ackman of Pershing Square Capital and the CEO and Board of Canadian Pacific Railway ("CP"). Bill Ackman thinks CP is undervalued and has taken a large ($1B) stake backing up his conviction. He has proposed a new CEO and a potential board shakeup to close the gap between intrinsic and trading value. The Board at CP didn't like this rebble rousing and sent him a letter. This is his response to that letter.

Enjoy.
77078248-Pershing-CP-Jan3-2012

Jeff Gundlach / DoubleLine Slides

2012-01-05T15:38:00.000-08:00

Today Jeff Gundlach of DoubleLine had a conference call giving his outlook on the market and economy. As always it was fairly enjoyable. Most interestingly he said he thinks gold will pull back over the next few months and he is fairly bullish on the dollar. I read that as saying he is bearish on the Euro and their situation. So as the world derisks they will move risk dollars into American securities (debt, equities, etc.).

During the talk he went through a powerpoint presentation that had some pretty interesting slide. This can be seen below. It is worth clicking through if you have a couple minutes to spare.

Enjoy.
1-5-12_JEG_Just_Markets - FINAL JEG

Jeff Gundlach on CNBC discussing his positioning

2012-01-05T10:30:00.000-08:00

Jeff Gundlach of Doubline was on CNBC today discussing his fund and his views. He discussed his views on long-term debt as well as how he views his fund and why he thinks indexing in bonds is horribly flawed.

Enjoy.

Jim Rogers on CNBC

2012-01-03T11:08:00.000-08:00

Jim Rogers was on CNBC earlier today talking about how he is buying the Euro (quite the contrarian play considering all the bearish sentiment). Rogers also made a case for why he thinks the Swiss Franc will have a good run in 2012 as the Yen and Dollar lose confidence as reserve currencies. He also thinks that the Swiss Central Bank’s attempts to keep the currency from strengthening above 1.20 against the euro — moves aimed at protecting Swiss exports — will ultimately fail (this point was particularly interesting as it has the potential for large overnight moves i.e. Pound Sterling in early 90s).

Enjoy.

Reuters interview with David Einhorn

2011-12-21T10:47:00.000-08:00

I recently read a good interview that Reuters had with David Einhorn (of Greenlight Capital fame) where they discussed in detail his Green Mountain (GMCR) thesis. He makes it sound as if he is still short (this despite the initial massive 40%+ drop and subsequent rally).

The full interview can be found here.

Here is an excerpt of my favorite parts:

REUTERS: Which of the issues you raised in your presentation do you believe Green Mountain has answered so that you would change them?

EINHORN: "Actually, I think everything we said in the presentation is as right now as it was then -- and in many cases even more so. Some of the things we pointed out, like the inexplicable sales of K-Cups in the June quarter, have now been revealed to have been very valid concerns and the rest remain unanswered. And some of them are things will have to sort of play out in the future like the competition."

REUTERS: Management says that fourth-quarter sales were hurt by wholesale orders, and do not indicate any accounting issues. In other words, you were right, but for the wrong reasons. Were you surprised by the earnings miss?

EINHORN: "The thing about an investment like this is that there are really a lot of ways for us to come out well because the risk-reward for the stock is so poor. And there are so many problems that they don't all have to hit at the same time in order for us to get a good result. In terms of what actually did cause them to miss the quarter? It was largely a sales miss, which seemed to follow from the unexplained sales spike that we highlighted in the presentation."

REUTERS: Management stated, "Though disappointing, we take the recent allegations of misconduct seriously. Our Audit Committee has reviewed the allegations and we are confident there is no misconduct. There is no wrongdoing." What is your response to this?

EINHORN: "Simply saying that you take allegations with misconduct seriously does not mean that you actually take the allegations of misconduct seriously. In other words, their response came only about three weeks after the presentation and there was an enormous amount of material that if somebody was going to take the material comment seriously, they would have to review. It doesn't seem to make a lot of sense to me -- or even be possible -- to think that somebody who took our concerns seriously would even be able to review it in three weeks. As a result, it kind of feels like a whitewash to me. The question at this point, since the company wasn't able to give any substantive answers to the most serious of the questions that were raised -- they instead deferred to a general statement from the audit committee -- the question now becomes whether the audit committee itself is part of the problem as opposed to being a part of the solution."

REUTERS: One of your concerns was that Green Mountain couldn't explain its capital spending. When the company announced earnings, it detailed its capital spending for 2011 and 2012 by category. What did you take away from that?

EINHORN: "I actually think the extra information led further support to our view that the capital spending is unlikely to be going for the purposes that Green Mountain says that they are. In the sense that when you break out the spending, they broke it into various categories.

"For example, they say they are spending $225 million this coming year on portion packs. By our calculation, that would be enough to add approximately 15 billion K-cups of annual capacity. And yet the company only needs to add about 4 billion cups of capacity. So there is a rather large delta there. But the clearest one of all (involving Green Mountain's capital spending) actually is the manufacturing facilities where they said that they are going to spend $175 million. They said the big pieces of this are at their expansion in Virginia and in Ethics, Vermont. We went into the various property records and the building permits relating to these kinds of expansion and we were only able to total in those properties -- and actually including another property in Waterbury, Vermont -- we were only able to find about $50-60 million of capital spending on the pieces that they say are the biggest pieces of the $175 million facilities and infrastructure spent.

"All of this adds together to leave us with the view that it is very unlikely that they have an adequate explanation for where approximately $665 million of capital spending can reasonably go to support the growth of this business."

REUTERS: After Green Mountain announced earnings, there were a raft of insider purchases. Is this a bullish signal for the stock?

EINHORN: "This is something that we see in a number of these types of positions, where when there is an effort by a management team to promote the stock they go and get a large number of insiders to make what we call nominal purchases or to use a term of art to 'paint the tape.' But what's interesting here is that you have a team where they've literally sold stock in the hundreds of millions of dollars -- and are buying back stock in the hundreds of thousands of dollars.

"In the more clear example of this, Michael Mardy (Director) sold 20,000 shares for $97.48 on August 5, 2011. He purchased 1,000 shares for $43.36 on November 14, 2011. David Moran (Director) sold 10,000 shares for $98.50 on August 5, 2011. He purchased 1,180 shares for $42.17 on November 14, 2011." (A Green Mountain spokeswoman said the August insider sales were part of a previously arranged share selling program.)

REUTERS: What's fair value on Green Mountain stock?

EINHORN: "I don't think there's any way to know for sure what the fair value is. When I think about this company, I think about the cash flow that it generates. And right now, the company should be in a fantastic position because it still has the monopoly on the ability to make K-cups. And despite that, the company has no cash flow from operations and has substantial capital spending. So it seems to me that a business that doesn't generate any cash -- and this is before the monopoly position on the K-cups disappears next September -- if you don't generate very much cash, it's hard to understand why there is a large value."

Michael Platt of BlueCrest Capital on Bloomberg

2011-12-15T12:58:00.000-08:00

Michael Platt the founder of the $30B hedge fund BlueCrest was on Bloomberg today. It was a very interesting interview. He talks about the potential for a Euro zone breakup. They dont see anything at the policy level that gives them confidence that the overleveraged nations won't default. According to him, if Italy has to pay rates between 5% - 7% the situation is unsustainable. He thinks the market is steadily increasing the odds of a Euro zone breakup and going forward it will only get worse. He thinks most of the banks in Europe are insolvent if they took on mark-to-market practices simliar to what hedge funds are forced to do. He advocates buying US Treasuries and German Bunds. He is sticking with the short end of the maturity curve. He thinks we are on the eve of a potential crash that could be worse than 2008. Overall it is very interesting and worth watching the 14 minute interview.

December Letter from Kyle Bass

2011-12-15T12:40:00.000-08:00

Below please find the December letter from Kyle Bass. For those who have followed the site, this is the letter that Marc Faber was referring to yesterday.

The letter takes a fascinating look into collateral chains and how it will lead to the restructuring of sovering debt.

Enjoy.

Hayman Capital Letter Dec 14

Kyle Bass on CNBC

2011-12-14T12:29:00.000-08:00

Kyle Bass was on CNBC recently. In the interview he discusses his views on the EU and echos many of the sentiments that he talked about in his Q3 letter (can be found here). Enjoy.

Dan Loeb / Third Point letter to Yahoo!

2011-12-14T06:50:00.001-08:00

Dan Loeb and Third Point are out with their latest letter to Yahoo!'s board opposing any notion of a minority investment. Below is the full letter. Enjoy.

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Mr. Roy Bostock, Chairman

Dear Directors:

Third Point LLC, as the beneficial owner of 5.2% of Yahoo! Inc.’s (“Yahoo”) outstanding shares, remains extremely troubled by news reports regarding the dysfunction and inequity being exhibited in the process of maximizing stockholder value that the Board is allegedly “managing”. We are disturbed but not surprised by this mismanagement given the history of strategic bungling by Yahoo Board Chairman Roy Bostock and Founder Jerry Yang, which has been chronicled in our previous letters and in numerous critical media and analyst reports. As significant shareholders with our own fiduciary duties to investors to uphold, we cannot stand by silently if such reports are accurate and Yahoo, a company in no need of cash, plans to engage in a sweetheart PIPE deal which will serve only to entrench Mr. Yang and the current board while massively disenfranchising public shareholders and permanently robbing us of the opportunity to obtain a control premium.

We are not alone in our concerns. Shareholders, analysts, and the media are questioning the integrity of the process currently underway. As stewards of our assets you are charged with a duty to place stockholder interests above personal gain or other motives. In order to allay the concerns and uncertainty permeating the marketplace and provide much needed transparency on the supposed “process” that Yahoo is undertaking, we ask that you immediately make public the letter(s) in which Yahoo invited third parties to make proposals for the Company (the “Process Letters”). We assume that Yahoo’s Process Letters did not place any artificial restrictions on the proposals that the Yahoo board was willing to consider in its search for strategic alternatives, such as discouraging, or even prohibiting, bids to purchase Yahoo in its entirety.

Of course, we appreciate the need for confidential negotiations, and therefore stockholders need not know at this stage who received the Process Letters. Rather, stockholders should simply be allowed to see if the Process Letters, which may be published in redacted form, are consistent with the Board’s paramount duty to maximize stockholder value. Additionally, Third Point does not seek and does not expect to receive material non-public information and thus requests that you file such letters publicly with the Securities and Exchange Commission via Form 8-K with all deliberate speed.

In light of the serious, timely concerns expressed by nearly all Yahoo stakeholders and interested parties, undertaking this action is the only fair and reasonable thing to do.

Very truly yours,

Daniel S. Loeb
Chief Executive Officer
Third Point LLC
390 Park Avenue
New York, New York 10022

Marc Faber on Bloomberg

2011-12-08T14:04:00.001-08:00

Marc Faber was recently on Bloomberg where he discussed his views on the Euro and the global economy. Needless to say he reiterates his bearish views and stresses the importance of holding some gold.

Enjoy.