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Wednesday, December 26, 2012

Kyle Bass's Presentation at AmerCatalyst 2012

Below please find the video of Kyle Bass's presentation at the 2012 AmerCatalyst conference. Please click through the following link to watch the video: Video Link Overall its around an our in length but worth watching. Enjoy!

Monday, December 17, 2012

David Tepper on CNBC

David Tepper was on CNBC this morning. In his past appearances he has given some great advice that has resulted in significant alpha via overall market calls or his bullish call on Dean Foods nearly two years ago when it was around $10/share versus a recent $16.75/share. On this appearance he reiterated his advice of not fighting the fed and riding the inflation wave. Generally I agree with him on the fact that people are forgetting that in order for inflation to rear its ugly head we first need asset price inflation which we would see in stocks, etc. Given that the Fed is determined on getting the inflation rate back to its 2.5% - 3% historical standard you have a powerful friend fighting to push up stocks in the background. Enjoy.

Thursday, December 13, 2012

Jeff Gundlach / DoubleLine Presentation - To Catch a Thief

On Tuesday Jeff Gundlach and his team at DoubleLine hosted a call giving an update of his view on the market. In the presentation embedded below entitled, "To Catch a Thief" (please note the pun he is making giving his recent brush with thievery). He gives his grim assessment of Japan, US Debt, and the ability of the US Government to deal with the fiscal cliff and debt ceiling. He also touches on how student debt is now larger than outstanding credit card debt and how delinquent student loans continue to rise. Suffice it to say the price of education (especially considering the return) has gotten out of hand. Lots of interesting charts and data. Enjoy. GundlachToCatchATheif

Tuesday, December 4, 2012

Marc Lasry on Bloomberg

Marc Lasry, the founder and leader of Avenue Capital, was on Bloomberg TV today discussing his recent views on the fiscal cliff. Interesting but in my mind a real deal this year is not feasible. I think they meet with a tentative plan but it will likely be punted into 2013.

Friday, November 30, 2012

UVIC - Kyle Bass

The University of Virginia recently had their investing conference. At the conference they had a number of great speakers check out YouTube listings for all of them. Below is Kyle Bass discussing his ongoing Japan thesis: Enjoy.

Bruce Berkowitz Interview with University of Miami

Bruce Berkowitz recently sat down for an interivew at the University of Miami. While he does reiterate some of his usual shtick overall its still worthwhile. Enjoy.

Muddy Waters OLAM Research

Muddy Waters came out with their research on OLAM. They originally spoke about it at the Ira Sohn London Conference and now have unveiled the entirety of their thoughts. In an interesting twist, today they offered to pay for OLAM to have its U.S. publicly traded debt rated by S&P. I am interested to see how this plays out. While the following is long its a good example of the exhaustive type research that is needed to differentiate yourself in this environment. Enjoy. MW_OLAM_11272012

Thursday, November 29, 2012

Jim Chanos, Wesley Clark, Larry Summers, and Howard Lutnick discuss Fiscal Cliff on Bloomberg

Jim Chanos, founder of Kynikos Associates Ltd., Wesley Clark, a retired U.S. Army General, Larry Summers, of Harvard and Treasury Fame, and Howard Lutnick, chief executive officer of Cantor Fitzgerald LP, were on Bloomberg Street Smart to talk about the U.S. fiscal cliff, the economy and budget policy. Aside from the overly theatrical intro the overall content is pretty interesting. Granted there is nothing too new on this but overall its good background fodder. Enjoy.

Tuesday, November 20, 2012

Jeremy Grantham's GMO Capital Q3 2012 Letter

Jeremy Grantham and GMO Capital are out with their latest quarterly letter. In the letter he discusses how forward GDP will likely be much-much lower than it has been historically. He lays additional ground work for his long-resources thesis and why he believes they will outperform. As usual quite enjoyable. Grantham road to zero growth

Monday, November 19, 2012

Kyle Bass's Hayman Capital Q3 2012 Letter to Investors

Below please find Hayman Capital's Q3 2012 letter to investors. In the letter Kyle Bass talks about central banks debasement of currency, his opinion on the forward economy, and a very detailed overview of the Japanese pending crisis. Overall it is very enjoyable and well worth the read. Enjoy. Kyle Bass

Friday, November 16, 2012

Kyle Bass on Bloomberg

Kyle Bass was on Bloomberg today talking about the European crisis. He thinks now is not the time to invest in Europe as things will get worse before better. He thinks Germany will eventually leave the Euro (next 3 or 4 years).

Tuesday, November 13, 2012

TPG-Axon's Dinakar Singh on Bloomberg TV

TPG-Axon's Dinakar Singh was on Bloomberg TV today talking about his investing strategy and his recent activist streak. He talked about his current activist campaign at Sandridge Energy. In the next clip he briefly talks about his worry over the impending fiscal cliff and the global need for governments to contract.

Friday, November 9, 2012

Trian Partners Presentation on Danone

Trian Partners recently gave a presentation at the Invest for Kids Conference in Chicago. At the conference Nelson Peltz presented the firm's take on Danone. Hat tip to Marketfolly for posting the preso. Enjoy: Peltz-Presentation-Danone-Invest-For-Kids

Tuesday, November 6, 2012

Corvex Management's presentation on ADT

Hat tip to Marketfolly for posting Corvex Management's presentation on ADT that they gave at the Ira Sohn West conference a few weeks back. Enjoy. Corvex-ADT-Presentation

Sunday, November 4, 2012

Castle Union Quarterly Letter

Hat tip to Hunter for posting Castle Union's recent quarterly letter. For those of you unfamiliar with Castle Union it is a fund run by Toan Tran and Steve White. Q3 was their first real quarter as the fund was launched in July 2012. In the quarter they were up 5.62% net. One of their best performers in the quarter was Eagle Hospitality Preferred Stock. They go on to say that if Blackstone is able to sell of the properties that Eagle Hospitality owns at a 8% caprate it would result in a $15 stock price compard with a $5.25 close on Friday (Castle Union's cost basis is $1.95/share). They go on to discuss how they think Meru Networks is poised to be sold a multiple of gross sales resulting in a multiple of their current trading price. Overall its an interesting letter from an emerging manager. Enjoy. 2012 q3 Letter Ddic

Mary Meeker's Updated USA Inc Presentation

Mary Meeker gave a presentation at the recent Ira Sohn West conference. Her presentation focused on an update of her now famous USA Inc presentation. Embedded below is that update. Enjoy. Meeker USA Inc

Thursday, October 25, 2012

Hugh Hendry and David Einhorn at the Economist's Buttonwood Gathering

Hugh Hendry was at the Economist's Buttonwood Gathering today. In the video below he talks about how he is long gold and short gold miners. He also goes into a detailed discussion on his view on China and Japan. At around 55 minutes into the video David Einhorn of Greenlight Capital comes on to talk about the current inflationary environment. Overall the video is long but its well worth watching. Enjoy.
Watch live streaming video from theeconomist at

Wednesday, October 24, 2012

David Einhorn's Greenlight Capital's Q3 2012 Letter

Below please find Greenlight Capital's Q3 2012 letter to investors. For the quarter David Einhorn and friends returned 9.4% bringing their performance to up 13.2% for the year. In the letter he talks about his bullish position on Gold due to the Fed's unending QE process ($40B per month). They also offer additonal detail on their Green Mountain Coffee Roasters short (GMCR), their General Motors long (GM), their Cigna long (CI), and their Chipotle Mexican Grill short (CMG). Enjoy. Greenlight Capital - 2012.10.23

Julian Robertson on CNBC

Julian Robertson was on CNBC yesterday discussing his view on the economy as well as some specfic stocks. He thinks right now is a stock picker's market. He highlights Apple (NASDAQ:AAPL), Ryanair Holdings plc (NASDAQ:RYAAY), Rolls-Royce (LSE:RR), CapitalOne (NYSE:COF), and Ocwen Financial (NYSE:OCN). He thinks the steel companie are way overvalued: AK Steel (NYSE:AKS), US Steel (NYSE:X), and Japanese steels are priced for a real take-off economy which he doesn't expect. He then goes on to talk about his support for Mitt Romney for President. He briefly mentioned Facebook but said he didn't know enough to have a real position. He talks about his exposure to Chase Coleman's Tiger Global that was able to invest in Facebook years ago as a private company. Enjoy.

Monday, October 22, 2012

Keving Byun - Denali Investors's presentation on Shaw Group

Below please find Kevin Byun's and Denali Investors's presentation on Shaw Group. They make the case that Shaw's deal with CBI at $46 per share is leaving substantial value on the table. They think Shaw is worth $50 to $70 per share as a going concern and $60 to $85 per share with an adequate control premium. Overall they make a strong argument. They have even set up a website to keep folks posted on their activist progress - Enjoy.

Tuesday, October 16, 2012

Stephen Siderow Co-Founder of BlueMountain Capital on Bloomberg

Stephen Siderow, co-founder of BlueMountain Capital Management was on Bloomberg today talking about investing in corporate structured debt and his strategy for the asset class. He said one investment theme they are looking at is the broader de-risking that investment banks are looking for and that he is willing to trade against. Enjoy.

Monday, October 15, 2012

Bruce Berkowitz of Fairholme Fund on Wealthtrack

Bruce Berkowitz founder of the Fairholme found was on Consuelo Mack's WealthTrack last week discussing his concentration on financial stocks as well has his contrarion bent. Berkowitz now has 36% of his portfolio in AIG and 11% on Sears Holding. He goes on to make his case for a number of holdings. Overall its nothing new but worth listening to. Enjoy.

Tuesday, October 9, 2012

Fall 2012 Issue of Graham & Doddsville

Columbia Business School's CSIMA is out with their Fall 2012 issue of Graham & Doddsville. In this issue they interivew Joel Greenblatt, Jim Tisch (CEO of Loews), and the investment team of Royce & Associates (Charlie Dreifus, Chuck Royce, Buzz Zaino, and Whitney George). As usual its interesting to read in-depth interviews with great investors like Joel Greenblatt, Jim Tisch, and Chuck Royce. Enjoy. Graham _ Doddsville - Issue 16 - Fall 2012_vFINAL2

Friday, October 5, 2012

Bill Ackman of Pershing Square on CNBC

Bill Ackman of Pershing Square was on CNBC today discussing his views on GGP (basically a rehash of what he talked about at the Value Investing Congress). He goes on to discuss his opinon on JC Penneys (JCP) Procter & Gamble (PG) and gave some more hints about his newest short - saying when it goes out of business it is good for america. Enjoy.

Wednesday, October 3, 2012

Daniel Loeb's Third Point Capital Q3 2012 Letter

Attached please find Third Point Capital's Q3 2012 Letter to investors. In the letter they walk through their investment thesis on Murphy Oil (MUR) and AIG (AIG). Enjoy! Third Point Capital - 2012.10.03

Kyle Bass of Hayman Capital on CNBC

Kyle Bass of Hayman Capital was on CNBC today discussing debt balances throughout the world. He thinks neither side of the U.S. government will act and that will cause a further increase in the problem. They disclosed they are long a large amount of MBS securities and own around 1% of the market. He thinks housing will flatten out - he doesn't think housing will go up but it will stabilize. They also own a number of event driven situations in credit and equity and they hedge these situations with options as he believes black-scholes massively misprices convexity. He reiterates taht he thinks the most upside down market with the greatest potential is in Japan. Enjoy.

Tuesday, October 2, 2012

Presentations from Value Investing Congress

Hat tip to Marketfolly for posting all the presentations from the Value Investing Congress. Enjoy: Zack Buckley (Buckley Capital) - Short Splunk (SPLK) Buckley-VIC-Presentation

Kian Ghazi (Hawkshawk Capital) - Long Layne Christensen (LAYN) Ghazi-VIC-Presentation

Whitney Tilson (T2 Partners) - Long Netflix (NFLX), Berkshire Hathaway (BRKB), and Howard Hughes Corp (HHC) Tilson-VIC-Presentation

John Mauldin (Millennium Wave)- Discussion of Long-term Trends Mauldin-VIC-Presentation

Bill Ackman (Pershing Square) - Long GGP Ackman-VIC-Presentation

Monday, October 1, 2012

JANA Partners Presentation on Agrium

Barry Rosenstein spoke at the Value Investing Congress earlier today where he discussed their position in Agrium (AGU). In the presentation (see below) they disclose that JANA engaged with the management team back in May to discuss steps to realize the hidden value of the retail portion of the business. They lay out five ways Agrium can immediately increase value: 1. Committing to larger and more consistent return of capital going forward 2. Improving disclosure in Retail 3. Initiating a working capital and operational cost reduction plan in Retail 4. Rationalizing unallocated corporate overhead 5. Pursuing a separation of Retail and Wholesale When all is said and done they think there is $50 worth of potential value creation resulting in a ~ $150 stock price versus $100 today. Overall its pretty good analysis and reasonably compelling - especially given Jana's track record. Enjoy: Jana Partners - Unlocking Agrium's True Value - 2012.10.01

Michael Price on Bloomberg

Michael Price was on Bloomberg recently discussing his bullish stance on Apple (AAPL) and JCP (JC Penney's). He goes on to talk about Citi, JPM, and various other financials. He also thinks headcount on Wall Street will continue to drop.

Friday, September 28, 2012

Tuesday, September 25, 2012

Robert Rodriguez of First Pacific Advisors on CNBC

Robert Rodriguez of First Pacific Advisors was on CNBC today. He is fairly bearish and thinks the current Fed policy will have a number of unintended consequences that will drive the market down. He doesn't see a 3+% real GDP number and thinks the market is headed for trouble going forward.

Friday, September 21, 2012

Ray Dalio on CNBC

Ray Dalio of Bridgewater Associates was recently on CNBC discussing his view on the markets. In this video he talks about his views on QE3 and what it means for the market. He thinks QE is the new easing of interest rates. He also thinks the USD will decline in the near-term, this by extension is bullish for gold and U.S. exports. He thinks there is a short-squeeze in the USD. In this video he talks about his biggest worry being another leg down in the economies causing social disruption. He also discusses his bullish case for gold and even asserts that Buffett has it all wrong on his distate for the metal. Ray Dalio thinks people are too reactive. His view is the economy and nearly all events are fairly repetitive and that current events can be analogized with historical events therefore proper trading strategies can be devised. In his video he shares his predictions for Europe. He thinks there will be a managed depression in Southern Europe. He thinks there will be a deleveraging and destruction of debt. He thinks he Euro is likely to stay together all though in later years its more risky. He thinks the Euro is controlled by southern Europeans due to the vote of members and it will likely stay that way. He thinks a breakup would result in the northern Europeans leaving. CNBC also reports some of Bridgewater's numbers YTD and their annualized numbers which are pretty amazing to say the least. In this final video Ray Dalio talks about his concerns on the Chinese economy. Mohamed El-erian then shares PIMCO's view on China and how they will be able to navigate their slowdown (which they view as less than 6% growth).

Jim Grant on CNBC

Jim Grant was recently on CNBC talking about the Fed's continued distortion of the market and how this is skewing the debt markets (especially high yield). Not surprisingly he talks about his like for gold but he also (shockingly) talks about his bullish positioning on GM. Enjoy.

Thursday, September 20, 2012

Jim Chanos on CNBC

Today Jim Chanos was on CNBC discussing a range of things - the economy, financials, China, healthcare stocks, etc. In the first video he discusses why he is short China. We have highlighted this in the past but its nice to hear an update on their position. About 20% of their global short fund is concentrated on China. He said that non-performing loans have tripled from 2011 using Chinese accounting. He then goes in to how there is numerous issues with Chinese companies and their accounting. At the root of the thesis is the fact taht China is going through a credit boom. In the next video he talks about covering his shorts on a number of his healthcare bets. He goes into his frustration with the current healthcare system and why he was short it at the time. In this next clip he talks about why he is short Hewlett-Packard and some other financials. He thinks the PC game will continue to remain under pressure for the forseeable future. They are long Microsoft and Oracle against their HP short. He also talks about being long the deleveraging of the credit "python". He thinks the U.S. is coming out of it and they are long Citi and JP Morgan. They are short Spanish banks and Chinese banks as a hedge. Overall he thinks the market has gotten pretty expensive rather quickly. In this final clip he discusses his interest in remaining short the financials.

Wednesday, September 19, 2012

Jeff Gundlach on CNBC

Jeff Gundlach was on CNBC today. He talks about how he thinks 10 year treasury has peaked and how he thinks it will drop in yield from here. He goes on to say that China is at multi-year lows and he thinks its interesting at this point. He also thinks Apple is nearing the point of overvaluation due to the oversaturation of interest. He thinks its a good pair trade with buying Spanish stocks or LNG and shorting Apple.

Part 1:
Part 2:

Friday, September 14, 2012

Ray Dalio at Council on Foreign Relations

Ray Dalio of Bridgewater Associates recently gave a speech at the Council on Foreign Relations discussing how he views the economic machine and how he invests accordingly.

Its long but interesting and worth watching.


Thursday, September 13, 2012

Latest Memo from Howard Marks - On Uncertain Ground

Howard Marks of Oaktree Capital is out with his latest letter to investors. In the letter he says the world seems more uncertain now that at anytime in his life. Not sure how to take this but net-net stay nimble.


On Uncertain Ground

Tuesday, September 11, 2012

DoubleLine Capital & Jeff Gundlach's latest presentation

Below please find the latest and greatest out of Jeff Gundlach and DoubleLine Capital. In the presentation there are lots of interesting charts and stats on what basically is a miserable state of the federal economy.


Gundlach Mirror Mirror

Leon Cooperman on CNBC discussing Apple, etc.

Leon Cooperman was recently on CNBC and discussed his opinion on the market, economy, and some of his favorite stocks.

In this video he talks about Apple and why he maintains a position in it. Basically his thesis is Apple is growing faster than the market and yet hasa discount to a market multiple so its attractive.
In this video he talks about his positioning overall on the market. Basically he thinks the market is fairly valued and wouldn't be a big buyer at this level. He thinks Q3 will be the first down YoY quarter since June 2009 and that coupled with the tax issues makes for a rough next couple months. In this video he talks about how he feels U.S. bonds are in a bubble. He thinks they are a mispriced asset class but is not short them because of the activities of the Fed make it unprofitable - so he is in equities.

Wednesday, August 29, 2012

Marc Faber's Forecasts for the Global Economy

Marc Faber was recently presenting at the Hedge Fund World Conference in the Middle East and in the following video he gives a 45 minute presentation on where he believes the economy is headed, and what opportunities are likely to emerge for institutional investors if the sovereign debt crisis continues. He talks about the possible impact of social and political unrest in North Africa and the Middle East, and how to invest in emerging markets.


Jim Tisch on Bloomberg TV

Jim Tisch, CEO of Loews, was on Bloomberg TV to discuss his current opinion on the markets as well as to discuss a bit about Loews. Very interesting - especially because the Tisch's have an amazing legacy.

It is interesting to hear his opinion on natural gas and how he is positioned.


Jim Grant on Bloomberg TV

Jim Grant of Grant's interest rate observer was recently on Bloomberg TV discussing his opinion of the current economy and how the Fed has run amok.

Overall nothing too new but its interesting to hear his comments on Draghi's comments and the current sad state of affairs.


Thursday, August 23, 2012

Pershing Square Letter to GGP

Bill Ackman & Pershing Square sent a letter to GGP's board of directors today pushing for a sale of the company. The SEC version can be seen here. Alternatively you can read the pasted version below:
The Board of Directors
c/o Mr. Sandeep Mathrani,
Chief Executive Officer
General Growth Properties, Inc.
110 N. Wacker Drive
Chicago, IL 60606

To the Board of Directors of General Growth Properties:

As you are likely aware, Pershing Square has been one of the top two shareholders of General Growth from late 2008 to the present. We own 72,233,712 common shares of GGP, long-term warrants on 18,224,213 shares, and cash-settled swaps on 7,569,272 million shares which combined give us a 10.2% stake in the company.

Over the last four years, we have been an active supporter of GGP beginning with our work with management and the Board in connection with the Chapter 11 filing and the implementation of a bankruptcy plan and strategy that was designed to maximize shareholder value.

At every stage of the bankruptcy process, we worked to protect GGP shareholders’ interests and maximize shareholder value. This included the structuring and negotiation of the Brookfield recapitalization transaction to which we contributed $1.061 billion of capital, raised $2.6 billion of capital from the Fairholme Funds, and $500 million from the Blackstone Group. We also structured and created the Howard Hughes Corporation (“Howard Hughes” or “HHC”) and recruited an outstanding management team to run the company, which has created more than six dollars per share of additional value for GGP shareholders since the company’s emergence from bankruptcy.

Over the last four years, shareholders who have held their GGP shares alongside Pershing Square have been richly rewarded with the most successful bankruptcy restructuring of all time. Judged from the date of our initial purchases of stock in the company on November 13, 2008 at an average price of $0.35 per share, GGP shareholders have made a 77-fold return on their investment including the value of the Howard Hughes and Rouse spinoffs and dividends. As significantly, all GGP creditors received par plus accrued interest in the reorganization.

During the bankruptcy, Simon Property Group (“SPG” or “Simon”) made numerous efforts to acquire GGP at prices which would not have delivered fair value to GGP shareholders. In order to defend the company from the risk of it being unfairly expropriated from shareholders, we undertook a number of steps to maximize value for shareholders. These included a number of public presentations about the inherent equity value of the company and the potential future value of the company.1
We also undertook various actions which had an economic cost to Pershing Square, but benefitted all GGP shareholders in order to protect the company from going private at an unfair price. These included:

• providing a break-up fee at Pershing Square’s expense to induce Brookfield to provide a proposed exit equity financing for GGP, when Brookfield refused to make a proposal without compensation for fear that its proposal would be used as an uncompensated stalking horse for Simon to acquire the company,
• agreeing to waive Pershing Square’s warrant consideration as an additional inducement for GGP to choose the Brookfield-led recapitalization compared with a Simon takeover,
• spending millions of dollars of unreimbursed investment banking and legal fees for the benefit of all GGP shareholders, and
• raising $3.1 billion of third-party equity capital for the reorganization without compensation to Pershing Square.

I provide the above background so that the Board better understands Pershing Square’s approach to maximizing GGP shareholder value and to provide a useful context for recent GGP developments.

Background on the Simon Transaction
On October 13, 2011 of last year, we met with David Simon of SPG and discussed a potential transaction (the “Simon Transaction” or the “Transaction”) whereby SPG would acquire GGP for SPG stock. In the Transaction, each share of GGP stock would receive 0.1765 of a share of Simon stock. As of the close of the stock on the day prior to the meeting, GGP was trading at $12.70 per share and Simon was trading at $115.23. The Simon Transaction would have valued GGP at $21 per share, a 65% percent premium to the previous day’s close, and would have offered GGP shareholders the opportunity to receive highly liquid Simon stock consideration that could be sold at any time, or, in the alternative, cash for up to 20% of GGP shareholders.
Mr. Simon expressed strong interest in pursuing the Transaction. We were similarly supportive because we believed that the price was fair and that the combined enterprise would create more shareholder value more quickly with less risk for GGP shareholders than GGP could deliver as a standalone company.

In the Simon Transaction, shareholders would have benefited by receiving a 65% immediate premium for their shares plus an option to hold their shares and participate in the value creation of the combined enterprise, while being able to cash out in the future at the time of their choosing. We believed that SPG stock would trade up significantly when the deal was completed because the Transaction would be highly accretive to SPG, which would increase the value of the consideration to GGP shareholders who elected stock.

At the meeting, Mr. Simon asked that we discuss the proposed transaction with Brookfield to assess its interest.

On November 4, 2011, we met with Messrs. Bruce Flatt and Cyrus Madon of Brookfield to discuss the Simon Transaction. At the meeting, they indicated that Brookfield would not be supportive of the Transaction, but said that Brookfield would be interested in acquiring the company, potentially in partnership with Simon. Brookfield explained that it believed it could propose a transaction that would offer the same or superior terms as the Simon Transaction by acquiring 100% of GGP and selling certain assets to SPG for stock and/or cash to give shareholders the same choice of SPG stock or cash consideration as in the Simon Transaction.

Brookfield asked for time to analyze such a potential transaction. While they indicated that they expected to be able to respond to us promptly, they later asked for periodic extensions of time to analyze and structure such a transaction citing the potential transaction’s size and complexity. As a result, months passed since our first meeting on the topic without a proposal from Brookfield.

After completing the necessary legal, tax, and financial analysis, in April Brookfield presented a proposed transaction to Simon whereby Brookfield would acquire GGP and finance the transaction with proceeds from the sale of 68 of GGP’s malls to Simon when combined with equity capital from Brookfield and its partners (the “Brookfield Transaction”).

In order for SPG to consider the purchase of the 68 malls and obtain the due diligence materials it required, we understand that GGP required Simon to enter into a highly restrictive confidentiality and standstill agreement that, among other limitations, prevents Simon from making offers to acquire GGP or its assets for an extended period of time.

In late April or early May, we learned from Brookfield that Simon had rejected the purchase of the 68 assets on the proposed terms because Simon objected to Brookfield’s selection of assets and believed the price was too high.

Brookfield thereafter explained to us that it would now seek to acquire GGP on its own, and that it would therefore need additional time to raise the required capital to consummate a transaction without Simon. Brookfield said that, as part of a new transaction, it would consider a sale of 14 of GGP’s best assets to Simon or other potential buyers to raise some of the necessary capital.

On July 10, 2012, we met with Messrs. Flatt and Madon for an update on their progress. In the meeting, they explained that, while they were continuing to make progress on the whole company transaction, it would take additional time for Brookfield to raise the needed capital. In the meantime, they proposed an alternative series of transactions that would happen contemporaneously, namely that:

• the company’s warrant holders – Brookfield, Pershing Square, Fairholme, and Blackstone – would sell their warrants back to GGP for cash,

• GGP would acquire Aliansce stock held by Pershing Square,

• GGP would pay for the warrant purchase by consummating an equity offering,

• Brookfield would sell its shares and warrants in the Howard Hughes Corporation to Pershing Square or HHC, and

• Brookfield would use the proceeds from the HHC and GGP warrant sale to acquire Pershing Square’s GGP shares.

After outlining these transactions, Brookfield suggested that we contact GGP management to discuss the terms of a potential warrant and Aliansce share sale.

After analyzing Brookfield’s proposed transactions, we expressed concern to Brookfield about the complexity and fiduciary issues associated with the consummation of the combined transactions. We also explained that Pershing Square was not interested in selling GGP stock other than at a substantial premium.

As an alternative, we suggested that the warrant transaction be considered on its own because of the potential for it to be a win-win transaction for GGP and the warrant holders. We and Brookfield believed that the retirement of the GGP warrants and their associated dilution and warrant liability could potentially contribute to an upward rerating of GGP stock, if mutually satisfactory terms could be negotiated. Brookfield encouraged us to discuss a potential warrant transaction with GGP.
After a brief series of discussions with GGP’s management about a potential warrant transaction, we were informed that GGP did not believe it could repurchase the warrants on terms that would be accretive to GGP and acceptable to the warrant holders.
We then discussed and negotiated a sale of the Aliansce shares held by Pershing Square, which was announced last week. While one should bear in mind that we were a seller of Aliansce stock in the transaction, we believed that GGP’s purchase of the 14% of Aliansce that we owned at a modest 4% premium to market would be accretive to GGP.
The Current State of Affairs
At present, Brookfield owns 38.2% percent of GGP’s outstanding stock and holds warrants on an additional 6.4% percent of the company (or approximately 42.2% including stock and warrants, assuming the exercise of its warrants).2 It has designated three of the nine directors on the company’s board, which is chaired by Bruce Flatt, Brookfield’s CEO. This high degree of ownership and board representation gives Brookfield enormous influence over GGP; yet Brookfield is not the controlling shareholder of GGP.

At the time that Brookfield negotiated the bankruptcy recapitalization with the GGP board under the supervision of the bankruptcy court, one of the most important considerations of the transaction and one of the most highly negotiated elements of the deal was GGP’s ensuring that the sale of stock and warrants to Brookfield did not represent a sale of control.

Not transferring control to Brookfield was critically important because GGP was selling stock and warrants to Brookfield at a price that did not reflect a control premium to GGP shareholders. Because control is an enormously valuable asset that is owned by GGP shareholders, the GGP board and the bankruptcy court endeavored to negotiate protections in its shareholder agreement with Brookfield to ensure that Brookfield did not obtain control at that time nor at any time in the future without it being required to pay an appropriate control premium.

At the time of Brookfield’s initial investment in the company, it owned 24.6% of the common shares then outstanding and warrants to purchase an additional 5.8% of the company (or approximately 29% including stock and warrants, assuming the exercise of its warrants).

Since the bankruptcy, Brookfield has acquired 113.3 million shares from Fairholme, GGP has repurchased 35.8 million shares, and Brookfield has received millions of additional shares as part of the company’s dividend reinvestment program without the company obtaining from Brookfield any agreement regarding its increasing voting power.

The effect of these transactions has been to increase Brookfield’s common stock ownership of GGP from 24.6% to 38.2%, which would increase to 42.2% if Brookfield exercised its warrants. Furthermore, each quarter that GGP pays a dividend, Brookfield’s stake in the company increases due to the dividend reinvestment program and the anti-dilution features of the warrants. The increase in Brookfield’s ownership has been accelerated as a result of the recent increase in the quarterly dividend.

The Brookfield warrant anti-dilution features protect the value of the warrants by increasing the number of shares underlying the warrants and reducing the strike price each time GGP pays a dividend or completes a spinoff or other distribution. The Brookfield warrants have already been adjusted to reflect dividends paid to date and an adjustment for the Rouse spinoff, thereby increasing the number of shares underlying Brookfield’s warrants from 5.8% to 6.4% of shares outstanding.

For each quarterly dividend paid in the future and in the event of any future spinoffs or other distributions, Brookfield’s ownership interest will increase further, and the warrant strike price will be adjusted downward. As a result of the dividends paid to date and the Rouse spinoff, the strike price of the Brookfield warrants has been reduced from $10.75 to $9.69.

In summary, Brookfield has gone from owning 29.0% of the company at emergence to 42.2% today. It is only a matter of time before Brookfield de facto controls the company. This inevitability is totally inconsistent with the intent of the parties at the time the original Brookfield investment was negotiated. More importantly, if control of the company is ceded to Brookfield, shareholders will suffer enormous and irreparable harm for they will lose the ability to capture an appropriate control premium for their shares.

It is wholly unfair that Brookfield has been given an effectively unlimited period of time to confidentially consider a transaction to acquire GGP while having access to perfect inside information, and while Brookfield’s ownership stake in the company increases with the payment of each quarterly dividend, further cementing its control of GGP. This is particularly true in light of the fact that Simon, currently the most likely buyer of the company, is not being provided access to inside information, and has been effectively handcuffed and gagged from considering or proposing a transaction for which it needs no financing.

Furthermore, we understand that GGP’s CEO has been making presentations alongside Brookfield to potential equity investors to assist Brookfield in raising capital for its transaction. While we are not opposed to Brookfield having a full and fair opportunity to put together a competitive deal to acquire GGP, it should not have an unlimited and exclusive right to do so with unfettered assistance from GGP management while competitors are not offered the same opportunity.

Today’s Value of the Simon Transaction

If the Simon Transaction were consummated at the same exchange ratio as originally proposed in October of last year based on Simon stock’s yesterday closing price of $158.70, it would deliver a minimum of $28.01 dollars per share of value, a 51.2% premium to GGP’s closing price of $18.52. We note that shareholders would also receive a dividend increase of 68% when the transaction closes and own an interest in a less leveraged, more diversified company with a more liquid publicly traded stock.

Furthermore, because we believe the Simon Transaction would be highly accretive to Simon, we would expect Simon stock to increase as a result of transaction synergies, which would deliver even greater value to GGP shareholders. This potential premium represents what the value of control is worth to GGP’s shareholders.

To be clear, we are not accusing Brookfield or the company of wrongdoing in connection with the company’s potential sale. We have enormous respect for Brookfield and its principals as well as for GGP management. However, once Brookfield indicated that it was interested in acquiring the company, its interests diverged with those of other GGP shareholders. We, other shareholders, and the board must therefore take a more vigilant and proactive role in protecting our interests.
Our Request For the reasons set forth above, we hereby request that:

• The Board form a special committee of directors wholly unaffiliated with Brookfield to consider the sale of the company to maximize shareholder value.

• The special committee hire independent legal and financial advisors to permit it to manage a process that will maximize shareholder value.

The special committee permit all interested parties to express their interest in acquiring the company, provide them with access to confidential information to conduct their due diligence, without any standstill restrictions.

• GGP refrain from any future stock repurchases and prohibit Brookfield from participating in or otherwise suspend the dividend reinvestment program to prevent Brookfield from continuing to effectuate a creeping takeover of control without paying a control premium.

• The special committee also consider such other steps that it deems appropriate to level the playing field for potential bidders for the company and to ensure that control is not transferred to Brookfield.

Our Goals

Our goals are to ensure that a level playing field exists so that Simon, Brookfield, and potentially other parties can compete to acquire the company, and that appropriate measures are taken to prevent Brookfield from unfairly acquiring control of GGP without paying an appropriate control premium in a competitively negotiated transaction.

We are highly confident that a transaction can be negotiated that provides an enormous initial premium to GGP’s current market value, which also offers investors the opportunity for continued participation in the upside of ownership of the combined enterprise with the option to exit at the time of their choosing.

We note that in the event that a suitable transaction with Simon can be negotiated that is supported by the substantial majority of shareholders other than Brookfield, but for which it is mathematically difficult to get the required majority vote given Brookfield’s ownership, the Board can take steps to enable the required shareholder vote to be consummated.
I look forward to speaking further with the Board about the above.


Very truly yours,

William A. Ackman

Tuesday, August 14, 2012

John Taylor of FX Concepts on CNBC

John Taylor was on CNBC today. He basically thought that Europe is headed downward, the U.S.'s fiscal cliff is accentuated by the election and the stock market will be erractic as a result. Overall pretty interesting.


Wednesday, August 8, 2012

TPG-Axon Dinkar Singh

TPG-Axon's Dinkar Singh was on Bloomberg recently. He is still long most of the telecom stocks - remember he was recently bullish on Equinix (EQIX).

He thinks the market is currently in a dangerous place. The U.S. is up nicely this year but people have gotten scared and they are paying a lot for safety (dividends and safety). He thinks we are now in a stockpickers market - meaning asset selection really matters over sector allocation (i.e. divergence from risk on vs. risk off).

He also talks about Sirius XM (SIRI), they have a double digit FCF yield, cash is growing, John Malone is the largest shareholder, and the value is growing. He thinks they will be integrated with Liberty Media - FCF will have doubled and the value will increase materially.

On the short side he is short telecom services - as a funding short (i.e. not priced correctly but not going to zero). He is also bearish on U.S. regional banks because they will not make very much money in this low rate environment. For the global money center banks he thinks the bad news is out there and they can make money.


Wednesday, August 1, 2012

Third Point Capital Q2 2012 Letter

Below please find Dan Loeb's and Third Point Capital's Q2 2012 letter. In the letter they continue to highlight the uncertain macro environment as well as their disapointment with President Obama. They then go on to talk about their position in Yahoo!, Delphi, and Progres Energy Resources.

Dan Loeb Q2

GMO Capital - Q2 2012 Letter

Jeremy Granthan and GMO Capital are out with their Q2 2012 letter. He continue to talks about the global food crisis and how natural resources will be a beneficiary. Frankly he makes a good case for fertilizers and a number of different natural resources - provided your horizon is long-term enough.

He then goes on to talk about how the market seems poised for further declines given weakening profit margins and the shaky macro scene.

GMO Capital - 2012.08.01

Tuesday, July 24, 2012

Corsair Capital Q2 Letter

Corsair Capital is out with their Q2 2012 letter. They disclose that in the quarter they were down 2.2% net and YTD are up 5.0% net. Since inception (1991) they have annualized 14.3% net (quite impressive to say the least). In the letter they discuss their current opinion on the macro economy as well as give a decent portfolio update on their core positions (Inophos, Six Flags, Aperam, and TNS). As per usual they also include their quarterly write up on a position - this quarter the write up is on Digital Globe. They believe that Digital Globe is worth some $60/share quite interesting considering its curren trading price.

Corsair Capital - 2012.07.23

Greenlight Capital Q2 2012 Letter

David Einhorn's Greenlight Capital is out with their quarterly letter. In the ltter they reveal that they returned -3.2% in Q2 and are up 3.4% net YTD. During the quarter they revealed that they sold DELL (NYSE:DELL) and Best Buy (NYSE:BBY). Their largest positions are Apple, General Motors, Gold, Marvell Technology, and Seagate Technology. They also discuss new positions in Cigna (NYSE:CI) and Coventry Health Care (NYSE:CVH).

Greenlight Capital - 2012.07.23

Wednesday, July 18, 2012

Muddy Waters Report on New Oriental Education

Muddy Waters posted a new report today on New Oriental Education. The report sent the stock down 35% today. The company, which operates schools in China, was part of a wave of companies who did business primarily in that country but sold shares in the United States to attract new sources of capital. The report states that New Oriental is lying about the nature of its franchising operations, arguing that the company’s chief executive has denied the existing of what the report says is an extensive business.

In the report they accuse New Oriental of using fees from its franchises to inflate the cash levels on its balance sheet, thereby persuading its auditors to give it a clean bill of health. They arent the first firm to accuse New Oriental of fraud, OLP Global, has accused the company of fraud as well.

Muddy Waters Report on New Oriental Education & Technology Group

Monday, July 16, 2012

Carl Icahn on Forest Labs, Navistar, Chesapeake

Carl Icahn talks about his investments in Forest Laboratories Inc., Navistar International Corp. and Chesapeake Energy Corp. Icahn, also discusses the U.S. stock market and the outlook for corporate mergers and acquisitions.

Pretty interesting stuff.


Tuesday, July 10, 2012

David Einhorn on CNBC

David Einhorn was recently on CNBC to discuss his upcoming charitable event as well as some of his current positions. Einhorn then goes on to discuss his oped piece and the current state of the market. He goes on to discuss his bullishness on Apple (AAPL). He thinks Apple is well positioned and that he will be in it for sometime, he thinks the stock is currently meaningfully undervalued and he thinks it is a $1 trillion company.

While he doesn't say anything too insightful or controversial his comments on Apple were interesting.


Wednesday, June 27, 2012

Jim Chanos presentation at ValueX Vail

Below please find Jim Chanos's presentation from the ValueX Vail conference. In the presentation he discusses how to identify and avoid value traps. In the presentation he cites specific examples in: Consol Energy (CNX), Petrobras (PBR), Hewlett-Packard (HPQ), Coinstar (CSTR), Banco Santander (SAN SM), and Fortescue (ASX:FMG). Hat tip to Marketfolly.

A Search For Global Value…TRAPS_

Monday, June 25, 2012

George Soros on Bloomberg

George Soros was recently on Bloomberg discussion the impending European collapse and how he thinks it will play out. Overall its pretty interesting.


Friday, June 22, 2012

Michael Burry UCLA Commencement

Below is Michael Burry's recent speech he gave at UCLA's commencement. In it he discusses his fund and how he got started as well as his current view on what is likely to happen in the future.


Latest Memo from Howard Marks - Its all a big mistake

Here is the latest memo from Howard Marks.


It's All a Big Mistake_06_20_12

Wednesday, June 20, 2012

Julian Robertson on Bloomberg

Julian Robertson was recently on Bloomberg talking about the markets, hedge funds, and where he sees value. Basically he thinks there is some opportunity in Europe.


Monday, June 18, 2012

Nelson Peltz takes an activist stake in Lazard

Nelson Peltz‘s Trian Fund Management said on Monday that it now owns a 5.1% stake in Lazard, stressing that it believes the investment bank is undervalued but on the right track with its strategic plan. They give a 38-page presentation that focuses on the relative strengths of the firm, including a strong asset-management arm, a blue-chip franchise and a relative freedom from the regulatory requirements that weigh down on universal banks.

They conclude that Lazard is worth $42 in their base case, $51 midpoint, and $61 in their high case. Lazard closed today at $24.25 and are down after hours to $23.81. So if he/they are right there is some decent upside.


Thursday, June 14, 2012

Columbia Business School - 2012 Pershing Square Challenge

Below are the video recordings from this year's Pershing Square challenge. For those unfamiliar with it, the Pershing Square Challenge marks the culmination of a three-month competition among roughly forty teams of first- and second-year Columbia Business School Students. Bill Ackman, founder and CEO of Pershing Square Capital Management, launched the challenge in 2008. After an initial round of eliminations, five final teams present a stock pitch at the Pershing Square event. A panel of judges then selects one winning team, which receives $100,000 from Pershing Square. The winning team donates $50,000 of the prize to an area within the Columbia Business School, and can choose to do whatever they collectively decide with the remaining $50,000.

The judges for this year were:
William Ackman, Pershing Square Capital Management; Anand Desai, Eton Park Capital Management; Craig Effron, Scoggin Capital Management; Mark Gallogly, Centerbridge Partners; Greg Hall, Blackstone Alternative Asset Management; Phil Hilal, Kingdon Capital Management; Alex Klabin, Senator Investment Group; Craig Nerenberg, Brenner West Capital Partners; John Paulson, Paulson & Co.; Scott Pearl, Seneca Capital; Whitney Tilson, T2 Partners.

In the videos you get to hear some decent pitches as well as some interesting analysis / questions by some of the brightest investing minds out there. Enjoy.

Video 1:
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Video 2:
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