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Monday, April 30, 2012

Bill Ackman on CNBC

Bill Ackman was on CNBC today talking about a range of things.

In the first video he discusses Barnes & Noble and Burger King:

The second video he discusses Canadian Pacific and the current situation there.

In the third video, Hunter Harrison (former CEO of Canadian National) comes in and talks about the situation:

In the final video, Bill Ackman speaks about America's educational divide as well as an update to his Hong Kong dollar short.

Thursday, April 26, 2012

Corsair Capital Q1 Letter

Attached please find Corsair Capital's Q1 letter. For the quarter they were up 7.4% versus 12.6% for the S&P. Annualized since inception their return is 14.6% verus 9.3% for teh S&P 500. They walk through a brief update on their opinions on the market as well as some position updates. As per normal they include an appendix that has a write up of a current position - SunCoke Energy - SXC. They basically argue that its worth $25 versus current trading of $14.


Corsair Capital - 2012.04.24

Wednesday, April 25, 2012

Jeff Gundlach on CNBC

Jeffery Gundlach was on CNBC today where he shared his views on the market. He walked through what he thought the next logical moves for the Fed were and how this would likely play out. He even goes on to give a bit of a economics lesson to the folks at CNBC.


Thursday, April 19, 2012

GMO Capital, Jeremy Grantham April 2012 Letter

Below please find the latest and greatest from Jeremy Grantham and GMO Capital. In the letter he discusses some of his current thinking along with some interesting other musings.


Grantham Q2 Letter

Friday, April 13, 2012

Michael Steinhardt on Bloomberg

Michael Steinhardt was recently on Bloomberg discussing his opinions on the markets, etc. He then goes on to discuss how he feels the spirit is gone from Wall Street and how bonds are no place to be.


Pershing Square's Presentation on Burger King

Pershing Square via their SPAC - Justice Holdings Ltd. is acquiring Burger King and taking it public. The presentation walks through the transaction details as well as the Company's growth potential. It also goes on to walk through their potential valuation - they feel that once the merger is complete the new Burger King is worth $15 - $20 per share today and they think earnings have the potential to quadruple if they are successful on their domestic turnaround and their international expansion. So their price target is between $26 - $41 by 2016.


Thursday, April 12, 2012

Jim Chanos on CNBC

Jim Chanos was on CNBC today discussing his short on China as well as some of his other short positions. He spoke about how he is short Chinese banks and how they have been great shorts over the past few years.

In the second video Jim Chanos discusses his shorts on Coinstar (CSTR) and DEll (DELL). He is short Coinstar since digital spending in the US is declining and DVDs as a percentage are beginning to decline like VHS did. Coinstar has yet to transition to digital so they will be hurt by this trend. He also discusses how he thinks about the world and how he thinks about investing.

Tuesday, April 10, 2012

Muddy Waters short on Fushi Copperweld (FSIN)

Muddy Waters is out with their latest short thesis on Fushi Copperweld (FSIN). This is on the back of their successful campaigns against Sino Forrest, etc.

In this report they do a good job of showing where they believe fraud is occurring.


MW FraudSchool 20120410

Monday, April 9, 2012

Anthony Bolton discussing China

Anthony Bolton was recently interviewed discussing his recent poor performance and his view overall. For those who do not know Anthony Bolton he is probably one of the most successful mutual fund managers of all time - compounding at like 19.5% over 30 years. He retired from active money management then recently came back to run the Fidelity Special Situations China fund. Since launch the fund has been incredibly volatile and has been underperforming relative to expectations. Recent performance aside, he is someone who definetely earned his investing chops based on his long-term track record.


Thursday, April 5, 2012

Eddie Lampert, David Bonderman, and Barry Sternlicht on CNBC

Eddie Lampert, ESL Partners founder and Sears Holdings chairman; David Bonderman, Texas Pacific Group founding partner; and Barry Sternlicht, Starwood Capital Group chairman & CEO, were all on CBNC today discussing the economy and the impact of Richard Rainwater on the investing scene. For those who do not know Richard Rainwater I highly recommend looking him up as he is quite the investor. I personally found the third video the most insightful.


The first video has Barry Sternlicht describing who Richard Rainwater is and how he and others got to know him.

The second video is Todd Rainwater (Richard's son) discussing their family foundation and his current father's health.

The third video is Eddie Lampert, David Bonderman,and Barry Sternlicht and they discuss their history with Richard Rainwater and how they worked with him and he essentailly helped jump start their careers:

The fourth video Jim Cramer talks about Richard Rainwater's legacy:

Tuesday, April 3, 2012

T2 Partners Presentation to NYU on the US Economic Outlook

Whitney Tilson of T2 Partners recently gave a speech to NYU Business School on the outlook for U.S. economy and stocks overall. There is some decent economic data in the presentation.



Monday, April 2, 2012

Baker Street Capital - April Fool's Letter to Berkshire Hathaway

This is one of the more amusing April fools jokes I have seen (as it relates to investing at least).


Baker Street Capital Management, LLC
T: (310) 246-0345 // F: (310) 733-5695 // Email:

April 1, 2012

The Board of Directors
Berkshire Hathaway Inc.
3555 Farnam Street, Suite 1440
Omaha, NE 68131

Dear Members of the Board:

The Chairman’s 2011 Letter to Shareholders notes that the per-share book value of Berkshire Hathaway has compounded annually at a rate of 19.8% since present management took over 47 years ago. While these results are both impressive and encouraging, we are deeply concerned that they have not translated into strong share price performance during the first quarter of 2012. In fact, Berkshire Hathaway stock has underperformed the S&P 500 index by over 5% so far this year. Satisfactory long-term returns offer little consolation to shareholders who have purchased shares in recent months and whose timeframe is shorter than “forever.”

The causes of Berkshire’s lagging stock price are easily identifiable and, in our opinion, within the board’s power to fix. We urge you to consider several important changes that we believe will lead to greater recognition of Berkshire Hathaway in the investment community.

Investor Relations

Berkshire clearly lacks a robust investor relations strategy. A rigorous effort to market the Company to institutional and retail shareholders is sure to have a number of key benefits, such as increased share turnover and better earnings visibility. We call on the Berkshire board to quickly implement the best practices of its peers, including quarterly conference calls, regularly updated financial guidance, frequent marketing road shows with senior management, detailed investor presentations, and a proactive outreach program to help Wall Street analysts fully understand the Berkshire story. The good news is that it is not too late to transform Berkshire from a niche “value investment” to a much more popular market darling stock.

Capital Return and Acquisitions

We also believe that the Berkshire board should immediately reassess the Company’s capital return and acquisition policies. The absence of a regular dividend makes it difficult, if not impossible, for investors to calculate the proper price to pay for Berkshire shares. A monthly cash dividend would finally reward loyal, long-term shareholders and would be much more attractive than the recent share repurchase program, which has only served to further reduce the float and liquidity of Berkshire shares.

Berkshire has historically pursued an opportunistic acquisition strategy. While this whimsical approach may have worked in the past, a more structured process would benefit shareholders in the current environment. We urge the board to immediately retain a reputable investment bank with significant experience in mergers and acquisitions to complement Berkshire’s in-house skill set. An obvious advantage would be to enhance Berkshire’s rudimentary approach to target company valuation and compensate for senior management’s lack of financial modeling experience. All Berkshire directors should take their fiduciary duties seriously and protect shareholders from Mr. Buffett’s track record of losses stemming from questionable acquisitions, including Dexter Shoes in 1993 and a Sinclair gasoline station in 1951.


We believe that the board has conveniently chosen to maintain the status quo and ignore these critical issues in order to preserve the directors’ generous board fees, ranging from $3,300 to $7,300annually. Equally disturbing is the fact that this compensation package is not tied to quarterly or annual share price performance. As a result, the board has stood by idly as the stock price has lagged the general market during the past three months. In addition, non-executive directors own, on average, only 3,171Class A shares. Our analysis shows that directors at many of Berkshire’s peers own a much higher number of voting class shares. Given the directors’ excessive board fees and lack of economic ownership in the business, it is not surprising that the Berkshire board has fought for years to maintain a dual-class stock structure, a corporate maneuver used frequently by deeply entrenched and self-interested boards.

Any criticism of Berkshire is incomplete without a discussion of egregious executive compensation practices at the company. As disclosed in the most recent proxy, Warren Buffett received a salary of $100,000 for his services as Chairman and CEO in 2011. By his own admission, Mr. Buffett has delegated management responsibilities to more talented subsidiary company executives. More recently, he has hired investment managers to direct many of Berkshire’s public market investments. In media interviews Mr. Buffett has admitted to spending a significant amount of time pursuing his bridge gambling interests. In the absence of more comprehensive disclosures, shareholders are left to wonder exactly what role Mr. Buffett really plays at Berkshire. We believe that compensation of one hundred thousand dollars represents a significant transfer of wealth from shareholders to Mr. Buffett. We urge the board to retain professional compensation consultants to perform a thorough benchmarking study of executive remuneration at Berkshire.

Succession Planning

The Berkshire board clearly owes shareholders and the media an answer on the question of executive succession. While we seriously question Mr. Buffett’s contribution to Berkshire’s success, we feel strongly that the board should end all doubt and finally disclose its choice of Charles Munger as the successor to the Chief Executive Officer position. Mr. Munger will bring several decades of experience to Berkshire’s management team and his deep expertise in the areas of technology and solar power would be a logical expansion of Berkshire’s limited circle of competence.


Vadim Perelman
Managing Member