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Noted short seller and hedge fund manager Bill Fleckenstein was interviewed on Bloomberg TV a couple of days ago. He touched on the topics of JP Morgan and financials in general, along with his view of the European dilemma.
Fleckenstein had been quoted as saying he wouldn’t buy JP Morgan if a gun was put to his head before the recent trading losses were exposed.
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Julie Creswell of The N.Y. Times writes about the challenges facing pension funds in a low return world. Apparently the managers of these funds are increasingly turning to alternatives including high fee hedge funds.
Creswell contrasts the $26.3 billion Pennsylvania State Employees’ Retirement System with Georgia’s $14.4 billion municipal retirement system. The Pennsylvania pension fund has bet the house on riskier alternatives with 46% of its assets in 400 private equity, venture capital and real estate funds. Georgia’s state law prohibits alternative investments.
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Charlie Rose interviewed Seth Klarman, one of the most successful hedge fund managers (Baupost Group) of our time, earlier this month. Klarman wrote the book ‘Margin of Safety,’ now out of print, but which can be found at Ebay for $1,000 – $2,000 (incidentally, many years ago I bought the book for around $5 at a closeout book sale and sold it for $600 on Ebay about 5 years ago).
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The Economist has exposed the hedge fund complex as a major disappointment for their investors. Even with the market down they’ve been struggling to match the index averages during this miserable period.
A recent standout to the downside has been John Paulson, hailed a genius for profiting immensely from the real estate downturn in 2008. As of August 5th, his Advantage Plus fund was down 31% for the year and its probably gotten worse since then. Paulson was reportedly a big holder of Hewlett Packard (HPQ), an extremely poor performer year-to-date and a huge loser today.
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