35 Burst results for "Hedge Fund"
"hedge fund" Discussed on BiggerPockets Real Estate Podcast
"The park with one house instead of trying to own thousand or ten thousand houses honestly they wayne hughes who started public storage and then americans rent and just died recently became one of the richest men in the country probably on real estate and when he came up with the idea for american and said i wanna find. I don't wanna find the house gonna find the tenant. First and then i and find the house they want and so he decided the best tenants would be families with kids. 'cause then want to move you don't want to disrupt your social life for education. If the rent's gonna go up five percent you just pay it right and you want earners because higher can pay rent. your kids sick or you. Your car has trouble. You don't miss hours at work. If you a certain level then come insert job keeping you miss those sort of tragedies that chip away at lower earners so he sort of and other people followed this as he designed. He found the people that he wanted to to. Generally speaking Demographic socioeconomic class and then bought the houses that they would want to live in. So you think of that person that family four you know outside phoenix and it's the house at the all american three bedroom. Two bath enclosed garage. Good school system park down the street. And what is happening in these markets. You know if you are living in this market or you're an investee in one of the market. How does a big institutional investor coming into one of these markets alter the dynamics of that particular area so we haven't really seen them come wholesale into a new market and several years. I did a story a few years back when they sort of found nashville right. National didn't have a lot of foreclosures pretty steady but it was a boomtown right in. There is a suburb. South of national. Springhill i don't know if you remember the old saturn car commercials from gm in like the eighties. It's a car tom. There's an auto factory i nap. Business was coming back. There's a lot of hiring a lot of people coming from michigan in ohio who had underwater houses at home had rant where they were moving to work and sort of all these big investors there house hunting algorithm sort of pointed them. Here's a place to buy in very rapidly. They bought something like seven or eight percent of all. The houses.
Renaissance Hedge Fund Execs to Pay $7B in IRS Settlement
"Simon's and robert mercer along with current and former executives of hedge fund. Renaissance technologies will personally pay as much as seven billion dollars in back taxes interest and penalties to settle a long-running dispute with the internal revenue service a tax settlement. That may be the largest in history simon's who started renaissance before retiring as the firm's chairman. On january i will make an additional quote settlement payment of six hundred seventy dollars according to the firm. Mr simon's will also pay back. Taxes related to his
Daos, NFTS and Crypto Derivatives Win Attention as Billionaire Paulson Calls Crypto Worthless
"What are the interesting things about. Hedge funds and venture investors. Is that often times. One really big contrarian bet that pays off can solidify investors reputation for a very very long time. John paulson had one of those bets. Betting against the housing market in advance of the great financial crisis. That position ended up netting him and his investors something like twenty billion dollars which is very clearly a career defining bet however it hasn't been quite as good since then at peak in twenty eleven pulse and managed thirty eight billion that was down to nine billion by twenty nineteen when he shut down his hedge fund and started managing his own money an estimated three point five billion instead this is not the scoff at three point five billion dollar fortune but simply to point out the paulsen is proven himself to be pretty firmly in the camp of one really good call which perhaps takes the sting out of his recent comments on bloomberg wealth with david. Rubenstein about crypto. The setup to that combo is one. Many bitcoin is in particular will resonate with basically he says that an expanded money supply is going to drive inflation. His bet however big time is gold. He's backed it for years. And this apparently is finally. It's moment crypto. On the other hand he says will eventually prove to be worthless. I wouldn't recommend anyone. Invest in crypto currencies. Santiago santos said on twitter. It's hard to know. How much is luck versus skill and investing unless you can win and lose on purpose to this day. I doubt my ability. Here's paulson who got a tip from a deutsche bank trader too short housing poor track record since won't be as lucky. This time with crypto masari's ryan sell. Kiss was a bit snark here. John paulson must be bitter. That about thirty crypto investors and entrepreneurs have now leapfrogged him in net worth betting on gold versus digital gold financial internet and the user owned economy at this point is record shadowing boomer energy. What a savage and true phrase record shattering boomer energy
"hedge fund" Discussed on Money Rehab with Nicole Lapin
"As okay. If i buy some socks. I'm also going to be against some stocks. That's hold shorting so you're supposedly market neutral meaning if you buy one hundred dollars worth of stock. So you're betting that they go up. You also short one hundred dollars worth of stocks betting that they go down and so you're neutral on the market and the idea is whether the market was upper down you win and you try to find the worst companies too short and the best companies to buy and that's called your edge if you if you really have a abilities in investing above just the average you know throwing dr at at the board you'll pick the better companies to buy and you'll pick worst companies to sell and so no matter which direction the market goes you'll be up on the air and so you'll be up. Every the idea was not to make a huge amount of money but to be up every year no matter what the market does even if the market has a huge crash and hedge funds have evolved since then for better for worse unfortunately that basically it's this unregulated vehicle where rich people invest money and hedge fund manager. Could do whatever he wants. There's no restrictions you don't have to report anything you don't have to tell anybody what you're doing. And there's so many scams i've run a hedge fund and i've run a fund of hedge funds. Meaning people would give me money to invest in. What i thought were the best edge. So i've done due diligence on hundreds and hundreds of hedge funds and i will tell you. Eighty percent of them are scams. Like there's something wrong with about eighty percent of them and i would never invest in a hedge fund to what why i know. This is a long answer but i just think there are too many that are regulated. And that are that are scams that and i just. I don't trust anybody anymore with managing my money particularly when they don't have to give back whenever i ask and i can't see it every day. It's not it's not very transparent and i just don't like the idea anymore of hedge funds but not bernie madoff type scans place but not so far off by the way like bernie madoff was caught and he was huge but there were a lot of what i call mini. Medoff's where it was. It was a scam but it just wasn't as big because they weren't as let's say successful as birdie made off at pulling off a scam and i met bernie madoff bernie madoff offered me a job and actually what happened was i went to visit. Bernie madoff hoping he would invest in my hedge fund and. He gave me the tour of his office. And he's like all right. James you know. I like you why. Why are you here. And i said well hoping you know i. I heard he had a sixty billion dollar hedge. Fund i- theorize. Maybe he needed places to put the money and says i want you to invest in my hedge fund. And he's like listen. Listen i like you have a job here anytime. You want But i don't know where you put the money. And i can't take any chances and the last thing i need is to see on the front page of the wall street journal the name bernard made off securities elsie and coley shut. But then what's interesting is as i was leaving the his building sa- famous building in new york called the lipstick building as i was leaving his building. A lot of other hedge fund managers. Were calling me and saying we heard you met your meeting made off. Like do you think he would take. He would take our money like you think. We can invest with him He usually doesn't let a lot of people invest and i reminded people that afterwards. We never made that call. We knew all along he was a scam. And i'm like no. I don't think you did. Because i have it right here on my phone that you called me minutes after. I left the building so i don't again. This is why everybody just lies all the time on wall street. There's no sense that oh we to we to tell the truth here like they don't they don't give a shit most of the time. I'm really disgusted with wall street. Like the more the more you know the more you realize. Wall street's horrible scam. So what are the mini. Madoff sleep you don't think had trends are good investments at all no like i had one one hedge fund that i was invested in and they were. They started being investigated by the sec. There hedge fund manager was being accused of basically stealing ten million dollars from the fun just putting just taking out of the fun and putting it in his pocket and before the investigation going he said look. I'll just settle with you right away. And they because at that point there was no investigation. They didn't have any evidence so he settled with them for fifty thousand dollars and then he disappeared like we. He took his ten million dollars. I don't know where he is now. We were facebook friends. But i think he liked blocked me or whatever and that was that he settled for fifty thousand dollars and it was done because the senate notoriously hard to actually prove anything. I mean. sometimes there's not even laws because these hedge funds are so unregulated for today's tip you can take straight to the bank. Hedge funds may require a closer look than you think. Don't give the financial reins over to someone who tells you the no better or they'll just take you for a ride. Do your research on a hedge fund just like you would when you're looking into a company to invest in. Don't be afraid to ask questions or push back on anything that doesn't quite make sense or add up. You are a smart person. If it doesn't make sense to you. It might just not make sense at all. So while hedge funds can be really effective tools to make money like james says. sometimes they're just scams money. Rehab is a production of. I hurt media. i'm your host nicole. Lapin our producers are morgan lavoix and catherine law money. Rehab is edited an engineered by brandon decker with help from josh fisher executive producers are men gashed editor and will pearson huge thanks to the. Gee money rehabbed supervising producer michelle layoffs for reproduction and development work. And as always thanks to you for finally investing in yourself so that you can get it together and get it all. Listen we have ice cream. But there's ice cream and then there's jenny's ice cream janis unique flavors like brown butter almond brittle butter cream ice cream with golden pockets of caramel and crunch and bramble berry crisp ice cream that tastes just like a fresh berry. Cobbler topped with vanilla. Ice cream. all made from scratch. No synthetic flavorings are dis. Ice cream is great and jenny's makes it better find. Danny's one of a kind ice creams including gluten free dairy free flavors at scoop shops grocery stores nationwide and online at jenny's dot com. That's j. e. n. s. dot com. Listen we all love ice cream. But there's ice cream and then there's jenny's ice cream janis as unique flavors like brown butter almond brittle a butter cream ice cream with golden pockets of caramel and crunch and bramble berry crisp ice cream. That tastes just like a fresh berry. Cobbler topped with vanilla. Ice cream. all made from scratch. No synthetic flavorings are dis. Ice cream is great and jenny's makes it better find. Danny's one of a kind ice creams including gluten free dairy free flavors at scoop shops grocery stores nationwide and online at jenny's dot com. That's j. e. n. s. dot com. When if you could get thirty dollars after joining a better broker you can with 'em one finance once you're approved and deposit a thousand dollars in your account and one let's you easily manager finances and invest how you want for free. I'd say it's a million dollar idea but that's under selling it visit 'em one finance dot com slash money from have to learn more. That's m the number one finance dot com slash money rahab terms and conditions apply investing involves risk including risk of loss and one financing. Member finra sipc..
GANs in Finance
"My name is florian. italy. I'm a recent graduate of the university of applied scientists in the field of engineering and management with specialization on industrial engineering for listeners. Who aren't familiar. Could you share a general definition of what is industrial engineering well. Industrial engineering applies to often optimizing in trying to improve on industrial processes of various nature. So it's actually an umbrella term for a lot of stuff well. I'm a little bit surprised that someone with an industrial engineering background would know about generative adversarial. Networks it's a very contemporary new idea in computer science. What about your background. Got you some exposure to this topic. Flora graduating at jeet. Some projects on time series. So i ended up being very interested in financial time series and that kind of stuff so when it was time to do my bachelor thesis i actually migrated to a more of a financial mathematics fields in my university. Although my titled will still be industrial engineer engineer. I think my work gravitated towards more of a quantitative finance field in my exposure to quantitative finance. I've always found it to be a very numerical heavy computation. Heavy stats driven. Approach that those are the methodologies that get picked not so much machine learning although that's been transitioning what's your perception of the field and its adoption of machine learning techniques. How far has the pendulum swung the other direction. Well what i see is right now. That's a lot of new firms and you if it's a hedge funds are new. Research teams inside of peak. Financial establishments are moving faster towards is new type of modeling. But i would say yeah. Historically banking as finance hasn't been exactly as machine learning focused as it is now or as it starting to be. But i would say that depends Probably have swung. Based on increasing computational power and the improvement of this kind of machine learning methods overall elsie
Robinhood Goes Meta, Becomes the Ultimate Meme Stock
"Robinhood taking investors on a joyride the stock surging as much as eighty one percent for triggering several trading halts early in the session. Robin had closing out the day with a gain of just fifty percent. It's now up. Eighty five percent since going public on thursday. So what's driving. The wild action shares. A robin hood. Let's kick things off with kate. Rooney's got the story kate. Tamerlane's yeah quite a turnaround for robin hood. The stock touched eighty five dollars earlier. That is well above where it last week robin hood. Stunk ended the day around. Seventy dollars per share was the second. Most traded name on the nasdaq. Today only behind. Amd and it was halted a few times for volatility today as far as trading volume it surpassed its ipo day with more than eight billion dollars worth of shares changing hands. The stock is still seen pretty thin trading so that thanks to some of those lock-up periods for certain investors mean fewer shares are available to trade. I'm told that brought a lot. More volatility today retail interest is another big factor. It is the most mentioned stock on read it. At least it was today. According to data from think with more mentions than both game stop and amc and momentum train is well. That is a factor. There's likely hedge funds looking to jump in on some of this action. Short interest though does not appear to be a factor at tends to be pretty expensive too short stock like robin hood so soon after nine peo- that is thanks to the lack of shares out there to borrow. I talked to s. three partners about this earlier. They say there is some short interest but it was really the long side. Driving robin hoods prices today.
Robinhood Sold IPO Shares to Over 300,000 of Its Customers
"That have the most to lose and speaking of stocks. That have a lot to lose. I want to talk about the ipo of robinhood. This was one of the more highly anticipated. Ipo's after all this really encapsulates the entire you mean stock investing theme where the public is just buying everything no regard the fundamentals pure gambling in fact a lot of people have taken their stimulus money and deposited directly to their robinhood accounts. And of course robin hood was at ground zero for the game. Stop short squeeze in fact. A lot of people were upset at robin hood when they halted the ability of people to buy a game stop or the leverage up to buy game. Stop so there was a lot of people focusing on this. Ipo they supposedly have democratized. Investing course robin hood is not about investing at all. It's about speculating. It's about gambling if anything that's all they've democratized and they're not helping the little people rob the rich right. That's the whole name of robinhood is where you're taking from the rich and you're giving from the poor will what robin hood actually does is. It helps the rich take from the poor because the people who are losing the customers or the people who have accounts at robin hood because they're not actually the customers. Those people are the product. The customers are few hedge funds that are buying all the order flow. So they can trade. Against all the robin hoods right so all the mary men who have got account robinhood are losing a bunch of money and the people who are making. The money are the rich sheriffs who own these hedge funds. The reason they're buying all these orders is because they're making a lot of money off them because the people that have robinhood
How Decentralized Is DeFi?
"What's going on guys. It is wednesday july twenty eighth and today we are asking. How decentralized is decentralized finance. And why does that matter. So yesterday i did a show on three separate hearings on the hill that related in some way to digital currency that show also covered a letter sent by senator elizabeth warren to treasury secretary janet yellen in the context of her role with the financial stability oversight committee. This is hardly the first time. I've had multiple regulatory topics to cover on the same day. And that i think reflects just how much discussion of these issues is now. Happening at the highest levels of government in some ways this was an inevitable byproduct of the most recent bull run not just in the sense. That higher prices and more attention bring more scrutiny. Although that's part of it it feels inevitable in the particular composition of this bull run. It's one thing. If crypto is a silent off segment of weirdos and malcontents and internet people even if they keep getting richer and raising the value of their magic internet. Money's it's something different when all of a sudden the participants are traditional financial institutions. The concern start to magnify both from consumer protection standpoint as well as from a systemic risk standpoint if banks are allowing people to access bitcoin buying selling and holding from their accounts is there a greater consumer protection challenge if hedge funds which have historically been points of failure for the larger financial system. Suddenly start to opaquely. Load up on crypto. Does that mean a new type of systemic risk are stable coins being adopted actually a threat to the dollar system that government currently controls for regulators. These seem like reasonable questions. And thus we're seeing much much more scrutiny.
Can a New Wave of Crypto IPOs Rekindle Wall Street Excitement?
"Anyways today. We're discussing the robin hood. Ipo and the circle ipo and whether they can get wall street. Stoked on crypto again. So first let's talk some background. In retrospect the coin base ipo as the top sort of looks super obvious right base ipo on april fourteenth and the bitcoin all time high depending on your exact source came within around twenty four hours of that event there was an extraordinary amount of hype around this which by the way is technically direct listing. Not an ipo. But either way there was a ton of hype and it's because in many ways it wasn't just a single event. He was the culmination of an entire narrative which had been driving the industry for upwards of a year that point. Bitcoin had surprising resilience post black thursday crash in march twenty twenty hedge funds. Particularly paul tudor jones start to notice and explicitly identify it as a good trade in the context of massive global money printing. And this wasn't hard to understand right. It was an incredible moment to c- bitcoin supply issuance pro grammatically have had the exact same moment as central banks were getting comfortable with bigger balance-sheets than ever and by the way paul tudor. Jones wasn't even close to the only hedge fund who bought into this narrative by late summer. Early fall some others like stand druckenmiller. We're going on cnbc to say so as well and turn michael sailor and the bitcoin treasury bat and all of a sudden there's an additional dimension to this institutional by narrative other companies like square follow. Suit some really unexpected players. Come in as well like mass mutual's one hundred million dollar bitcoin. By which is where many of you probably. I heard of a breakdown sponsor night dig all of this creates an incredibly strong clear narrative picture going into the holiday in the new year. And then we get alon tesla's one point five billion dollar. Bitcoin treasury by dwarfs at least the initial by of micro strategy and we really off to the races and then coin bases listing is announced and it seems like the combination of things a major truly legitimising company from the crypto space moving into public markets
Sticking All of Your Systems and Data Together With SaaSGlue
"Your host is tobias. Macy today interviewing rich and bart would about saz glue assess based integration orchestration automation platform. That lets you fill the gaps in your existing automation infrastructure. So rich can you start. Introducing yourself share. Yeah my name is rich. Would i've been developing software for too long twenty plus years in the financial services industry in big data mostly dulling distributed systems and now currently helping to found saskatoon and bart. How about yourself. Basically the same thing except oil and gas financial in healthcare and going back to your hd member. I good involved in the area of data management. So i started my career in the hedge fund industry building real time distributed trading systems dealing with really high volume low latency stock market data and two thousand eight. When the hedge fund industry wasn't done solo. I switched to the data industry. So for about ten years i've been building distributed felt tolerant scalable datum pipelines and bert. He'll get involved in. Data management rich turned me onto it a lot more experience with graphics in front end in or distributed real time systems but not as much data pipelines. So so you've both been working on the glue platform and you've co created it along with year two other brothers and so before we get too much into sas glue. I'm just curious if you can give some flavor of what inspired you to actually found a business with family and how well that's been going for you particularly as four brothers. Yes oh that's kind of an interesting story. So the brothers are jack j. Rich in myself. Bart in about three years ago. Jay and a friend had an idea for just as simple script owner. That could be done remotely and rich got on it in and once rich got on it i got on it and then jack kim a little bit later
Using Your Left and Right Side of Your Brain When Investing
"If all it took to be a successful investor was plugging numbers into equations. Full of greek letters. Then wouldn't anyone with a calculator be rich. It almost seems like the miracle gymnastics. You perform the worst. The result go read about that hedge fund run by a bunch of famous. Phd's and nobel prize winners. That blew up. I'm not saying the science of investing isn't important. You need math skills. What i'm saying is that there's also an art of investing like when i'm thinking about investing in a stock although listened to the company's pass earnings halls and read past quarterly reports and play with pass numbers. But then you need to make a guess about the future what my apple or zoom look like in five to ten years was my view of their management team how might their growth strategy evolve. Is there moat getting deeper and wider. The answers are totally subjective. And i've noticed the investors who really excel at assessing and judging the intangibles. Just use lots of common sense. They see things so clearly think so clearly. They also easily change their mind but don't change their mind easily. Which reminds me of the story about picasso. Have you heard it. It goes like this. Because i was sitting in a paris cafe when an meyer approached and asked if he would do a quick sketch on a paper napkin. Picasso politely agreed swiftly executed the work and handed back the napkin but not before asking for a rather significant amount of money. The admirers was shocked. How could you ask for so much. It took you a minute to draw this. No picasso replied. It took me forty years the longer you invest the more you realize that being good at investing has little to do with combing through mountains of data or spending hours crunching numbers to be good is blending science and art is hard data and soft data left brain right brain. Any artists will tell you that art is not knowing what comes next not knowing how the future unfolds you can never entirely no so the artist like the investor makes guesses. They might be wrong but they keep at it.
With AMC Shares up 1,100% in 2021, Company Sells Shares
"Movie theater chain AMC is raising two hundred thirty point five million dollars by selling eight point five million shares of stock I marches are a letter with the latest AMC stock price jumped more than eleven hundred percent this year yes people are going back to the movies as corona virus vaccinations increase but that's not why AMC is a so called memes stock along the lines of what happened to game stop large institutional hedge funds bet on AMC stock to fall while online investors banded together to force a short squeeze AMC management says the company will use proceeds from the share sale to invest in new leases and on improvements in existing theaters
Engine No. 1’s Big Win Over Exxon Shows Activist Hedge Funds Joining Fight Against Climate Change
"And so how did this vote actually come about a small hedge fund called engine number one which was just recently formed and which holds a very tiny stake in exxon mobil far less than one percent manage to galvanize support of massive investment funds like calpers which is californian mega pension fund. The new york state employees pension fund out more than a trillion dollars worth of capital are held by some of these more progressive pension funds. That are very interested in the issue. Climate change it won the support of important proxy advisory services as they're known such as i s in blast lewis these agencies give recommendations that are often followed by the big institutional investors on how to vote and they both supported the tiny dissident for a change in exxon
Big Oil Companies Take Some Big Hits on Climate Change
"I'm looking here to list of the biggest corporations based on their market capitalisation what the company is worth overall. Exxon ranks thirty third which is pretty big. It's a big company but it used to be number one. Exxon is worth a fraction of. What some big tech companies are these days in fact. Exxon is worth a lot less than exxon used to be worth. It faces big uncertainties because of climate change and that is the context for a meaningful shareholder. Move a tiny hedge fund managed to place two new directors on exxon's board and maybe more in an attempt to shift exxon's business strategy toward renewable energy. it's one of many oil companies under pressure. So we're gonna discuss this with. Npr's camilla dominance. Good morning. Good morning what happened to exxon well. A brand new hedge fund started last year with the express purpose of putting new members on exxon's board over the intense opposition of exxon's current leadership. This hedge fund argued that one exxon had made bad investments. That's part of the reason why they are not the corporate titan that they used to be like you mentioned they also said fundamentally. The exxon doesn't have a good plan for preparing for a world that tackling climate change and. I'll emphasize here. These are investors making an a financial argument other investors right. They're not saying exxon needs to stop burning oil because it's bad for the planet. This argument is look. The world might stop buying oil because of concerns over climate change so exxon better have something else to sell them. It'd be bad business not to prepare for that. And this tiny fund persuaded enough other shareholders to join them that they actually one at least two of these seats in in this election.
A Tiny Fund Scores Historic Win in Battle Against ExxonMobil
"Energy leads the way kinda surprising. News out of exxonmobil's annual shareholder meeting today ticker symbol x. Oh by the way turns out a hedge fund a relatively small a hedge fund called number one which holds a very small slice of exxon mobil. Stock has convinced some other much bigger shareholders that they should put a couple of engine number one's candidates on that company's board of directors candidates that would and this is the important part force exxon to cut back on its fossil fuel strategy and investments. And do more about climate change. It sounds insanitary. I suppose a little bit of corporate governance but it is a very big
Shopping for the Web
"This season. We've been unpacking the longest year in tech history. Nineteen ninety five. The year our future began so much started in that time but few changes were more consequential than the advent of online shopping. In just a couple of decades it's grown from a handful of startups to a team of goliaths and we couldn't live without them. But as we'll see the dominance of certain online shops is only partly due to brilliant business maneuvers. Now like i said amazon is not the entirety of commerce but it is the big fish in the pond so let's begin their why in nineteen ninety five did amazon start delivering packages. What made it possible. And what's at founder. Jeff bezos on a path toward shipping billions of packages every year. He immediately understood the whole idea of transferring currency at making trades with this new use of this relatively new technology. The internet robert specter wrote the first book on amazon. It's called amazon dot com. Get big fast and that should tell you something about the amazon origin story. It's a story about capitalizing on a particular moment. Seizing the day in the early nineties. Basil's lived in manhattan. He was making more than a million bucks a year working at a hedge fund that relied on algorithms cutting at the time and it speaks to the sort of business. Basil's believed it. A data driven business and automated business. Meanwhile the hedge funds founder. David shaw adebayo's and a few others to look into this newfangled internet thing see what kind of opportunities were there. So jeff and other people looked at various product categories. In of all things books rose to the top as the most obvious product category. Why books
David Swenson, Head of Yale's Massive Endowment Fund, Has Died
"Danny who is david swinson. And why does his death impact the show yes. We're recording on this thursday. We learned that david swinson. The longtime head of sales endowment passed away from cancer. At the age of sixty seven. Swinson pioneered for endowments the alternative investment approach of investing outside of stocks and bonds to hedge funds and private equity and venture capital. Obviously that really revolutionized basically asset management across the world it invented the modern dowman. That really built up the universities. You're no stanford. harvard princeton. All sort of used this to really buttress their financial powers of the last couple of decades and his losses a huge tragedy thing for the entire industry. I was just going to add one nine to yale's endowment to give listeners perspective my friend taneja pora put it out a graph showing swenson's impact on yale's endowment and says that he grew the endowment from one billion in nineteen eighty-five to over thirty billion and created eight billion in value through its performance alone. So this guy had a huge huge impact from a financial perspective and as you mentioned just culture and how we think about venture
Dow Climbs More Than 160 Points to Another Record
"Closing highs today with blue chips pacing the events. The Dow Jones industrial average rose 164 points to end the week of 34,200. Blue chip index down in the fourth straight weekly game theme S and P 500 moved up 15 points also to a new high, the NASDAQ composite added. 13 points, Morgan Stanley reported first quarter profits that more than doubled and revenue that jumped 60% to record levels. But huge trading losses related to the hedge fund. Archie goes, weighed on Morgan Stanley's stock. Shed 2.8% U. S. Oil prices fell slightly halting afford a streak of gains make crude slipped 33 cents to settle it. 63 13 a barrel Still, though it logged a weekly rise of 6.4%, that's your money now. In the
The Real Story of Inflation Right Now
"What's going on guys. It is tuesday april thirteenth. And today we are talking about the real story of inflation right now. New consumer price index or. Cpi out from the bureau of labor statistics and this is the latest entrant into the great inflation debate. I want to discuss the complexity of that conversation but to do so we have to go back in time just a little bit in may of twenty twenty just a couple of months after assets crashed around the beginning of covid nineteen lockdowns. Paul tudor jones published. What i believe will go down as one of the seminal treatises in the history of bitcoin. The piece was all about what he called. The great monetary inflation quote the depth and magnitude of the economic off took modern monetary theory the direct monetization of massive fiscal spending from the theoretical to practice without any debate. We are witnessing the great monetary inflation an unprecedented expansion of every form of money. Unlike anything the developed world has ever seen for those of us in the bitcoin. Space even more significant than the diagnosis was the proposed remedy. Pj and his team had surprised even themselves by getting convinced bitcoins role in that sort of macroeconomic context. They had turned bitcoin bulls. This was a seminal moment in the institutional turn towards. Bitcoin and the essential thing wasn't just that an influential hedge fund guru got into a pet asset. It was this setup around inflation that people could see and feel for themselves a few months later stand. Druckenmiller went on cnbc echoed many of these themes. He said for the first time in a long long time. I'm actually worried about inflation. He went as far to say that he could see inflation getting his highest five percent to ten percent for a time. Now part of the reason that druckenmiller cited for this was a shift in fed policy a new willingness to let inflation run hot specifically the fed had indicated that rather than shifting monetary policy based on projected inflation. The fed would only change policy. Wants a target level of inflation had already been
Reimagining How and Where We Will Work
"Me today to fantastic guests to talk about the new hybrid work environment. Karen mongia and ray dallaglio. Karen is an internationally recognized thought leader and three time author for most recent book working from home making the new normal work for you is highly relevant to our conversation today. She's blogger speaker and has been featured on tax forbes thrive global among many others. Currently she serves as vice president of customer and market insights at salesforce karen. Welcome to the conversation. Thanks so much. It's great to be here also joining us today ray. Dalia raise the legendary investor and world renowned entrepreneur. He's the founder of bridgewater associates the largest hedge fund in the world and author of the number one new york times bestseller and number one. Amazon business book principles. Ray thank you so much for joining us today. And you've avenue so today we're going to discuss the new hybrid world of work and what it means for all of us. Current yearbook working from home is filled with practical tips on what it's like to have a successful work like from home and something. I think we all still need some help with perhaps so tell us maybe what we've been doing wrong. It's impractical tips. What you'd recommend to be effective in focused working from home. I think about it not so much about what. We're doing wrong as discovering what we could do right to help ourselves live and work in a sustainable way you know if you watch successful athletes before they take the field of play most of them have a great warm up ritual right something that shows them in signals to their brain there in the game and they're getting ready to be all in and in the world of work from home that looks like routines rituals and boundaries that helps signal to our brains into ourselves. We're getting ready to go to work. And also importantly we're leaving it that there's a point in time at the end of the day where we have a ritual that allows us to leave to power down that laptop in truly tak- transition
"hedge fund" Discussed on KLBJ 590AM
"And they did they did. This is this is the ultimate I've been telling you about this. The Internet is the ultimate Liberator, an equalizer in America. It doesn't know if you're black, white, gay or straight, And it doesn't know if you're a big hedge fund or somebody setting on your mother's couch with the laptop buying stocks it has equalized. Everything when it comes to, especially this kind of thing. Well after a 135% game gain game stock stock closed at $3.348 Bucks a share. Now we could go. Is it 43 last summer was at four bucks. Now. AMC shares exploded 300% and nobody's really going to the movies. You know, across this country and you know, like the way they used to. Well, the run up in the game stop was so dramatic that short seller Citron research Big hedge fund. Which bet on the stock dropping was forced to close out most of its positions and lost 100% of their investment. Wow, they're gone. Yeah, the Yeah. It's pretty amazing. So you know, we dive dive a little bit deeper in this and it may be some people out there listening there, you know, maybe they maybe they scooped up some of these stocks. 51283605 90. I brought this up with you on the air about it About a year and a half ago. We're talking about these. You know these frat boys, you know, and you know, You know, young young guys get together in dabbling and experiencing in and you know, exploring stocks and what this really is. What this really is is This is millions of people losing their jobs and getting furloughed and getting to $600 checks, saying here survived for the year and, you know, Wall Street telling people pull yourself up by your bootstraps. Well, the small investor pulled themselves up by their bootstraps collectively and beat the big boys on Wall Street. Big boy. The hedge funds have always done this stuff. What, what these Wall Street bets group did and read it in others. They did exactly what the hedge funds do. Manipulate the stocks. That's all they did. They just outdid him is what that happened. All this has to do with it basically is creative. Mathis is what it is. But I guess what would as an investor you know, A to least for my kind of perspective. My interest is investing in successful companies or companies that could be successful that show a good steps shot it being so set successful on paper. Gamestop look successful today on paper, but the actual business model of game stop Is failing miserably. So we will see in the long run. How this how this pans out, But certainly in the short term it's working in. Ordinarily. Well, there's more to this story will dive into it. And of course you could jump in at 51283605 90, Thailand Don show. Listen, you need to get out to the original Maxwell and tell you that because if he thought out you if you thought that you missed out on those year in deals that you get to on automobiles, That is not the case at the original. Now Maxwell in Taylor in fact, They are extending their start something new sales event to the end of the month right now. Yeah, they're extending 2020 pricing onto 2021. Yeah, that's incredible. Extending those great year in deals that everybody waits for when you're buying a new car, get it if the original now Maxwell and Taylor here, set an example you get a 2020 ran Lone Star Crew.
"hedge fund" Discussed on BiggerPockets Money Podcast
"Are we willing to take that risk? Are we willing to say two years? You get two years to figure it out either go back to finance get another job get into consulting if it doesn't work out. And so we said, yes and I called my manager said like listen I need a break like I, need to do something else this I have loved this opportunity of love the intellectual development like I think after everything I need to break and they were they were great about it. They were definitely a little bit confused. About what I was going to be doing for work but I'm grateful but they paid me through my maternity leave. They still gave me that my bonus for that year, which also helps us with our goals and things like that, and and we transitioned and I went from you know Hedge Fund to working from home with a two year old and an infant a few weeks later. So it was your wealth primarily in at this time to year cash reserve, and then retirement accounts was that would kind of like imperative to feel comfortable making that decision or did you have other assets outside of those kind of two buckets? So we primarily cashed. We had some traditional like taxable investment accounts we could've pulled on and then we had retirement. We would have pulled some money out of taxable and then we were also we had a house in Boston and we knew we weren't going to stay there. If I left that job, we would either move closer to family we were talking about moving in Vermont and doing more of like a homestead thing but we knew he'd be able to take some. Equity out of the house which would have helped the runway when my prior employer decided to pass your maternity leave, we didn't end up having to take money out of the market, but we did have cash accessible. We weren't gonNA have to tap retirement accounts and gave us some some comfort I I wouldn't have done that. So we had some some wiggle room. So it sounds like there's a lot of math that into this to calculating this runway and it sounds like you're planning on expenses changing after you left your job as well. Can you walk us through kind of how you were doing the back of the Napkin on on those? Yeah. So I use a tool called entre trajectory that like you can put in all your different assets in it'll you can set different growth rates for them, different inflation rates, and it'll chart out and so could move money around in their pretty easily and then I had a robust. spreadsheet attract some of these things that we were pulling in. I have I have budgeted everydollar have ever made in y nab and you need a budget like since my first job, and so I've used it since as a desktop. APP, and so we had a ton of information about where our money went and then I'm a researcher. So we kind of knew when we hit fi eventually, we wanted more property we wanted to do that homestead things do we'd been doing research on like okay what things cost the cost of living in different states in Nat? Moment, in that stressful moment, I will be honest. We basically said, let's take our expenses and assume they're the same as right now, and that there will be probably be places where costs will go down our cost of housing will go down our cost of food and just general expenses will go down but we'll also have to pay for our health. Insurance will also have other things changing, and so let's just assume it's a wash and we'll figure it out as we go and I do. This is a big thing we've always thought with budgeting.
"hedge fund" Discussed on Sci-Fi Talk Indie Film
"Script and I went in the room and I looked the job. Crate. I. Talk. And I was. It was different. You know I mean you know when you've had work been successful or head little victories. So you can do the work different level of service. You know there's I guess you might have a little coffin. It's about you or understand it, and you know you're able to to understand what you're supposed to do and that moment and do it I got it, and then I just kept working ever changing thing I just started banging them out I was getting a lot of stuff and so and then you know thousand nine team around two thousand, eight market crash. Hedge Fund monies that'll blow it.
"hedge fund" Discussed on Adventures in Finance: A Real Vision Podcast
"All my monthly investor letters and looked at my portfolio where I'd made lost money and I realized that I had owned owned some of the greatest stocks of all time I own apple back when it had a three billion dollar market right I owned net flicks in two thousand eleven eleven and twelve at a three billion dollar market cap. That's been about a fifty bagger apple spent three hundred bagger. I owned Ross stores at a buck seventy. That's been a seventy seventy bagger the only one that I really identified equality business and just hung with it was Berkshire hathaway which owns from day one two year eighteen when I closed my fund. I owned it consistently but the rest you know I bought them. I owned McDonald's back when it got really cheap in two thousand and two early two thousand three. Are you got down to twelve dollars a share. What's it at two hundred today. I own home depot. You name it yet. I had sort of own them at the right time. When great companies had encountered what turned out to be temporary difficulties. Their stocks got cheap. I bought them that part. I did quite well. The problem is the stocks then went up fifty percent and they didn't appear as cheap anymore. I saw them and it was. I realized realized my probably my single biggest mistake. Over twenty years is is that I probably paid. There's always there are two main things you're looking at right which is price or valuation and business quality and I was smart enough to understand they were both important but when I look back and I look back at my decision decision making and where I was screening for stocks I was probably seventy five percent focus on statistically cheap stocks low oh price to earnings price to book cash flow whatever traditional valuation multiples and I was only twenty five percent focus on business quality so when I went out to look for businesses I would screen for statistical cheapness and then I'd come up with. Let's say one hundred companies and then I would look for the better businesses among them. What I should have done is the exact opposite. which is I should have said? Let me go out and find the hundred greatest businesses the grace the planet earth and that have the biggest moats that have the brightest futures that have the most long term potential and then. Let's look there for an for the ones that are being temporarily miss price when I can get in at a good price but then once I'm lucky enough to get into good price. I'm going to ride him until until the story changes you know stories sometimes change valiant was a twenty bagger before the story changed and it went down by ninety seven percent so I'm not selling. I'm not saying my mistake was you never should've sold anything. If you make a mistake the story changes or if the valuation Russian truly gets extreme you need to get out of a position or at least trim it obviously part of a critical part of portfolio management is position sizing and managing a high class problem which is you put on a five percent position in a stock and then it doubles and doubles again in doubles again. It's a high class problem but figuring out you know win. Let your winners run how much and win it. CETERA is a is a key part of that so that was a that was a big mistake. so I'm now I still consider myself a value investor but I sort of say I'm not a value investor or a growth invest make money investor. I'm much more or open today to paying up a for a stock that that may not look sheep on a current year's earnings multiple or something like that but where you know I can think okay five years from now. What is where do I think this company is likely to be and what can it be earning meal five years from now whereas historically I was only willing to you know look at sort of current year earnings or maybe what they were earning next year. I wasn't willing to look at out any further than that. So I missed a lot of the great moon shots and other stock by the way back in one thousand nine hundred nine was Amazon Sakes. Thanks right. We should talk about that because I thought I think that it was Doug Casts I saw on your site who talking about Amazon the first thing that came to mind when you were telling that story was the European banking sector because we've been talking about European back. Actually I spoke to an investor last week or the the week before last and he said in his fun he has no European Bank stocks yet when you look at them on price to book Valuation Deutchebanks Bank for instance. It's trading at twenty percent of book thirty percent of book. Yeah I mean that's a cheap star when you look at from the paradigm that you're talking about now. How do you look look at the banking sector as an example financing gentlemen well generally banks particularly investment banks which big derivative books because I think thank you have to differentiate between you know just your standard retail banking franchises versus investment banks like Deutsche Bank generally speaking speaking they make me nervous insurance companies. I'd throw in there as well in that. There's just there's Black Swan risk out there because there's leverage and because they have big a big either derivative books or loan books where it's very difficult often. There's sort of black boxes. You know what's in there so you just have to have a lot of confidence in management generally which is why you know. Berkshire hathaway certainly something I felt comfortable owning just because I've steadied Buffett and Munger longer so closely and understand their fundamental conservatism but there aren't very many other financials I mean the financial sector the history of financials just is littered with boom and boss and management teams that are out there trying to deliver steady earnings growth in a sector that often doesn't lend itself to that general view of the European financial sector as after the great financial crisis no eight. Oh nine the US did a very good job of forcing the entire financial sector clean up to realize their losses to run off their bad banks and cleanup underwriting standards etc but mostly to take their medicine and recap and recapitalize etc and that didn't really happen in Europe. You know I host an invest in conference in Italy every summer and so I'm talking to my Italian value investor friends over there and you know the bunkum wanted. The oldest bank in the world dozen years later is still on death's door and has had to do multiple rounds of of capital raising because they sort of had a bad loan book but didn't or couldn't take their medicine so oh. I'm you know they're. They're a lot of things I'd say. The vast majority of what I look at generally just goes into the too hard bucket doors have been interesting because because a an and by comparison I think that when we were talking I thought it was interesting you know when you do the twenty five seventy five twenty five percent cheap deep seventy-five percent good business it brings us immediately to the GPS's yeah so when you talk about financials the juxtaposition in between the black box of the investment bank versus what I would consider a dominant position of GS's is very interesting and that's. That's a very interesting political story that you have a lot of knowledge about. Tell me a little bit about what's going on there yeah well. It's interesting since I started my investment newsletter later in April of this year I'd say at least half of them half dozen or so recommendations. We've made so far we put out one. I have have a free daily. Letter goes out to thirty five thousand people or so every day but we once a month we put together a ten to fifteen page report on our single best investment in that goes to our paid subscribers so once a month since March. We've had a half dozen ideas. The majority of them have been ideas is from back in my hedge fund as companies that I've known for a long time and one of the more interesting speculations that was in my hedge fund was Fannie and Freddie government-sponsored services the mortgage giants the Jesse's which in many ways were what happened to them is exactly what happened with. Aig for example uh-huh it was deemed they were correctly both AIG and the Essy's were deemed systemically important the US government came in gave them an unlimited line of credit to to make sure they could get through the crisis all took eighty percent of their stocks and that's what happened in no way within a couple of weeks of each other to both gs's aig what what happened differently with the GPS's though is well. Let me what happened with AIG. Let's start there tell you what happened differently at the in in the case of Aig the company recovered as the economy and financial system recovered AIG sold off assets returned earned a profitability they paid back the government loans with interest and then the government still owned eighty percent of the stock which the government over the course of a number of equity woody offerings exited the position. The government made a fortune edgy. AIG is now an independent privatized and very carefully regulated a major financial institution today. That's exactly what should have happened to the. GSEE's the problem is in two thousand twelve just as the GS's were about to return to massive profitability their.
"hedge fund" Discussed on Adventures in Finance: A Real Vision Podcast
"Whitney tells you might know him. As a hedge fund manager with case capital management he founded ended that Fandi grew it from what he describes as bedroom grew it to a major player and then it it all it all went away and he tells the whole story of the incredible rise and fall of his hedge fund in this conversation with real visions and Harrison Whitney also talks about some current market situations that he finds interesting talks about fanning Freddy at length and he talks about Amazon. He Sees Amazon as a value doc and he sees we work as maybe not so much so they talk about his credit talk about some specific situations and they talk a bit about the research that Whitney he is doing now with empire financial research so this interview was recorded on September ninth release to subscribers on September thirteenth and you get to hear the whole version right here on your podcast feed so please enjoy this conversation between Ed Harrison and Whitney. Tell him it when he tilson. It's a pleasure to talk to you. We're GONNA talk a lot about value investing some of the ideas that you have what you're doing currently with empire financial research but within the first question that pops to me when I look at your resume is that your parents were teachers. How is it that you got so involved in investing yeah well. It didn't come naturally. That's for sure my parents their entire lives. I never owned a stock so it wasn't like investing or business was ever talked about around the dinner table. I grew up in developing countries. Tanzania Nicaragua must childhood my interest in business developed when I was an undergraduate at Harvard got involved with Harvard student agencies and and I remember probably my sophomore year as an Undergrad somehow through some friend went sat in on a Harvard business school class and I just loved the case study method and I still remember the the case and what the insights were and I knew right then that I want to go to Harvard business school and that was my mission from that point forward so I did. A bunch of entrepreneurial stuff ofo coming out of college was employee number two helping Wendy Kopp start teach for America then did a fairly traditional two year associate program at Boston Austin Consultant Group and was lucky enough knock on wood to get into Harvard business school the only school I applied to if I hadn't gotten in I would have waited and apply to some other schools later but got in off. I went but up until that point all the way through Harvard business. School had no interest in investing I used to I remember are we used to get the. I was very interested in business. When the Wall Street Journal came I'd read it except I take the c section the money and investing section I threw it in the trash. Never even read so you know my only exposure really to investing was through my college. Buddy Bill Ackman who was very interested in investing at a young age and and I still remember bumping into him on campus back on Black October nineteen eighty-seven and he was white as a ghost and I said bill what's the matter and he said did you see what happened in the stock market and I said No. He's like well. It just had its worst day since the great depression or something and you know my family just lost millions of dollars and that was thinking thinking I saw Gee. I wish I had millions of dollars but so Warren Buffett came to speak at Harvard Business School when I was there and I didn't even hear him right incredible opportunity because I didn't even know who he was so it wasn't until the mid nineties I graduated in Nineteen Ninety-four so call it ninety six. I'd say okay I got interested in investing for a very simple reason. I had ten thousand dollars in my bank account. it was the first time in my life. I ever had any savings. I had college debt. Then I had business school debt. I had gotten married back in ninety three. My wife was working as a lawyer. We're living in her grandparents apartment. So we had a low cost of living. Both of US had incomes uh-huh. I was working in the nonprofit sector at the time so I didn't have much of an income but between the two of us you know we finally had some savings paid off. Our debt had a little had ten thousand dollars since so I called up bill. I said well you know what should I do with it. I want to invest this money and keep in mind the nineteen ninety-six or so you're now fourteen years into this big bull market. Everybody's talking about stocks the Internet starting to you know the early germs of the Internet are sprouting so Bill Hill said all you gotta. Do I still remember exact words. He said all you have to do is read everything. Warren Buffett's ever written go back and read all his annual shareholders letters and you can stop there. You don't need to read anything else. That's when I discovered buffet read his shareholder letters and that led me to a couple of years later start going to the Berkshire meetings. I read Roger Lowenstein Book Buff at the making of American capitalist or the first major biography of him than that led me to the the intelligent investor to Peter Lynch's books. you know beating the street in one up on on the street seth. Carmen's original book Etcetera Cetera etc led me into the literature and I just got more and more into it and started buying a few stocks here and there and at the time you know I'm embarrassed that I was sort of speculating in penny stock right you know hot tip somebody had given me but fortunately at least fairly quickly started gravitating toward higher quality businesses and buffets influence and bill ackman's influence started to steer me into higher quality businesses and I did that for a couple of years started managing you know at this point. Maybe my wife and I had saved one hundred thousand dollars so I started. I put that money in an e trade account started buying the gap Dell Microsoft. AOL was my big score. went up six times in a year in the late nineties and I quickly came to believe that I was God's gift to investing because every stock I picked went up. I now look back. Ah can realize I really wasn't doing much. Fundamental research didn't have any particular insights. I was just sort of buying what's hot and it was a stock market. It not too dissimilar to what we've seen over the past ten years where you know you just sort of bought some popular blue chip stocks and they just went up every year and you look like a genius right so it was at that point bill was probably four or five years into his first hedge fund called. Gotham partners he he had grown up from three million inception to five hundred million dollars under management he was hot and I figured well. I'm a smart as Bill and if my friend can bill and I are very close friends but we're we're both super competitive so you know sort of in late. Nineteen Ninety Eight my nonprofit job after five years working with Michael Porter at Harvard Business School is something I had started coming out of. HP was winding down. I said you know what I do. A bill did a few years earlier and just hang out. My shingle is the world's smallest touch fund and so six weeks later it was mid. November one thousand nine hundred eighty eight. I made that rash decision. I've been telling every young person ever since don't try and do what I which is rush out and start a fund out of your bedroom with a million dollars under management with absolutely no experience either on the business side of running and building an investment management business or really on the investing side. I was sort of a late nineties bull market genius but that's how it came to be. I opened my doors as the world's smallest hedge fund on January first of nineteen ninety nine with a million dollars from my parents my in laws bill through a little bit of money as dad threw in a little bit of money plus my own on money that got me to about a million dollars when I started but you say that you didn't have a lot of acumen but you hit a lot of home runs. I mean subsequently over the next two decades. You did very well yes well. I split it sort of into two periods the first dozen years or so. I really did knock the cover off the ball. is a great time for investing and to some extent. I was smart and lucky and but but a lot of hustle led to the luck saying yeah the harder I work the luckier I get so as an example only a year after I started were now in early the spring of two thousand a year after I launched I was up to about four million dollars and I heard that investing legend Joe Greene Blatt who I'd read his book. You can be a stock market genius again one of those classic early value investing books. He was teaching a class up at Columbia business school so I found out when the first class was and in what classroom and I just showed up and I sort of looked like a student. I was only five years out of business school myself so I sat in the back of the classroom and he didn't notice me or anything thing and I learned for a couple hours. He was teaching that day and then I went up to him after class and I introduced myself and confess that I wasn't a student but that was a big fan of his. I'd read his book. I'm watching Little Hedge Fund. Would he mind if I sat in on the rest of the semester and he got a very uncomfortable look on and his face because he's against Columbia business school policy to let just random. We'll come sit in on their classes and he said I'm. I'm not supposed to do this but if you promise to keep quiet like you can't participate in any of the discussions like a regular student but if you just want sit there and keep quiet I'll look the other way and so I did and that was an incredible investing education because this was the absolute very peak of the Internet bubble was March tenth of two thousand and I was taking this class that week and he was preaching the Gospel of special situations and and it's it's hard for young people today who I didn't live through it to understand anything. That wasn't nifty. Fifty Internet related then was incredibly cheap. Good industrial businesses this trading at three or four times earnings. Berkshire hathaway had gotten had fallen from seventy thousand a share down to just over forty thousand dollars a share which was sort sort of cash and investment so you got a much younger Buffett and munger seventy-five operating businesses for free.
"hedge fund" Discussed on A REAL ESTATE SHOW
"The markets. I don't see the market dropping jogging twenty to thirty percent so which means we have that cushion. We're going to be safe either way. That's why we're buying rentals right now even though everyone's saying not to but to pay full retail for rentals right now. I don't think the time got it so that's why that's why benefits an investment company or Hedge Fund to work with people like you who are really great at acquisitions and you know how to buy right find and a good deal because there's meat on it and there's cushion. I'd agree accept the fact that we're buying them much lower than you. We're we're trying to buy them for as low as we can and some to the funds for as high as we can so it does benefit us but benefit them to use US because they're getting inventory but the numbers they're buying stuff at our strong. it's tough to say what's going to happen long-term at the numbers numbers they're buying at I know we the way we look at numbers in the way. Are you know maintenance. Costs are an rentals. Those numbers wouldn't work for us but we're very different a friend right. We have big almost unlimited amounts of money at very low. Interest rates were different in the way we run things so yeah I I. I'm not sure the answer to that and that's you know that's an economics question for you by this house at this number. Eventually you look over time in real estate state's. GonNa continue to go up so maybe it is a great long term play but as far as cash flow goes. I don't see how they're making it work. Got It got it so you mentioned another term a RV right what does a RV mean we use atfer after repair repair value so an example that POPs ups in my head is a house we bought in pretty rough shape for sixty grand the AR V. is the you know what it's worth in the end or the bank appraised value appraised at like one fifty five and we put thirty into it so we're in it. We're in it at ninety. RV The the bank appraised values one fifty and that's what I mean by that cushion in there so even if the market drops to the point where that house is now worth one twenty ninety five well. We're still in good shape. We're still making money off. It doesn't really affect us. That's why we don't you know we kind of turn a blind eye of that because we're buying right so. We don't worry about keeping stuff like that. Got It now. I know there's someone listening in who is like wow this way over my head or the this seems like so much learn now. You've been doing this for a very long time you and your partner. You guys have a lot of experience and you've done a tremendous amount of deals. do you work with new investors or people people in Jacksonville Jacksonville. Beach or people in Central Florida North Florida and they're. They're looking to get into the game do you do do you ever worked with newer investors or people who want to get into do real estate all the time we have. That's been a huge initiative of ours recently. The I attribute a lot of my success to in having someone like like Kyle my partner who has who had the knowledge you know inexperienced way before I did and way more than me I was able to borrow pro hard money from him to be able to close on stuff really quickly so using you leveraging his you know his hard money and his knowledge is is the reason that I've been so successful so the goal with our new initiatives which is we have a monthly meet up and Kyle does breakfast and I do a kind of a happy hour thing where we only talk real estate and it's four New People. The point of that is to give everyone the same opportunity that I had with Kyle so we go there. We tell them exactly what to do. I tell them exactly what I did and you know I tell them what I would. They do now differently so they know exactly what to do. Plus they have my direct cell phone number so if they find a deal all you have to do is text me and we'll fund it will do the Rehab will JV on it and take care of all the back end stuff. People just find deals which is kind of kind of the deal that I had in the beginning you. You're bringing bringing value if you're bringing deals so it's almost like you know here's all the knowledge for free and you know anyone. That's anyone that's out there. That's willing to go put the work in can go and you have unlimited money unlimited experience to work with us and we typically pay people a third of the deal so if someone comes comes to the meet up for free which all our stuff free. We don't have paid coaching..
"hedge fund" Discussed on A REAL ESTATE SHOW
"Nineteen eighty s and newer stuff and build a rental portfolio so now this fund is in real estate because it's hard to if you have a ton of money honey it's still really hard to deploy it in real as if you have millions and millions of dollars that needs to be deployed someone has to handle that make sure that decisions are being made the the correct way and I wish my partner is on this podcast because he used to facilitate American homes for rent. Actually it was a huge edge fond. He did all they're buying in Florida and he did a great job for for them making sure they were getting great deals on this on this stuff but yeah you can you see if you have a bunch of money in your overpaying for stuff it can it can go wrong pretty quickly okay. I think you did a great job. There pet thank you. I saw you sweat in a little bit like Oh gosh. What is he going to ask me in. You know buzzwords words right braids session Monday. I'm looking for multifamily storage unit passive income and all a cap rate is is is a function unction of the rent. You can get for the house versus. WHAT IS WORTH I'm not sure they're always adjusting to cap rates. They're buying at you can. If you Google Capri operate you can get the exact formula of how to do it but all it is think of it as functionality a function of the rent you can get for a property based on what the properties OPTUS worth in the market at that time so one hundred fifty thousand dollar house renting for thirteen hundred thirteen hundred bucks a month. That's a whatever cap that is and you can't do that in your head. I can't but that's how people buy that's out there buying single family that's how people by multifamily these big investors by multi family homes and it's yeah. It's easy to learn that you can google that and see see we'll call you out of the cap rates yeah so you you mentioned you know like working with investment groups so your partner actually has experienced working there so he has relationships their industry knowledge. He knows how to communicate with them. But you know let's just say. Ah You know I'm I'm. I'm flipping a certain amount of houses. you know month or whatever and I want to start working with institutional money or or hedge funds or something like that. What's a good place to the just get started. That's a really good question. I'll tell you my partners relationship with American homes. Didn't that's none of that that is built on the network. We have now so we've we've built a completely new so yeah great question the first fund we started working with recently we put a we put up one of our houses on the mls and got an offer. We knew it was a fun progress residential so we knew they were a fun. Everything went really smoothly. they're off their back. Office did a great job so closed. They paid a great number. Everyone was happy we did was we reached out the agent. Who made the offer boom? Hey go right. That's the agent that represents progress in our market so eat lunch with our agent wine and dine them a little bit figured out what their by boxes that agents goal is to buy you know push as much volume through that through as possible but within within the CAP rate so I have that agents. E Mail says semi anything he got now. He's a great source for I sent him any anything nineteen eighteen eighties and newer and he makes offers on it another way I did. It was just going to conferences so before I N is a great conference a single family home conference. That's kind of like the Super Bowl for all these funds there's one in Arizona and there's one in south Florida every year so if you're not going went to him you should be. I N single family home conferences what they're called and the IMF has great software where you can go online and see exactly who's going to be either so what I literally did was go through. I know the names that you know I look up the names of the funds that were going to be there. I look anyone that had anything to do with acquisitions and I'd set up meetings meetings with all of that and get lunch get coffee with their acquisition people and tell them kind of what we do. And how can we work together the other that's how I made my contacts so now we get a house and if it's a good hedge fund house will you know will send it to the different funds they'll make offers on and will either decide to sell it to them or decide to keep it and working with funds is very much relationship based so we're not. We're not like trying to get highest and best out of these people. Were not telling them what was going to sell them something and then pulling it back that's where a early investor can get caught up in like oh you know this house. This fund is going to pay one eighty and I told him yes but then I got this offer from tricon at one eighty three. I'M GONNA. That's not how how you do it. There's very relationship based they trust us we trust them and we treat them the right way so if they really like like a property and we get inside of it and we're like wow this is which happened recently we had to vic some people we already had a contract with Amazon Kasana property. We got inside it. Wow this is in really good shape. We undersold it but we probably left about fifteen grand on the table but we sold it to them anyway because we said we would so the fund can be a great friend of yours but they can easily turn off if if you try to do highest and best bullshit with them or tell them you have stuff that you don't actually have under contract and pull it back so we've made our relationships and captain by doing things the right way and really keeping those relationships tight so I know 'cause I've worked on many different sides of the coin. It is hard as can be sometimes get a meeting with these guys and gals right. They're busy busy people so I don't know if we want to role. Play again or like you know. How did he get that meeting. How'd you get that coffee meeting with fund manager so with with agents in your mark a lot of these funds represented by agents agents in specific March at markets. Those agents should be easy to get a meetings with agents that their sole purpose is to push volume through the fund. They'll meet with you. They'll meet with anyone that can send them house. So the agents are easy the fund managers Yes. I probably at the most most recent are reached out to prolly twenty and got three really good meetings but all that was I reached out an I amend messenger I reached out to everyone individually Lincoln and individually on facebook and sent them emails and they are busy but my experience variance with these guys. They're not the fund managers I'm talking to. It's more like the guys in charge of acquisition acquisitions right and they have people under them so oh the way it's worked in the past is is the people that I have a good connection with that agree to meet with me. We have talk about what I buy and it's very very simple. They I mean everyone they. They get what I do and I get what they do so there's it doesn't need to be too big of a conversation. I know the the Fund by Boxes Eighties newer. I you get a ton of this inventory. that's our whole business model was specializing in buying this type of inventory direct seller on auctions and I can provide you with an I take what's in between they get that and they're happy with to be provided with it so the acquisitions manager will typically connect me with a guy underneath him. That's in charge of in writing offers and then we're off to the races. I'm sending him emails weekly on houses that were buying off auctions or putting under contract and we close on everything I I because you don't really wholesale stuff to them. it just the way they're you know the way they closed on so. I think some wholesalers double closing to them or taking fees but with us. We like it really clean. We're well capitalized so we'll close and then sell it to them a week or two weeks. Two weeks later I write us is an few other terms. well capitalized for for new listeners coming in and they're they're hearing this. What does well capitalized me. We have access to private money. which you know a lot of it is my partner his reputation and him always paying people back and being good businessperson this person ramping up over the years a lot of that him and also just just the way we do things. None of us get paid a salary to do it none of the business the owners get paid a salary so we everything's just compounding in there. We'll take distribution once in a while to live off of but other than that that that money's just just multiply so you're building. You're building eventually. We won't need private money at all in law just be ours but we have access to private money through the connections. We have made aid to the point where if we need money to close on something we have it there one hundred percent of the time that's all. I mean by that yeah okay. I I hear this a lot in and people will go well Josh. I'm I'm Kinda holding my money because I don't think now's a good time to buy or the rental. Market is a little scary for me. We think it's a little little inflated so we're holding our money. Like what are your thoughts on on where we're at a time of recording Gosh what is it August two thousand eighteen all right so like times may change in his his answers based on what he thinks at this very moment for people listening in and maybe twenty years from now or something right so what are your thoughts on where we're at right now so I recently purchased my own house to live in and the loan process for me to buy that. House house was an absolute nightmare. They wanted receipts from three years ago so I am pretty sure right now that to get alone is not as easy as it was to get a loan and five and six at which which caused that massive crashed to begin with was giving people loans that shouldn't have loans. I do think thank at the same time. There is some serious Jacksonville where people are buying houses. That can't really afford three percent download programs when they're asked when and I'm paying the three percent in closing costs a two hundred thousand dollar house they're buying. That's really worth one eighty five so there's some froth right now. I think we're due for correction but what happened in eight nine ten. That's a once in every eight-year crash right there so I think we'll see a correction. I I just don't see that happening again. as far as buying rentals the funds are paying big numbers for stuff right now based on caps cap rates people like open door are paying big numbers for stuff. I don't see I see a correction direction and I don't see that. were just working out very well especially. If the market drops ten fifteen percent there the long term hold game but the rents were getting right now the housing house prices. They're strong really strong and it's got. It can't keep going the way it is. as far as what so so to answer your question. I we are not in the game of paying one hundred sixty thousand dollars for a house. That's worth one seventy five renting it out especially right now. I think I think the funds I'd I'd like to see all their you know profit and loss statements but and you can get American homes for profit and loss statements but I don't think there's a ton of room in there for to make money especially during correction this is some high level stuff and I never not. I'm not complete claiming to be a high level person but I think there'll be a better time to buy for those funds. then there is right now. Even they're all going crazy. There's a frenzy right now but I don't think now's the best time to build that Rancho portfolio American homes was for rent was doing it like like crazy in two thousand twelve Jacksonville and they crushed it but now these funds are coming in and paying you know ninety percent eighty five percent of what zillow saying and and eighty to ninety five percent of what Zillow said may be actually what they're worth right now because of the fraud the way we buy is the the reason we're keeping rentals is because we are still buying. Lo- acquisitions is is our biggest strength hear me direct seller seller or from the foreclosure auctions acquisitions is all we focus on so we're still buying them and keeping them at numbers you know fifty to forty fifty to sixty percent of a RV renovating keeping them and then we're borrowing against him and getting eighty percent of our cash back out so it's still works.
"hedge fund" Discussed on A REAL ESTATE SHOW
"The bank the towns and get the foreclosure eliminated completely okay and then from there. They'll they'll go. Okay not interested or you know there's been fifty. Fifty people already knocked on my door to you know this week or something like that. Let let let's go with that. Hey thanks for coming by man. We're going through a really rough time and you know there's been already like thirty be people that's knocked on our door and I just I don't. I don't think that there's a situation where can help us okay. We'll just think of this mecum the door as more of a courtesy just so you know the house is going to auction two weeks from now. It's August thirtieth at auction so you completely have the option to just let go to auction. That's fine but just so you know when it goes to auction it will sell that day and they typically evict within a week so the reason I come and try to bang on the door beforehand or hands and bug. You is if you just sell to me directly. I can completely eliminate that auction date. Your foreclosure will be gone. I can give you all the time you guys want in the house after that date if you want if you need a little time to move but it's just much clear and I can give you money for your equity in the house so it's just a much it's cleaner transaction. If you go someone like me I can get that date on but keep in mind. You don't have to go with me but you do have to do something by that date or prepare to move so either way. It's good can I at least have my card or something yeah awesome alright watermelon watermelon watermelon all right so so in this pet what what kind of questions or what kind of rebuttal let's start with either. What kind of what kind of things do most people say if if it's a rejection like what what are the things that you hear most his attorney. Amari working with attorney it's already all taken care of which it very rarely is there. Just you know and you can't blame them. They're a little defensive sieve because if you get if you're getting foreclosed upon your mailbox is getting crushed by investors bankruptcy attorneys for closure. Ah You're just real estate agents. You're getting crushed with mailers. That's why door knockers effective though 'cause you can set yourself apart but typical rejections is already got it under control of our already working with an attorney. you know how do I know that you're for real. which is you know part of doing all this podcast stuff and part of being everywhere online as you can make yourself more legitimate they can look you up on their own right there but I would say that you know most of the time if the person's not their their main their main reject their main objection is I've already got under control working with an attorney in which case it's just okay well in case it comes to you do have to make a decision quick? What you're GONNA do I need at least three days before the auction to get the foreclosure and to get to get the foreclosure in the payoff on the banker everything so don't wait too long. Take my card. If you need me last minute or any advice whatsoever just Gimme Ray. I like how you said you know like hey. I I WANNA help help you. Let me just give you some information. I need at least three days so now they go okay time's ticking. Nothing's moving on the attorneys and he's dragging his feet. He's making his money regard right so like they're thinking who shit time's running out. I let let's look at the card on the fridge right and that's when they call okay okay cool. really liked to do to Josh's. This goes for all whether marketing calls are coming in or someone that you're going to their door. Obviously you're at their door for a reason. You're not you're not a charity. You're not a nonprofit so I like to be really blunt with the fact that yes I will give you some money for your equity in the house but we're a business and the the reason I'm helping you is because I'm GonNA buy your house for Ex. RENOVATE IT and sell it for why and there's GonNa be some sort of spread in between if you are blunt with the fact that so you need to make money off their house and it is going to be a win win but you need to make profit people you set them at ease. They feel like it's much less of a scam It's not a scam at all if you're blunt with them or I'm doing this to make a profit on. That's always one of the first things I say to people and I think that's why we've been so successful with. The direct back to seller marketing is because we are blunt. People are people are shocked at how blunt we are actually because we're we're big on not wasting anyone's time too so. I'll tell them right over the phone. It's not worth it. The agent and people appreciate that I've seen unsuccessful investors 'cause I've. I've done some ride alongs and I've worked. Some people and they'll say you know we just want to help you out out and I want to help you. I want to help in the whole time that customer or that homeowners thinking. You don't want to help me so they losing trust but you you kind of cut through that like hey I wanna make you're going through crappy situation. I WanNa make money in you can actually benefit from this or you can lose it all. Would you want -actly exactly and it's a great pitch that way I mean needed. They can yes if it goes a foreclosure sale. If it sells for more than seventy five they can go to the town and get that money that difference of whatever if if it's already not not going somewhere else to another creditor or something but if you walk in there and say you know you're not. GonNa get anything. If this goes to auction we can create a win win to where I make a profit that I can give you some money for equity and you can eliminate the foreclosure and you can take your time moving like how is that not. How does it not make sense to you. You almost kind of pushed them along and be like why. Would you not do this and a lot of times that works yeah. Why would you not do this and that's a great question is. Why would you not do something like this. His in Nafta actually think of defense. This is good all right so you guys are doing about twenty two. No you're doing about thirty houses now a month elbert. Which is if anybody's listening into this well if you heard that you're listening but I want you to go to their website? What what's your website yellowbird. Homebuyers homebuyers dot com and you can find yet or youtube and everything is all up there a read through the the the way they talk about things on their website is so so fun because they're like we love or these. Are How many houses that you know we've taken care of a cat lovers or hoarders and it's just a fun. You guys do marketing fun. One and I really appreciate that we do we. We made a conscious decision to put our faces everywhere to cause to separate ourselves from just a we you buy houses sign because it's kind of it can be a faceless. Kinda sketchy industry where we buy houses selling things so we put our faces everywhere including including on every house we buy in it really gives people you know a good sense of you know a sense that we're real and we're real real people and they deal with me when I come to the house. It's like Oh this. I saw his face. Here and people feel better about that. That's what we try to do with it. Yeah and I know this is audio but he's not not a bad looking guy. Everybody Listen Josh Yeah there. We go. We'll just leave it at that all right so you talk about you know you guys are doing about thirty. The house's Mont and you guys are increase in growing your own real estate portfolio right so you guys have a bunch rentals and then you also work with investors so you'll you'll flip an opportunity unity to a hedge fund or Private Equity Group. What the heck does that look like so that's been a big focus of ours lately because funds like funds like American Homes Veran. I G you know there. There's five or six that are actively buying vying in Jacksonville in their building. they're building rental portfolios with institutional money so they have a specific by box of houses. They're all different but act typically. It's one thousand nine hundred and newer at least three beds to bass at least twelve hundred square foot with a garage is typically thereby box and they're great buyers because they're all cash they can close really quickly and they're they pay really really good numbers. They buy on cap rates so what I've seen. Is You know a quick easy numbers a house that Zillow says is worth one seventy five. They're paying. They're paying one sixty two one sixty three form so a house that Zillow says is worth one seventy five that I used to buy used to have to buy I for one oh five or one ten to make a profit off now I can buy for one forty eight or so and flip it to them and just be comfortable that there are a buyer and make seven or eight grand off it so it's really opened up a lot of options. It's allowed us to pay a little more for stuff and they're they are hitting hard right now. All those funds are buying really hard hitting. MLS hard they're marketing to investors and homeowners are so if you're not if you're not looking at nine hundred eighty stuff newer in your market and trying to make connections with the real estate agents that are facilitating these funds in your market. You're you're missing out on a huge opportunity a buying lying opportunity yeah so people who listening and based on the feedback that I get is some of our new right so they may not know some of the terminology so without getting too big into the weeds and pulling out a financial calculator. Could you go you mentioned two things institutional money and then cap rate so capitalization shen cap rate so can you briefly describe what each of those are so. I I think I can do my best the institutional money on his I'm not I'm not one hundred percent but basically it's you know these are a lot. The publicly traded companies so American homes France. A publicly traded company so they have they have money from You Know Wall Street China. I'm not I'm not exactly sure where everything comes but they have. They have almost endless money to buy these rental portfolios in meat for me to talk about act like I know what I'm talking about. When I say institutional money I in my mind. Institutional money is money from overseas. Investments massive massive pension funds that are saying put our money in real estate. They're recruiting these buyers. These buying companies like amherst does one so they so pension fund or something with billions of dollars in recruits amherst to place their money in real estate so amherst is the vehicle geico to buy.
"hedge fund" Discussed on Animal Spirits Podcast
"Was there something in your hedge fund background that made you want to build. Something like this like. I've kind of railed on this for a few years is now the fact that hedge funds have illiquid fund structure in the fees are very high so the hurdle rates pretty high <hes> a lot of times. You don't know exactly what's going on in the portfolio voglio. I mean we'll just stuff like that that you saw there. Maybe is a better way to do. This was that part of the motivation here. Absolutely a huge part of the motivation was the second component on any of their value prop. Which is let's help. People be better investors than they have before an importantly. Let's build a research operation that is completely personalized to what they're investing. In the most frustrating things having been on the buy side was there's all these legal compliance restrictions to basically hedge the managers lack of willingness or lack of ability to explain his aggies and while it was whether it was selling perceived in complexity when they're just going along. This basket of thirteen funds thirteen stocks. They're buddies these. Are you know there's a number of different reasons for it but the bottom line was manager is would often not communicate without piece actually worked at simone funds so i worked at a fund called fairlon before that i i worked in a phone call cerberus. I had a ton of respect for those funds but it was the relationships that other funds that i saw where they were not communicate with l._p.'s except for maybe if they swung by the office they were they if they were in the area or quarterly letter and they relied on things like three five year lockups all these kind of gates to basically say this is how we're going to retain clients i i said i want to go build and operation where we can build the most transparent we believe high quality investment products but also we have no lockups we have have can get money in and out titan within two business days and so we purposely designed it so that we had to put a high bar ourselves to basically inform clients and so our retention is only correlated with our ability to effectively explain to our clients what investing and why and so that's the bet we're making longer-term. Where does this fit in the financial services the universe are you do you see yourself as competing with betterment of wealth front and traditional robo advisors.
"hedge fund" Discussed on Bloomberg Radio New York
"Fund bonanza when it comes to conferences this week. We've had both the salt conference in Las Vegas as well. As in conference that we've been hearing from some of the luminaries in the hedge fund industry, but that raises the question of how is the hedge fund world doing joining us now to discuss Don Steinberg, he's managing partner at age Kroft partners based in Richmond Virginia, Don, thank you so much for being with us. So let's just get a sense of where we are in terms of fundraising fund openings fund closures for the hedge fund industry. Are they starting to come back? I would say big picture. The things are pretty positive for the industry. You know, if you look long term back in two thousand industry was about six hundred billion in assets today, it steered all time high of three point two billion. We had nine years in a row with gross at the industry last year, it contracted through combination of negative performance and some net outflows of the distri most of those outflows were due to prominent hedge funds closing down. So, you know, in general, the industry's pretty good with that with that shed. It is extremely competitive. You've got fifteen thousand people competed for capital and most of the capital's going to the top five percent of managers based on multiple evaluation factors. Institutional investors used to select a hedge fund Saddam one of the things. I don't understand is. Why are they getting the money? Hedge funds have underperformed for ever an in my opinion. Why are they still getting the money and still able to charge two and twenty or some variation of that? Well, when you look at the hedge fund industry, it's not really an ethic class. I mean, it's obviously made up of a lot of different strategies, each of those strategies should have it so benchmark with that said, you know, the average performance hedge fund industries, a whole I think it's compared much more to the Bloomberg Barclay aggregate index than the S and P five hundred and the reason I say that is seventy percent of the industry is controlled by large institutional, investors, and most of the assets that have come from pensions, endowments and foundations have come from fixed income portions are portfolio, and they're happy hedge funds at diversification to portfolio and outperform the index, and if you look at the Barclay aggregate index it has not done very well over three year period. It's up one point nine percent over five year periods. It's up to point five seven percent. The hedge fund. Disease has outperformed on a three year basis. It's up to five point two one five years. Hold on a second done. I'm struggling with us a little bit because hedge funds first of all the name indicates that they're hedging something. Right. And that sort of not the association people came to came to recognize with hedge funds. They're looking for big performance, and that's reasonable. You had pensions and endowments plowing their money into hedge funds. They have not outperformed. And certainly a lot of times these investment firms would have been better off just inventing investing in index funds. So I'm just trying to struggle with understanding what the edges here. I mean, sort of what the pitch I is that is actually becoming most successful with hedge funds. Well, I guess the first point I would say is, you know, when you say that you're you're probably comparing him to the s&p five hundred and yes, they would be much better off, historically, if they invented the as five hundred the problem with it is if you're a pension fund, you can invest everything. And he s and p five hundred because there is a chance it could sell off significantly like in nineteen twenty nine. It started a a drawdown over a few years worked at went down almost ninety percent. And it took twenty three years to recover. And if you're you know, CalPERS, and you go through that you're not going to pay benefits. So they have to have a diversified portfolio. Supported a thing that hedge fund tried to provide is encore later returns. Now long equity has had a terrible time out before the S and P five hundred and a lot of money is come out along equity a lot of these are closing down, you know, out outperforming in Longford equity where you're focusing on developed markets large-cap stocks. It's just a hard thing to do. But there's a lot of strategies like structure credit distress dead merger arbitrage that you know, are on correlated. And you know, there's certain managers that are very well skilled and the ad value. The people that invested in them. So Don, you mentioned consolidation. It seems like if I want to go out and start a, you know, let's say I leave Goldman Sachs, and I had a pretty good trading career. And I want to go out and raise a couple hundred million dollars for a long short equity fund. Can I do that today or is all the money? Just go into the Citadel's Stevie Cohen's of the world. So here's the math. The math is sitting hedge fund most of these damage and foundations are getting called on by thousands of managers year doing follow up meetings with two hundred to five hundred they're doing a second meeting with fifty allocating to to. It's extremely competitive, but you can raise money if you rank really well across multiple factors, and you don't have to be big, you know, most of the money is going to big managers. But if you have you own institutional quality organization, if you have great bio, if you have an investment process that people understand they can clearly see the differential advantage. You have in form in the market. If you have a good track record in good service providers, you can raise money, but it's it's very hard. And you got to be one of the best in order to raise assets. Don, Steinberg, thank you so much done is managing partner for age partners. Based in lovely Richmond, Virginia, one of my favorite towns. But it's interesting Lisa's. I think about that just can't get past that, you know, my personal bias. I guess what we're belief is that, you know, the traditional long short equity business kind of peaked in two thousand six ever since it's just been a chronic underperformer. And I just can't see given the underperformance. I'm just amazed at the continued amounts of assets the flow to the hedge fund business, given a performance in the fees, although Harvard actually endowment just said they were going to allocate to hedge funds. So don's point. There's a contrarian play going on as well..
"hedge fund" Discussed on KLIF 570 AM
"The entire week's worth of research and financial headlines condensed into an action packed hour. And we're glad you've joined us. We want to make it worthwhile. We're going to dive into a mysterious category called alternatives. So Alex, I'm going to rely on you because you're an experienced market maker. We might get to that as well. But. Explain to me, the concept of an alternative investment. So an alternative is going to be really an alternative to your traditional market centers right publicly traded equity bond funds mutual funds, those kinds of things. And. And when you go into the alternative space, you have hedge funds private equity, maybe. Privately held real estate. And long short strategies global macro, blah, blah, blah. So anything that really is outside the traditional ram. Okay. And you know, what's interesting is they talk about yield alternatives. Now, they put reits in here. Right. Yeah. And so they're putting reits in here as a as an alternative, but they they're they're plenty of publicly traded reits, and they're comparing the yield alternatives. Direct lending best. Best yield direct lending get paid. Yep. Global transport US high yield that's benchmark that at eight preferreds six percent global infrastructure Fahd point eight real estate four point nine. So they put the real estate in here about a. For about a four to five percent yield for the real estate. Right. Okay. So then they talk about the bonds. We've got a bond chart this week and surprising the European yields. So lots of them are negative on the two year. We'll get to that coming up in the program as well. Okay. Aleksei blitz. Just cut to the chase because I went through. Well, we just went through all thirty pages. Or so of this alternate report. That's right cut to the chase. How much money are people making in hedge funds alternative investments, and all the choices that you've got in front of you. So the hedge fund investor really underperformed traditional markets. This tenure annualized return going back to two thousand nine which was really the beginning of this bull cycle. Let's explain a hedge fund. I okay. The charge you lots of money. Okay. That sounds great sign me up. Right. That's okay. So costs a lot, but it used to be a two percent management fee. Plus twenty percent of whatever you make right? And that went to the hedge fund owner, and that's why they got rich. But the basic premise, I'm going to own a basket of stocks. What a what a what does it look like, my basic premise? You're going to own a basket of stocks. And and then you're gonna have a hedge against that. Right. So I'm gonna short stocks betting. They'll go down. You're you're going to. It's called a market neutral. So. The theoretical phases of this is that your long undervalued, stocks are short overvalued stocks. And that hedges you through the ups and downs and smoothed out the ups and downs of market volatility while still providing a a decent return is the idea. Okay. So J P Morgan asset management kudos. They have great research because they're huge, right? Okay. Walk us through the returns that people have experienced longer term in the different categories. Okay. So the top performing hedge fund strategy was global equities averaged ten percent. What time what time period that was ten percent from two thousand nine hundred eighteen that's after the bear cycle. Yeah. At the beginning of the bull. Okay. Not cheapest cheapest you could get not dissimilar from what our clients enjoyed if if we're going to just benchmark it after the crisis that's six or seven.
"hedge fund" Discussed on Capital Allocators
"So basically every student on this campus speaks at least passable English. It's funny. They use the most interesting words because it's really a book calculate has a set of verbal test the Gow, so they have the most interesting in unique English vocabularies. So you hear words that are perfect appropriate. But something nobody would actually say, and do you remember I don't remember if that my head, but it was like reading poetry when they would write something that is really interesting. It makes sense. But that's no one else would say it that way. These students were amazing, and I was teaching students from both of them. I had at one point about sixty students, and I was teaching them about financial markets about what hedge funds were about how markets work how you can find out how you can find alpha and allow. Out of those students went on to work at Wall Street firms or hedge funds, I sometimes wonder like what's the total amount of L generated by the people that I taught are you still in touch with? Well, one of them was a partner with me at time river, one of the most talented thinkers, and traders, I've ever met brilliant. It's got to be in the billions because the less students have worked all the name-brand hedge funds students that I taught during that time I've worked at all that educational system and he described as hierarchical. How did you think about the complexities of what that means for educational opportunity and the growth of the population compared to the US system? So in some ways, there's things to be admired in the Chinese educational system. It is it's pretty pure the scores are your scores and not a lot of behind scenes manipulation that will allow you to to get a student in you. You're not gonna have could be based on your regret athlete is going to be based on whether your your parents can write a big check. It's pretty pure. So your scores your score when you take the test, but given the importance of that you can imagine some socioeconomic stradding of who gets the right preparations to take the test. That's absolutely, right. I think that's true. There are students from all over the country at the two schools. But yeah, that's true. There's no doubt about that. When does it look like in terms of homogeneity or heterogeneity of the student population? Given that there's really one fac. Actor determining where they go to school. Well, they're all brilliant. This test is a two day long test. It makes the SAT test. Look very very small compared to what they do students often faint going into it. Because it's that important this one test in many ways attorneys your fate. If you have a very very high score, you gotta ching HUA or beta if you get a next level score you get to go to that quite as prestigious university. But it's still a great university. Get.
"hedge fund" Discussed on Bloomberg Radio New York
"For new hedge funds in twenty nineteen are hedge funds that are starting in two thousand nineteen actually crazy here to tell us more is Cathy Burton, Bloomberg news hedge fund reporter, Kathy. So who if anyone is crazy enough to start a hedge fund in two thousand nineteen after the struggles last year. Well, as always there are people willing to try because they believe that they will be the ones. The one to win the wants to do it though volatility. Look at it markets all over the place, and perhaps this is the year, John, you're right. We'll see. But anyway, so far investors are to some point sitting on the sidelines. We only had one firm that we believe will start with more than two billion dollars in twenty nineteen. And how does that compare to other years? I mean, one billion sounds to me like a lot of money, but I realize and hedge fund land it could be peanuts. Yes. Last year, they were two funds that had way more than a billion dollars. One was a record eight billion dollars starting and in previous years before the financial crisis. There were ten or twelve firms every year that would start with more than a billion dollars. Okay. So how are they adapting if they are adapting to the new landscape those that that are starting at twenty nine thousand nine well, some people for the first time would are taking seed money from people that means they sell. Part of their business in exchange for a amount of money. That's locked up for some period of time and a share in the profits. And there are people doing that that have really high pedigrees that they're still need to take money from another big investor because it's so hard to attract capital. So you mentioned this firm that starting this year was one billion who is it. Do they have a strong pedigree? Is that part of it? They do they're two people coming from set at all and platform firms things that are multi manager firms are sort of the one of the only places that people are giving money to and I think that's why they've been able to get past this magic Mark of a billion dollars. And what do you mean by multi manager strategy, generally what they do is they have little teams, and they give each team a little bit of money, and then they all go and try and compete against each other. So as the diversification play, I guess exactly kind of game of thrones. Are they changing the way they invest to better suit the needs of? Individual investors. Perhaps not really really the only thing they're doing is that a lot of them are developing long only products because they realized that's the only way that they can get more money coming in the door because shortening hasn't worked because their name. Yes. It is. That's a good point. So. So. Twenty. Good. Good points. Funds in two thousand nineteen are looking a lot less like hedge funds. Well, there there are certain firms that still have their head track practice, but just people pull money from that they say we need to stay in business. So they're creating these often quantitatively driven cheaper products that are long only, and they give they sell them to institutions and there maybe bring in a few basis points not to in twenty that they're used to. So the point about shortsellers reminded me of David Einhorn who you've done a lot of reporting on this year. How did he end up at the end of two thousand eighteen it was a disaster. He lost a nine percent in December. And he's down thirty four percent for the year. Holy smokes. Just unbelievable. How wrong all his what caused that big of a drop? Can you tell he has a very concentrated portfolio and throughout the latter half of the year? He's basically said every. The thing that I was betting would fall rose and everything that I was betting would rise fell. It's just that his his portfolios, very concentrated, he's value oriented, which means he buys companies that he thinks are cheap and those companies haven't gone up in this market, and how much does all of this depend on the credit cycle. And where to the the hedge fund managers that you've spoken to where do they see us in the credit cycle? What sort of opportunity does that does that present to them? Certainly people think that we're at the end of the credit cycle. There will be dislocation when that all comes apart, and that should create an environment. That's more shall we say normal that bad companies will fall in good companies will rise. So maybe people like David Einhorn. We'll be able to make money in that environment. But for him. He's in such a big hole that it's going to be really hard for him to get out before investors leave when you look ahead to twenty nineteen and hedge fund. What do you think it will look like in terms of redemptions, you think will have as many investors pulling as many firms closing? It's really hard to say. Because of this increase volatility. If we get volatility that has some sort of trend to it, then this could be the first year in a long time that these funds shine, and then we'll get people coming back in. So really depends on the performance. If it's very choppy the way we've seen in the past few months, it's not going to be that helpful. Cathy, Burton Bloomberg news reporter with her great story out this week on what hedge funds are actually starting in twenty nineteen. Thanks for joining us, Kathy. Thank you Peggy. And just ahead on Bloomberg finance invest goes outlook for global financial markets in the new year. I'm John Tucker along with Peggy.
"hedge fund" Discussed on Bloomberg Radio New York
"Since one thousand nine hundred ninety one where he has put up tremendous numbers beating the market consistently by a substantial margin. Let's talk about those days in nineteen ninety one. When you first started Jim chino said when he began is fun. The we're only a few hundred managers and most of them were generating alpha today, there's eleven thousand hedge fund managers, and it seems the same few hundred are generating alpha. What was it like back in one thousand nine hundred ninety one when you launched omega? Well, there was less competition. I'm not sure what the exact number of hedge funds were but one of the districts that strikes me is about a decade ago to today the number of. Publicly traded companies down by about forty percent because of mergers consolidations going private in that same period. Hedge funds have gone up by four fold so number companies down forty percent number of competitors looking for alpha up fourfold, so you it's difficult. But I I never went into the hedge fund business to make a lot of money. I was very happy partner, Goldman Sachs. I was I think at the time fifth highest percentage partner of the firm firm, we're doing well. I love what I did for a living. But I wanted to start a hedge fund is a way of co-invested with my investor perspective investors, the firm that time wasn't ready to have a hedge fund because they were they had vision in their mind, which was incorrect, in my opinion that I'd be short some investment banking client, the firms playing out find out, and they'd have hell to pay affected matters. I'm a long term investor in that had the problem in the firm is really the abuse of match rated because I think they have a lot of hedge funds on the premises. Now. In fact. Fact, there has been a fairly steady stream of people departing Goldman Sachs, but retaining the relationship with Goldman as their prime broker for for that hedge fund, what was the big change when you left Goldman, you had previously said, they were they were pretty supportive of everything, you know, what how did they manage to to mature their views on this passage of time. If you go back to ancient history really a decade before I left, I was telling Goldman they were they were making very big mistake by not being an asset management and the senior partners at the time said, you don't get it Lee. We're of the view that brokers should do brokered money to do my management don't compete with your customer. And I would say they wake up smell the roses. Look at Merrill, Lynch management. You have web division. Peabody CSFB. Everybody was in the business except one firm who they viewed as their archrival in trading. There was salmon brothers, right? One day of Nance that Bob Salomon junior. Who's a good man was leaving the research department to start Solomon brothers asset management at which point the Steve Friedman. Bob Rubin Corby 'em said, you know, you're right. We made a mistake. We should go into the business. Would you leave research and start acid management and build us a business like you built us in research for the record net blow my own horn. But just factually. When I took over Goldman research in one thousand nine hundred and I guess it was seventy five seventy four we relatively unranked. I left the research department were number one. I number one in Greenwich research number one financial world. I also happen to be the strategies and that was number one for nine straight years in strategy. So I was ready for a new challenge. And I accepted their invitation and started Goldman Sachs asset management, and frankly about a year after I started I realized I had made a mistake. The firm is a great firm, and they understood Addison the management fee revenue, and they were interested in me building a big business. I was really focused on an investment performance. I wanted to co invest with the investors and build a track record and became obvious to me that they wanted me on the road, innovating new politics raising more money, and I wanted to manage money. You know, I was a guy that discovered Henry singleton of Teledyne Wall Street and made a big bet on him and proved to be correct. And so I went to them. I said, look, you know, I'd like to start a hedge for his part of the asset management business. And they originally said, yes. And then they change their mind. And they changed your mind. Again, all this is nuances. They had sponsored a fun called the water street recovery fund, which was a vulture fund. They would buy up distressed debt from defaulted. The issue is and reorganize them. And that created some consternation from the high yield clients of the firm serving in bonds, which dated no the firm was intending to restructure the companies. And so they had a lot of adverse publicity. John Weinberg bless him. Was impressed by the negative feedback and winning enclosed a fund down returned all the money, and they came back to me. And they said, you know, forget about it. We're not going to go for the frying pan to the fire. No hedge fund, we'll put you on executive committee. And you run a business manager not as money manager. You couldn't be lending manager come into contact. And a lot of coverage of if you're on the executive committee. I told them my wife went home at my wife came up with a great line. She said, you know, how old are you gonna be rich? It'd be before you do what you wanna do went back. I said, listen, it's been a great place to me Goldman, I really want to manage money and basically. I'll stay long as Mitch day. But I would like to basically leave and I stayed for a year and consulted for a year. And it was a great place. I grew up Goldman and have great great feelings about Goldman. So walk us through what your process was like it omega. I liked to have a lot of arrows hit my quiver. You know, it's very hard to take fifteen or twenty percent off the top and beat the market. Okay. And so I like to have a lot of different strategies that I could pursue. And basically, we try to make money for investors in five different ways. First stocks are high risk financial assets short-term bonds and cash low risk financial assets. And we spent a lot of times Stephen who on my part and we've been working together for over forty years. Terrific guy, terrific guy, and we spend a lotta time starting the economy the fair valuation and try to figure out is the market undebated going up going down. It can be fully value going up who cetera because that determines exposure. Risk assets. Number to all the studies. I've read on portfolio return say more important being the right individual stock in any one year is also being the right asset class. So we spent a lot of time looking at returns in fixed income equities and fixed income we cover the gamut where government bonds high green double binds, a high yield bonds structure credit, and we're trying to look for destroy new winter, which to miss price asset. Okay. Third thing we do is that bread and butter business. We why spend most of my time is undeveloped oxen alongside not a success. So we spent time looking for with stocks the short side, and then we do sort of macro trading where we'll basically go longer shorter currency longest show commodity long, should it index away from the S and P five hundred and we risk about two percent of capital in the macro area to make an incremental five or six percent a year. So I would Bill omega sanguine equity oriented hedge for with the macro capability coming up. We continue our conversation with Lee Cooperman of omega advisors discussing what.
"hedge fund" Discussed on Bloomberg Radio New York
"Since one thousand nine hundred ninety one where he has put up tremendous numbers beating the market consistently by a substantial margin. Let's talk about those days in nineteen ninety one. When you first started Jim chino said when he began his fun. We're only a few hundred managers and most of them were generating alpha today, there's eleven thousand hedge fund managers, and it seems the same few hundred are generating alpha. What was it like back in one thousand nine hundred eighty one when you launched omega? Well, there was less competition. I'm not sure what the exact number of hedge funds were, but one of the statistics that strikes me is a bad decade ago to today. The number of publicly traded companies are down by about forty percent. Because of mergers consolidations going private and that same period. Funds have gone up by four fold. So that's number companies down forty percent number of competitors looking for alpha up fourfold. So, you know, I it's difficult. But I I never went into hedge fund business to make a lot of money. I was very happy partner, Goldman Sachs. I was I think at a time fifth highest percentage partner of the firm firm, we're doing well, I loved what I did for a living. But I wanted to start a hedge fund is a way of co investing with my investor perspective investors, the firm that time wasn't ready to have a hedge fund because they were they had vision in mind, which was incorrect, in my opinion that I'd be short some investment banking client that firms will find out and they'd have held to pay vacted matters. I'm a long term investor in that had the problem in the firm is really the abuse of match rated because they think they have a lot of hedge funds and the premises now. In fact, there has been a fairly steady stream of people departing Goldman Sachs, but retaining. In the relationship with Goldman as their prime broker for that hedge fund, what was the big change when you left Goldman, you had previously said, they were they were pretty supportive of everything, you know, what how did they manage to to mature their views on this? Well, just the passage of time. If you go back to ancient history really a decade before I left, I was telling Goldman they would they would make him. Very big mistake by not being asset management in the senior partners. At the time said, you don't get it Lee. We're of the view that brokers should do Brookwood money manager do my management don't compete with your customer. And I always say wake up smell the roses. Look at Merrill, Lynch asset management, you have Webster which division. Peabody is. Everybody was in the business except one firm who they viewed as their archrival in trading was Solomon brothers. Right. When day Salman asked that Bob Solomon junior. Who's a good man was leaving the research department to start Solomon brothers asset management at which point the Steve Freeman. Bob Rubin called me and said, you know, you were right. We made a mistake. We should go into the business. Would you leave research and start acid management and build us a business like you built us in research for the record net blow my own horn. But just factually when I took over Goldman research in one thousand nine hundred, and I guess it was seventy five seventy four we unranked and when I left the research department, we were number one. I number one in Greenwich research number one financial world. I also happen to be the lead strategist. And that was number one for nine straight years and strategy. So I was ready for new challenge. And I accepted their invitation and started Goldman Sachs asset management, and frankly about a year after I started I realized I had made. A mistake. The firm is a great firm, and they understood acids from the management fee revenue, and they were interested in me, Bill big business. I was really focused on an investment performance. I wanted to co invest with the investors and build a track record, and it became obvious to me that they wanted me on the road, innovating new products raising more money, and I wanted to manage the money. You know, I was the guy that discovered Henry singleton of Taliban, Wall Street and made a big bet on him and proved to be correct. And so I went to them. I said, look, you know, I'd like to start a hitch for his part of the ass imagine business, and they originally said, yes. And then they changed their mind, and they changed their mind. Again, all this is nuances. They had sponsored a fun called a water street recovery fund, which was a vulture fund. They would buy up distressed debt from defaulted. The issue is and reorganize them. And that created some consternation from the high clients of the firm shortly sewing them bonds, which they dated know the firm was intending to restructure the companies. And so they had a lot of adverse publicity. John Weinberg bless him. It was impressed by the negative feedback and winning enclosed a fund Dan returned to all the money, and they came back to me. And they said, you know, forget about it. We're not going to go for the frying pan to the fire. No hedge fund will put the executive committee, and you run a business manager not as money manager. You couldn't be lending manager abuse you come into contact and a lot of coverage of if you're on the executive committee. I told them my wife went home to a bad at my wife came up with a great line. She said, you know, how old are you going to be Richard? It'd be before you do what you wanna do. It went back. Listen, it's been a great place to me Goldman, I really wanna manage money and basically. You know, I'll St. Lois mistake, but I would like to basically, ultimately, even I stayed for year and consulted for a year. And it was a great place. I grew up a Goldman and have great great feelings about Goldman. So walk us through what your process was like it omega. I like to have a lot of arrows in my quiver. You know, it's very hard to take fifteen or twenty percent off the top and beat the market. Okay. And so I like to have a lot of different strategies that I could pursue. And basically, we try to make money for investors in five different ways. First stocks are high risk financial assets short-term bonds and cash or low risk financial assets. And we spent a lot of times Stephen who are my partner we've been working together for over forty years. Terrific guy, terrific guy, and we spend a lot of time studying the economy the fair valuation and try to figure out is the market undebated going up who vaguely down it can be fully value going up cetera because that determines exposure. Risk assets. Number to all the studies have read on put foil return, say more important mean the right individuals stock in any one also being the right asset class. So we spent a lot of time looking at returns in fixed income equities and fixed income we cover the gamut where government bonds high green double binds, a high yield bonds structured credit, and we're trying to look for destroying new into which to mis-priced asset. Okay. The third thing we do is that better, but a business. We'd why spend most of my time is under veg dachshund alongside not a success. So we spend time looking for with stocks the short side, and then we do sort of macro trading where we'll basically go longer short currency longest show, a commodity long assured it index away from the S and P five hundred and we risk about two percent of capital in the macro area to make an incremental five or six percent a year. So I would Bill omega saying we're equity oriented hedge for with the macro capability coming.