Rising hedge fund stars crushing former stars Einhorn, Ackman

Discussion in 'Wall St. News' started by learner88, Jan 19, 2018.

  1. Mr Einhorn and Mr Ackman have already made their billions. Losing now has little personal financial impact. Impact is more on the ego today.


    Einhorn's Greenlight Capital fund returned a meager 1.6 percent in 2017, according to an investor letter. And Ackman's Pershing Square declined 4 percent last year, according to its website.

    Part of the reason may be the rise of computerized trading. The quantitative-oriented funds could be taking the low-hanging, numbers-based valuation opportunities away.

    Einhorn tried to explain that his fund's current underperformance was due to a temporary phase in the stock market.

    "Despite it being a good year in the market, it was a challenging environment for our investment style," he wrote in a note to clients Tuesday. "We have a value orientation and we take comfort from the margin of safety afforded by the low valuations of our long investments … while we certainly don't believe value investing is dead, it is clearly out of favor at the moment."
    KeLo likes this.
  2. In other words, their method for valuing is outdated. These are the type of managers that will never own Amazon stock because it will always be trading at a premium to it's intrinsic value due to the market having better information.
    Last edited: Jan 19, 2018
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  3. Either its outdated or the market has gotten so stupid that a reasonable man can't fathom it.

    Behold crypto
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  4. How does one quantify all the advantages Amazon has over the competition and the intangible skill of Bezos? These managers think looking at financial reports and calculating the net present value of future cash flows tells the full story.

    This market is about being able to look into the future, not use 1920 methods to calculate the value of a company.
    Last edited: Jan 20, 2018
  5. newwurldmn


    Same statements were made in 1999.
  6. upload_2018-1-20_13-47-14.png
  7. Is the current market similar to 1999?
  8. To me it is, yes. Bitcoin mania reminds me very much of the internet mania.
    I just wanted to post this chart for the investors that forgot that AMZN went from 85 to 8 in 2 years time.
    cvds16 and d08 like this.


    To me the similarity begins even earlier. The 1997-1998 Asian financial crisis and Russian default witnessed a big shift of investment out of the traditional economy and into tech. In the last few years we've had a retreat from commodities and currencies of commodity producing nations and a surge into tech. The similarity is uncanny.
  10. newwurldmn


    Who knows? But value investors historically do very well except in irrational markets.
    #10     Jan 20, 2018