Bill Miller Fired by Massachusetts Pension Fund
Well, you did not expect them to stick with him, did you?
Bill had a huge day Tuesday, up 4.54% and crushing the S&P 500, but lost one of his largest Institutional mandates today, as the Massachusetts state Pension Fund pulled the plug and fired him. They also shitcanned Mazama Capital, who made one of the biggest roundtrips I have ever seen, buying CROCS, Inc in the single digits, watched it rise to $75, and did not sell any as it crashes to new lows today...at $4.
Wow.
Meanwhile, we have been having a spirited discussion on money managers over at Twitter, and participant JimPunkrockford was so moved that he wrote a song about Bill Miller vs Peter Thiel.
Peter was down abut 7% in July, but no worries. He sold his crude futures position in the spring and is getting some relief on his financial shorts today. Given he is probably posting the biggest YTD gains of any alternative manager running over $3 billion, and has attracted well over a billion dollars in new money over the past 3 months, he is doing fine. No guts, no glory.
This is like techno on acid...from the twisted mind of a value investor.
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Massachusetts pension fund fires Legg, 4 others
Reuters
Previously
Disaster Du Jour Turns Mazama into Goat
1440WallStreet
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The Lost Buffett Letters
I am no great Buffett-ologist. And I don't consider myself to be a value investor by any means.
And while I don't have a tipline, I do have scores of relationships that date back nearly 20-years. From time to time I pass along things of interest, and Warren Buffett's very first partnership letter, written when Eisenhower was President, and the twenty that follow are apparently hard to come by:
2/11/59
A friend who runs a medium-sized investment trust recently wrote: "The mercurial temperament, characteristic of the american people, produced a major transformation in 1958 and "exuberant" would be the proper word for the stock market, at least".
I think this summarizes the change in psychology dominating the stock market in 1958 at both the amateur and professional levels. During the past year, almost any reason has been seized upon to justify "investing" in the market. There are undoubtedly more mercurially-tempered people in the stock market now than for a good many years and the duration of their stay will be limited to how long they think profits can be made quickly and effortlessly. While it is impossible to determine how long they will continue to add numbers to their ranks and thereby stimulate rising prices I believe it is valid to say that the longer their visit, the greater the reaction from it. Warren Buffett
Will Appaloosa’s Returns Lead Straight to the Glue Factory?
Leaving the leafy suburbs of Chatham, New Jersey to go to Detroit is never a good idea. The Motor City is a world apart from Chatham, something David Tepper did not take into consideration before the got involved in the soap opera with Delphi Corporation.
Everything in Michigan is toxic at the moment, and Tepper probably does not own a hazmat suit. But his investors are likely to be simmering while he horses around in Michigan, and Delphi is not happy about being spurned:
A U.S. bankruptcy judge allowed Delphi Corp. to move forward with a lawsuit that seeks to force hedge fund Appaloosa Management LP to complete its deal to invest in the bankrupt auto parts maker. Judge Robert Drain refused a request by Appaloosa and other investors to dismiss the case
But the judge reserved some harsh words for Appaloosa in refusing to dismiss that hedge fund, noting other claims, including that it interfered with Delphi's efforts to secure loans, according to the report.
Drain said that were Appaloosa found to have undermined Delphi's effort to get its loans, it would be "truly jaw-dropping conduct that might in fact rise to the level of a bankruptcy crime," the AP reported. The wire service said that Delphi, a former unit of General Motors, wanted Appaloosa, founded by David Tepper, either ti take an equity stake in the company or compensate Delphi for the unraveling of the deal. CFO.com
Of course, the deal is just one of the headaches Appaloosa Management is facing. Their 2008 returns are among the worst in Hedgistan, and they are not they only hedgies that will need to post big numbers with five months to go:
Mr. Bartiromo Prints 52-week Lows
Will Jono Steinberg's, Maria Bartiromo's hardworking husband, succeed in making Wisdom Tree Investments Inc. (WSDT.PK) in to a winner? Jonathan's charmed life took a U-turn several years ago as his father's health failed and his Individual Investor publishing unit essentially shuttered. But it did not kill him, and he is slowly getting stronger, although the 52-week lows in his stock might mask his accomplishments:
As exchange-traded funds sponsor WisdomTree Investments Inc. (WSDT.PK) continues to build its base of assets, it faces the same quandary of most start-ups -- elusive profits.
In the second quarter, the company reported net losses of $7.96 million, or 8 cents a share, in its first-ever earnings call after markets closed on Thursday. That represented a 17% increase from a year earlier....That narrowing in losses between quarters came as a result of declining expenses and greater revenue streams in the three-month period ended June 30, according to the company.
The conference call was unusual since WisdomTree is the only pure-play publicly traded ETF provider. The meeting, which lasted more than an hour, provided a rare glimpse into the financials of a sponsor which has been particularly aggressive in the fast-growing $576 billion ETF marketplace. Seeking Alpha
Wisdom Tree is growing like a weed however, and might approach the break-even level within 18 months if they continue to garner new mandates and keep costs in line. They are getting inflows, a rare sight in this market:
Global Macro Strategies Leading the Pack in 2008
The remarkable run in Hedgistan has hit a speedbump, but not all strategies are created equal.
Global Macro funds are doing just fine, although it is not all good. Barton Biggs is flailing around, and several high-profile fund managers are coping, but hardly thriving, in this tape:
Hedge-fund managers following the path of George Soros, who made a fortune by exploiting financial turmoil, are beating their peers for the first time since 2003 on wagers the global economy won't improve anytime soon.....Macro funds, which can trade everything from Apple Computer Inc. shares to zinc futures, returned 18.8 percent in the 12 months ended in June, five times the industry average and the most of any strategy, according to indexes compiled by New York- based Credit Suisse Tremont Index LLC. While two of their favorite trades -- betting financial stocks will fall and oil will rise -- turned unprofitable last month, the best-performing funds expect the bad news to continue. Bloomberg
Fund of fund lemmings will likely continue to shovel money at what is working, and select Global Macro managers are getting inflows, which are rarer than a green stock these days.
