After losing 26.80% in 2008, most if not entirely due to the wrongness of the markets, which apparently didn’t get the memo that Perry People are not to be fucked with, we are back, my beautiful babies, and ready to dominate. You know it, I know it. We’ve identified the many, many holes in this bitch and are just standing by, ready to plug the shit out of them. Thinking men that we are, however, we would be remiss if we did not reflect on what we’ve learned from this year’s unsolicited reaming.
PPI Annual Review [PDF]
I feel like using Neiman Marcus as a proxy for “luxury goods” doesn’t make much sense, despite their claims otherwise. While they may stock lots of overpriced crap, I’ve never found their stores to be particular pleasant, and think using say, LVMH might be, if you must use only one, a better proxy for luxury.
“Q4 Review
The Fund’s negative performance came from three primary areas: our European share class
arbitrage position in Volkswagen, significant mark downs to our global sidepockets & other
illiquid investments, and investing prematurely in US leveraged loans on an unhedged
basis.”
Investing prematurely…on an unhedged basis. Classic.
I, once, invested in a house prematurely on an unhedged basis. I, once, invested in GOOG prematurely on an unhedged basis.
Well, I’m glad we cleared that up.
So, what are the new maxims, and why are those true?
Here’s one: we are fucking fucked. Why? Because no one learned a thing.
Perry?
“Many Funds Broke the Buck”?
Who other than Reserve?
perry capital, genius@4. little hedge fund, has about $11bn in AUM?
I (@2 here) just (prematurely and unhedged) bought a $4 coffee and a muffin, from Starbucks. Sold them across the street at Dunkin at a loss.
give us more letters
I second #8. This sh*t is more hilarious than all Ponzis/trophy wives/equine daughters combined.
Spitzer, prematurely and unhedged, jumped into Dupree for a bumpy ride. Naked call options, you might say.
I am encouraged to see someone, anywhere in America accept responsibility for their mistakes and to humbly apologize.
In fact, I’m stunned.
1 The dirty secret is that “luxury goods” are not as luxurious as they used to be. They’re now aimed at a more mass audience – think Japanese office girls, who love buying Vuiton bags and Tiffany silver jewelry. Or Jersey girls who like going to N-M at the Short Hills mall. With the movement to semi-mass, the costs have been driven out and quality has declined. The handbags are not made by artisans in Florence anymore, but instead in the Chinese countryside. The lux marketers are walking a very fine line, risking a loss of their franchise while developing a more mass market.
@11 In case you haven’t noticed, most HF ‘Dear Investor’ letters from last year have been similar letters of contrition. It’s called saving your ass by blaming “maxims” and the “macro environment”.
wonder how leveraged their unhedged bets on leveraged loans were, hmmm…
@12 — Absofuckinglutely. All it takes is a critical mass of Japanese office ladies to realize that LV is shit (granted there are cultural obstacles to), and that what they own is most likely pirated shit, and boom goes the dynamite.
@12 — Absofuckinglutely. All it takes is a critical mass of Japanese office ladies to realize that LV is shit (granted there are cultural obstacles to), and that what they own is most likely pirated shit, and boom goes the dynamite.
Perry is only $8B AUM right now. Anyone smart, including the partners already bailed. 2 rounds of layoffs later and now they understand the market? What happened to all the opportunities Perry wrote about in his 6 previous investor letters?
Perry is only $8B AUM right now. Anyone smart, including the partners already bailed. 2 rounds of layoffs later and now they understand the market? What happened to all the opportunities Perry wrote about in his 6 previous investor letters?
Perry is only $8B AUM right now. Anyone smart, including the partners already bailed. 2 rounds of layoffs later and now they understand the market? What happened to all the opportunities Perry wrote about in his 6 previous investor letters?
when did you get fired, @17/18/19?
@15-18 are you the same dumbass?
too tabular, didn’t read.
Maxim: I won’t blow in your mouth.
Why?: Because some girls (or boys if that’s your thing) don’t like to swallow and need that assurance.
What went wrong: People will lie to get what they want in the short term.
15 True that, but now that the lux good makers are almost all public companies did they have any choice but go the semi-mass route? They now need to deliver consistent profits and growth, which would arguably be difficult had they stuck to the old formula (of providing true lux).
The problem with LVMH’s handbag line is simple:
The typical bag likely costs around $40 for LVMH to manufacture and is subsequently sold for approximately $400.
LVMH is probably in for another $50 a unit to market them (flashy magazine adds, fashion shows, celebrity product placements, etc.)
A Chinese company can counterfeit them for $20. No marketing costs. They’re sold out of garbage bags on street corners for $40. The Chinese bags are a good enough replica that you can’t spot the fake from arm’s length (even if you’re the one of those obnoxious pricks that swears a $500 bottle of wine really is ten times better than a $50 bottle..and that you could consistently discern between them in a blind taste test).
Women are fickle and handbags are a fashion accessory subject to very trends perpetuated in part by LVMH as a mechanism to keep sales volume up. So even if the genuine product lasts 10 years and the fake lasts 2 years….the fake still lasts 6-12 months longer than it will be possibly be considered fashionable.
Moreover, people don’t feel bad about buying a counterfeit when:
There aren’t any safety issues.
They (rightly or wrongly) perceive the company that’s selling the genuine product to be intentionally overpricing its products as a means of keeping it out of their reach.
The individuals that have obtained the genuine articles are perceived to flaunt their wares while simultaneously looking down on those that can’t afford “true lux.”
They realize that paying $400 for a gaudy handbag that will be out of fashion in a year is a ridiculous waste of money…but don’t mind a bunch of strangers assuming that they’re well off.
@ HH
Ah, but when the average rich girl has 700 handbags, and she uses each maybe what, 5-10 times/decade, she can brag, 20+ yrs down the road when they come back in style and she has one of the originals, I mean, like, duhhhh
#20…..didnt get fired but Perry Capital is only $8B in AUM. Now you don’t go from over $15B-$8B in AUM with only a 28% decline unless a lot of your investors and partners left. Read through hedge fund alert…..several of those who left were published. You keep holding on though. Hmmmm try to make 56% gains in credit with a portfolio half the size just to get to your high water mark and begin collecting incentive, ORRRRRR just close up shop after sucking dry management fees?
I prefer only Maxim, the magazine thank you