letters to investors

How-to-Write-a-Formal-LetterIn the grand tradition of hedge fund letters to clients informing them that the money they invested is pretty much all gone, many a manager has a difficult time doing a credible rendition of an apology. Even if the words “apologize” or “sorry” actually do appear on the page, they’re typically followed by 1) A positive spin such as “Your one dollar at the beginning of this year is now 4 cents!” and 2) Long paragraphs about how outside forces lost the clients’ money, or how, sure, it’s been an annus fucking horribilis but there are still 14 trading days left on the calendar to turn it around, or how the ass bleeding the fund has suffered is strictly due to the market’s ridiculous mispricing of equity and in no way the investment theses of those in charge. So when a hedge fund manager actually sounds like he really is sorry about incinerating his clients’ money? It feels like you’ve got to give him a least a smidge of credit, relative to his peers. Sure, he bet big and lost it all, but he feels bad about it! Grading on a curve, that’s something. Read more »

Savor this moment, Dow Chemical. Treasure it. Never let it go. Read more »

Or something along those lines. Read more »

Bob Gross The Cat, who rose to prominence as an honorary CIO of the world’s biggest bond firm and had the uncommon intellectual capability to understand when her owner was on television, died last week. She was 14 years old. Bob is survived by her loving masters, Bill and Sue. Read more »

There comes a time in every hedge fund manager’s life when he must admit that he made a mistake. Sometimes that mistake was borrowing money from an investor fund to pay personal taxes. Sometimes that mistake was knocking off that hooker. Sometimes that mistake was thinking investors would be happy to hear that their one dollar at the beginning of the year was now just 17 cents. The point is, they erred in judgment, and while it’s unusual for men of their stature to admit such a thing, on the record or otherwise, they decided to step up and do just that.

For Bill Ackman, yesterday was sort of that day. Read more »

“As is tradition at Glenview when things are going well for our investors, I have worn the same brown suede shoes since January 2nd, and John McMonagle, our Industrials Sector Head, continues to wear the same pair of khaki pants that are holding up better than my shoes.” [AR]

“For years I kept these memos away from anything related to politics. But more recently I began to discuss issues facing the United States, and this has required some mention of policy and thus of politics. I’ve tried very hard to be non-partisan, with a goal of not having readers know my leanings…Because I found America’s recent presidential election – and especially the results – so fascinating, I’m going to move explicitly to the field of politics, but with the same goal of non-partisan expression…If you believe the exit polls, people who were positively influenced by the handling of Sandy could have made up all or more of Obama’s 2.8% margin of victory. If it’s true that Sandy was the deciding factor for 15% of the electorate, and if it caused just a fifth of those people to switch to Obama, that means without Sandy, Romney would have won. I find it shocking that the choice of a president for four years could turn on something as fickle as the weather.” [Howard Marks]

The result is a multi-dimensional man who lives in a bottle, takes his sartorial cues from Flava Flav, and predicts election results “Mr. G” doesn’t even want. Read more »