From MarketWatch: SAC Capital Advisors LP told investors in a letter that it got a government subpoena, according to a person who received the update from the hedge fund. Read more »
letters
Yesterday we excerpted a story from Paul Tudor Jones’ most recent letter to investors about how we need to fix the economy like a very smart doctor treated his foot injury ten years ago. A number of you asked for the full note, which is after the jump. Read more »
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Communiqués
Ten Years Ago Paul Tudor Jones Had An Acute Case Of Plantar Fasciitis
By Bess LevinThis story and more in Tudor’s latest letter to investors.
Our extraordinary times offer extraordinary opportunities, but as with most opportunities, there will be winners and losers.
Economies in the developed world find themselves with unemployment levels not seen since the Great Depression. The response from respective governments has been massive fiscal stimulus in conjunction with monetary easing. And now many of these governments, having exhausted all fiscal stimulus measures that are politically feasible, are about to embark on another round of quantitative easing. The Bank of England, the Bank of Japan and the US Federal Reserve have implemented, or are considering implementing, significant rounds of government securities purchases.
Will these measures actually succeed in lowering the chronically high levels of unemployment? Or are the unemployment problems of these countries so structural in nature that these policies will have only limited impact?
We’ve enlisted modeling and forecasting firm Macroeconomic Advisers, LLC to assist with answers to these questions. But, first, a story: About ten years ago I had an acute case of plantar fasciitis in the left foot, a condition in which the fascia, or the covering right beneath the skin, had become highly inflamed. I asked Pete Egoscue (egoscue.com), a renowned postural specialist but one without medical training, to take a look at my foot. Pete had, after all, healed a number of people I knew, including my wife. Because Pete was self-taught, I was a skeptic— as any good trader would be.
Pete said that he did not need to look at my foot because my foot was not the problem— a response that suggested I was dealing with a quack. But I was patient and continued to listen. He proceeded to explain that the pain in my left foot was the consequence of a structural, postural deficiency in my hip alignment. My right hip was rotated in such a fashion as to make the left side of my body do all the work and bear all the weight, culminating in the inflammation of my left foot. “The pain you feel in your left foot is just the symptom,” Pete said. “If you treat it symptomatically and ignore the structural issue, you will never solve the problem.” I did not immediately grasp the full meaning of his words, but I followed his prescription,and in a few days the pain was gone. Some time later I realized that those words were probably the wisest I have ever heard from any human being, and that they apply to more than just the human body.
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Communiqués
Market Tumult Sucking The Fun Out Of Hedge Fund Letter Writing These Days
By Bess LevinThe uncertainty about the world that Mr Druckenmiller has conveyed in many private conversations over the past few weeks finds similar expression in the quarterly letters that other hedge fund managers have sent out to their investors. The letters from Greenlight’s David Einhorn are usually scoured by investors for prescient market themes. But in his latest quarterly letter, Mr Einhorn was more reticent than usual. John Paulson has also moved away from his bullish views. “Nobody is sending out definitive ‘this is my view’ letters these days,” says one senior hedge fund executive at a leading bank. “Nobody has any conviction. We go through rallies and we go through sell-offs and nothing is well sustained.” [FT]
The aforementioned good-bye letter.
Forty-six percent of you are likely feeling prettay prettay prettay good this morning, possibly on account of celebratory morning drinks. The rest of you are probably in not as great a place, on account of having just thrown away the last 4-6 months of your lives. Read more »
Are you among the 42 and 39 percent, respectively, relieved? What will you be doing to celebrate? Running out and buying the next level of books during lunch? Not as lucky? Feeling like you just threw away the last four to six months of your life? Want to get angry? Want to make someone pay? Wanna see the institutes denial of your quest to put their precious three letters next to your name with three letters of your own? Read more »
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Communiqués
Scottwood Capital’s Advance Of Month End Ass-Grovelling Letter May Not Have Been Necessary
By Bess Levin
On May 28, Scottwood Capital Management sent a letter to investors to let them know that despite never in the firm’s history had they discussed results in writing during the month, “aberrational circumstances” had forced them to do so. Obviously, one thought this could safely assume they meant things were ass-bleedingly bad, particularly because there were lot references to “lessons learned” and those that received a hard copy of the note reported tears streaked down the page. So more like rectal-prolapse bad. As it turns out, it was more like just a bit of chafing. According to investors the fund ended May down -18.5 percent, leaving them at -2.1 percent for the year.
It’s CFA time tomorrow and we know everyone taking it is going to do great! And if you don’t, it’s not like this shit matters– just ask any of your MBA friends. Alternatively, think about it this way– becoming a Chartered Financial Analyst will spell the end of your budding pornography career. Plus, we’ll be throwing a special pity party for the failures, so there’s that to look forward to. And because I know some of you are sensitive:
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Communiqués
Scottwood Capital Would Like To Take A Moment To Address The Unprecedented Ass-Bleeding
By Bess LevinThey don’t typically do so but this has been an extraordinary month and one which begs a whole bunch of questions, including but not limited to, what happened, where are we now, were we drinking too much of our own Kool-Aid and, most importantly, what does rectal prolapse really feel like?
ESL founder and Sears Chairman Eddie Lampert released his annual letter to shareholders yesterday, in which he unloaded a year’s worth of angst. First, the rating agencies. While Eddie understands that they sometimes err on the side of caution, he just doesn’t agree “with all of the critical qualitative conclusions.” Next, business leaders, regulators, public officials and journalists- they’re all the same. They “have become an echo chamber of self-support and self-congratulation, whether on TV, in print or at numerous conferences. Their words and their actions are often self-serving and they are typically regarded and reported on as if they were obvious and selfless.”
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