Real-estate developer Stephen Ross and his partners spent more than a year digging into U.S. banks, including more than 100 with loans to local bakeries, gas stations and amusement parks. They hoped to spend about $1.1 billion buying or investing in lenders. But the deeper they went, the worse things looked. As a result, Related Cos., the New York firm in which Mr. Ross is chief executive, gave back the money it raised from roughly 150 investors, including hedge-fund manager David Einhorn. The firm did find several investments it was interested in but was outbid. In a prospectus, SJB had told potential investors: "We believe the environment presents a significant opportunity for SJB to consummate an attractive acquisition of one or more institutions, whereas the current weakness in the banking sector and a potential long duration of any recovery create a favorable long-term environment to build a successful commercial bank." Terms of the pool required SJB to invest the money within 18 months [but]...with the clock ticking on its 18-month deadline, Messrs. Ross, Blau and Beal sent a letter to investors Aug. 18 informing them that the fund would be liquidated. Investors received roughly 97 cents on the dollar after expenses. Mr. Blau, Related's president, had led the effort to find potential investments for the fund [and] in many cases, didn't liked what he saw, including loans that were secured by portable toilets and bowling balls. "It was a lot of work, and it was hard to make the numbers work," he said. [WSJ]
Warren Buffett And David Einhorn Are In Agreement Re: The Frigidity Of Their Disfavored Investment Ideas
Back in February, in his annual letter to investors, Berkshire Hathaway chief Warren Buffett spent a good bit of time discussing why one shouldn't own gold. Beyond the fact that, according to WB, gold doesn't "change in size and [is] incapable of producing anything," and you'd be much better off buying farmland (which "a century from now will have produced staggering amounts of corn, wheat, cotton and other crops and will continue to produce that valuable bounty") or shares of Exxon Mobil (which "will probably have delivered trillions of dollars in dividends to its owners," the Oracle of Omaha had one incontrovertible, be all end all reason for eschewing the metal: its unfuckability. Oh sure, you can do things to a cube, you can fondle it, you can talk dirty to it, you can send nude pictures of yourself, you can even drill a hole in it and fuck it senseless, but, the thing is, the cube will not respond. No reciprocation, no gratitude, not even a sign it enjoyed itself. For Buffett, no further argument was necessary as to the worthlessness of the commodity. (Silver, on the other hand, will make you feel like you're 18 again.) Anyway, David Einhorn sort of feels the same way about the dollar. Greenlight Capital 1Q2012 Letter To Investors [PDF] Related: Don't Think He Hasn't Tried
David Einhorn Isn't Gonna Mince Words Here: 2015 Could've Gone Better
In fact, it's difficult to impossible to imagine it having gone worse.