Opening Bell: 3.10.17

Hedge funds descend on Mar a Lago; Warren Buffett gets schooled; the CIA has a dank meme division; and more.
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A Brand Name for a Hedge Fund Happy Hour: Trump’s Mar-a-Lago (NYT)
President Trump’s members-only club, which has been called the winter White House, is the location of a “meet and greet” hedge fund event organized by the Palm Beach Hedge Fund Association. David S. Goodboy, the association’s founder and the event organizer, is hoping that Mr. Trump will stop by. “He is invited. Whether he comes or not is in the air,” Mr. Goodboy said. “I hope so,” he added. “It would be great P.R. for us.”

The $2.5 trillion investor behind a statue of a girl on Wall Street is tackling its own gender problem (BI)
State Street, like many money management firms, has a gender problem of its own. And while it has a better record than many, both in its industry and across corporate America, it recognizes it needs to do more. Women make up only one in five employees at the company's investment unit, for instance. Only three of the firm's 11 board members are women.

Wall Street’s Volatility Pioneer Searches for Latest Fear Trade (WSJ)
When describing ambiguity, Mr. Brenner borrows a line from Donald Rumsfeld, the former Defense Secretary: Volatility measures the “known unknowns,” or the uncertainties about which one can measure probability. Ambiguity reflects the “unknown unknowns,” where the probabilities themselves are a mystery.

Hedge-Fund Trump Bump Turns to Slump (WSJ)
The start of 2017 has proved painful. Kenneth Tropin’s Graham Capital Management, which runs $13 billion in assets, has lost 3.7% in one of its portfolios. Greenwich, Connecticut-based Tudor Investment Corp., founded by Paul Tudor Jones, lost 2% in its Global fund in the first two months of the year. Louis Bacon’s Moore Macro Managers fund was flat this year to mid-February.

Bonfire of Wall St analysts burns some big names (FT)
At the same time that Mike Mayo was losing his job, another analyst covering the banking sector also suffered the same fate. Paul Miller, who worked until Wednesday at FBR Capital Markets, is more pessimistic on the future of the industry: “There’s just not a lot of money in sell-side research for [independent] broker-dealers any more because the bulge brackets give it away and it’s a loss leader for them. I’ve seen this coming and I’ve been preparing.” Mr Miller, 55, plans to take some time off and plot his next move.

[Bonus quote: Mayo went a bit further in a New York Post profile, comparing himself to Cézanne. (“We didn’t know whether to laugh or cry,” says a fellow analyst of that analogy.)]

Does Warren Buffett Not Understand Risk-Adjusted Returns? (Bloomberg)
I’m guessing that rich people are not dumb, and that there are reasons to invest in hedge funds other than just beating the market. First, it's important to realize that when you invest in an index fund, you get not just the return of the index, but the volatility of the index. Professional money management doesn’t necessarily offer better absolute returns, but what it should offer is better risk-adjusted returns.

‘Betting on Zero’ Review: Herbalife Opponents Doc Details A Total No-Win Situation (IndieWire) As the pool of perspectives deepens to include financial industry experts and more impartial journalists, Ackman becomes less of an altruistic figure and someone shown as having the same propensity for self-promotion as those he’s railing against. In saving its perspective twist for Ackman rather than Herbalife itself, Braun makes a sneaky point about the power of primacy and the allure of a squeaky clean image.

A look at the CIA’s internal dank meme division (Ars Technica)
CIA developers used movie and game references for a number of project names, including "Ricky Bobby"—a backdoor for intelligence collection designed to be dropped from a USB stick inserted by a CIA "asset" named for Will Ferrell's role in Talladega Nights. Ricky Bobby sent its data to a listener called "Cal"—named for John C. Reilly's character in that film, Ricky Bobby's teammate and friend. An "implant" for Apple iOS devices (effective on iOS versions 7 through 8.2) is named "DRBOOM," after a character from the card game Hearthstone: Heroes of Warcraft.

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Source: AP

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