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If there’s one thing Gabe Plotkin is good at, it’s finding companies that are perhaps not quite as good as their share price suggests and betting against them. It’s why his backers and new investors flocked to him even when the meme-stock mania of one year ago cost them 7 billion of their dollars on those very shorts.

Other hedge-fund managers regard Melvin as especially good at shorting….

“A lot of [portfolio managers] say they do something and they explain a process, and then, when you observe them, they don’t do that,” said Perry Boyle, Mr. Cohen’s longtime deputy, since retired, who had been head of equities at SAC and then at Point72.

Of the hundreds of portfolio managers who worked for Mr. Cohen over the years, he said, “Gabe was the most disciplined and process-oriented PM we had run across.” Mr. Boyle invested in Melvin last year, after the January losses.

It's sure a good thing the Journal got Boyle on the phone when it did, because we imagine he might be a bit less likely to go in on Plotkin’s latest plan.

The new fund will be called Melvin Capital Long Only LP and the filing did not say when fundraising will begin. The fund's name suggests that it will bet stocks will rise not fall and that the portfolio will not be hedged…. "Launching a hedge fund strategy which doesn't (appear to) hedge is puzzling," said Max Gokhman, chief investment officer at hedge fund Alpha TrAI. Markets will likely be turbulent which will "require nimbleness to tactically go long and short, not just to maximize alpha but to minimize risk as well…."

Now investors worry Plotkin's new fund might signal that he has lost the nerve to short, the very thing that allows hedge funds to promise clients a way to ride out tumbling markets.

Melvin Capital's Plotkin eyes new cash after year of double-digit losses [Reuters]
Hedge Fund Melvin Lost $6.8 Billion in a Month. Winning It Back Is Taking a Lot Longer. [WSJ]

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