Bill Ackman: If You're So Smart, Why Aren't You Rich?

Embedded below is hedge fund activist Bill Ackman's 43 minute presentation that he did a little while back for the Floating University.  Initially students or those interested in the video had to pay to see it, but it was just released into public domain on Youtube in it's entirety   The title is "Everything You Need to Know About Finance and Investing in Under an Hour."  Hmmm...somehow I doubt Ackman covers everything, but he has proven himself to be one of the contemporary greats of the activist/value investment world.  Since you'll learn everything you need to know about finance and investing in under an hour, Ackman speaks in broad strokes, but still an educational way to spend some time gleaning insights from a Pro.

A sockless Bruce Berkowtiz interview at University of Miami

Bruce Berkowitz and Fairholme had a rough year in 2011 -to put it mildly- yet has significantly outperformed so far in 2012.  During 2011, Berkowitz continued to hold concentrated positions in AIG, Sears, and Bank of American which led him to dramatically trail the market.  In 2011, I noticed various talking heads proclaiming the Berkowitz had lost his touch, that he was reckless, and that he was so far under he could not liquidate his positions to meet fund redemptions.  Clearly he had lost his touch. Obviously he started taking stupid pills.  The pundits were right...wait a minute - no they weren't!  Berkowitz remained in his circle of competence, and continued to hold his positions which have produced a 36% return YTD.


Embedded below is a recent interview with Bruce Berkowitz at the University of Miami where he is the "Executive in Residence".  He speaks a bit about his General Growth Properties position, his charitable work at the Fairholme Foundation, and his work with the Secret Millionaires Club which creates cartoon webisodes to promote financial literacy for children.

Howard Marks latest memo: A Fresh Start (Hopefully)

Below is the latest memo from the ever insightful Howard Marks at Oaktree Capital.

A Fresh Start (Hopefully)
by Howard Marks

That link goes to the Oaktree site where the PDF can be downloaded or read.  All of Marks' past memos are posted on that page as well.  Marks is one of the few who imparts pearls of investment wisdom that remain relevant through various market and economic periods.  His memos are all there for free, or you can read the cliff notes version in his excellent book: The Most Important Thing: Uncommon Sense for the Thoughtful Investor.

GMO's Jeremy Grantham: "On the Road to Zero Growth" Q3 2012 Letter

The latest from Jeremy Grantham of GMO, with additional commentary from Ben Inker.


"On the Road to Zero Growth" - Grantham pgs. 1-17

"Help, Help, I'm Being Repressed" - Inker pgs. 18-20

GMO3Q12 Letter

Classic Cocktails: The Last Word

The Last Word is a gin based cocktail that began at the Detroit Athletic Club in the 1920's.  After WWII, however, the Last Word slipped into obscurity in the cocktail universe for reasons unknown.  In the early 2000's, the drink began to make a resurgence starting in the Seattle area, and it's popularity continues to grow.

The Last Word consists of Gin, Green Chartreuse, Maraschino Liqueur, and Lime Juice all in equal parts.  The drink is a nice mix of sweet, sour, and pungent.  It's crisp and complex and is deceptively strong, mostly in part to the Green Chartreuse which weighs in with a 55% alcohol content.  It's a great cocktail that challenges and refreshes the pallet.  Enjoy!

Having the Last Word at the house

The Last Word 
1oz. Gin
1oz. Green Chartreuse
1oz. Maraschino Liqueur
1oz. Fresh squeezed and strained Lime Juice












Here is Robert Hess making the Last Word.

Hugh Hendry and David Einhorn

The video below is a recent one of Hugh Hendry followed by David Einhorn at the Buttonwood gathering in New York City.  The topics discussed are the topics that everyone is discussing ad nauseum, eg., Europe's 'Theatre of the Absurd', questions about China's flailing role as the global engine of growth, The US recession and of course the Federal Reserve.  If all this has been discussed ad nauseam, then why post a lengthy video of it here?

Two reasons:
1.  Hugh Hendry's macro views are well thought out, challenge conventional wisdom, and take into 2nd, 3rd, and 4th level affects.  I think he is on par with Ray Dalio as far as one of the few macro opinions worth considering.  As Howard Marks has correctly stated, it is impossible to predict these global outcomes.  In light of that, it is important to be prepared, and part of doing that is to listen to someone like Hendry as he presents multiple plausible outcomes and the collateral damage associated.

2.  Around the 55 minute mark David Einhorn takes the stage (after Hendry, I skipped straight to the Einhorn section, so I can't vouch for what's in between).  Einhorn doesn't discuss specific securities, but what he does do is give a thorough rebuttal as to why the Fed's ZIRP is not working and will continue to not work.  He feels that by punishing savers, you also punish consumption, which punishes sales, which punishes business growth.  He explains in much more detail.

FYI: Unfortunately, the video host (not Me!) is asking for your email to watch the video.  It didn't do that last night when I watched it on my phone... 

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East Coast Asset Management Q3 Letter - Inventing a Flying Machine

I've thought for some time now that Christopher Begg at East Coast writes one of the more interesting quarterly commentaries.  Begg always finds a unique way to tie a seemingly unrelated idea or concept to investing, underscoring Munger's philosophy of taking from all discipline's to form one's lattice work of mental models. 

Begg writes about East Coast's investment process and their use of checklists to fully understand how they see an investment and why they believe a margin of safety exists.  He also writes about the types of investments that East Coast seeks (Compounders, Transformations, and Work-Outs) and where they look to find their ideas.  East Coast prospects among the usual value suspects: spin-offs, post bankruptcy re-orgs, irrational sellers, political and economic clouds.

Embedded below is the letter in full.

East Coast 3Q 2012 Letter_Inventing a Flying Machine