March 31, 2012

Icahn and Alexander

We’ve seen some Charlie Sheen jokes about this  interview with Carl Icahn, but we really like the new Carl “I have no investors”  Icahn. Take for example his candid response to why he is continuing to invest: “I like winning. There’s also a certain joy in it. I feel fulfilled by it.” The final comment in this interview, and one that came completely unprompted, also really struck us:

You know who I can relate to? I’m nothing like Alexander the Great and I don’t want it to be misconstrued that way, but I was reading his biography and I can relate to one aspect about the guy. He could have stayed in Persia and had a nice life. Instead, he went off and fought a new fight. That’s how I can relate. I don’t like just sitting there. I enjoy the hunt much more than the “good life” after the victory.

 

Icahn seems to be demonstrating a quality that appears in most of the very best investors we have encountered. He invests because he loves the game and loves “winning”. The money and the rewards seem to be secondary to him.

We’ve seen some Charlie Sheen jokes about this  interview with Carl Icahn, but we really like the new Carl “I have no investors”  Icahn. Take for example his candid response to why he is continuing to invest: “I like winning. There’s also a certain joy in it. I feel fulfilled by it.” The final comment in this interview, and one that came completely unprompted, also really struck us:

You know who I can relate to? I’m nothing like Alexander the Great and I don’t want it to be misconstrued that way, but I was reading his biography and I can relate to one aspect about the guy. He could have stayed in Persia and had a nice life. Instead, he went off and fought a new fight. That’s how I can relate. I don’t like just sitting there. I enjoy the hunt much more than the “good life” after the victory.

 

Icahn seems to be demonstrating a quality that appears in most of the very best investors we have encountered. He invests because he loves the game and loves “winning”. The money and the rewards seem to be secondary to him.

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2012 Ira Sohn Contest March 21, 2012

The 2012 Ira Sohn Contest has begun. Last year, Sunjay Gorawara won the contest with his pitch of Bridgepoint Education. After  a 15% pop after his presentation, the stock has been up slightly (8%) in the intervening months.

Like last year, Michael Price, Bill Ackman, David Einhorn, Joel Greenblatt and Seth Klarman will be judging the submissions and will decide on a winner to present at the Ira Sohn Conference on May 16th.

The 2012 Ira Sohn Contest has begun. Last year, Sunjay Gorawara won the contest with his pitch of Bridgepoint Education. After  a 15% pop after his presentation, the stock has been up slightly (8%) in the intervening months.

Like last year, Michael Price, Bill Ackman, David Einhorn, Joel Greenblatt and Seth Klarman will be judging the submissions and will decide on a winner to present at the Ira Sohn Conference on May 16th.

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Undercover Billionaire: Sara Blakely, Founder of Spanx March 8, 2012

We have a soft spot for successful entrepreneur stories, and this is a particularly good one. Well worth a read.

We have a soft spot for successful entrepreneur stories, and this is a particularly good one. Well worth a read.

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The Warren Buffett of…. March 4, 2012

Our  article on Paul Desmarais called him “The Warren Buffett of Canada,” which made us start wondering how many “Warren Buffett ofs” there are. We decided to do a deep Google search to try and put together a comprehensive list. We had to toss out a huge number of non-investors like the Warren Buffetts “of  groceries”, “of business communication”, “of real estate” and, bizarrely,  even a Warren Buffett “of cuddling.” We wanted to learn who was considered such a good investor in their home country or geography that the “Warren Buffett of” moniker was used.  In total, we found 26 Warren Buffett ofs.” Some of the names we had heard of before, but there were a number of new ones too:

 

Our  article on Paul Desmarais called him “The Warren Buffett of Canada,” which made us start wondering how many “Warren Buffett ofs” there are. We decided to do a deep Google search to try and put together a comprehensive list. We had to toss out a huge number of non-investors like the Warren Buffetts “of  groceries”, “of business communication”, “of real estate” and, bizarrely,  even a Warren Buffett “of cuddling.” We wanted to learn who was considered such a good investor in their home country or geography that the “Warren Buffett of” moniker was used.  In total, we found 26 Warren Buffett ofs.” Some of the names we had heard of before, but there were a number of new ones too:

 

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Dan Zwirn, the Man Who Fell to Earth March 2, 2012

This is a very interesting article on the fall of D.B Zwirn. While it is a very one-sided account, there are some important lessons to be gleaned from the article for investors in hedge funds. Most important: operational due diligence is critical for funds that are growing rapidly, and investing skill does not necessarily translate into management skill.

This is a very interesting article on the fall of D.B Zwirn. While it is a very one-sided account, there are some important lessons to be gleaned from the article for investors in hedge funds. Most important: operational due diligence is critical for funds that are growing rapidly, and investing skill does not necessarily translate into management skill.

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Interview With Prem Watsa February 11, 2012

Fairfax Financial released this interview with Prem Watsa. It includes a nice summary of Watsa’s career and the founding of Fairfax, as well as some of his bearish macroeconomic thoughts.

Fairfax Financial released this interview with Prem Watsa. It includes a nice summary of Watsa’s career and the founding of Fairfax, as well as some of his bearish macroeconomic thoughts.

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FPA Crescent Fund Annual Letter February 8, 2012

This is an excellent and thoughtful letter from FPA.

This is an excellent and thoughtful letter from FPA.

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An Interview With Sam Zell January 28, 2012

In this interview, Sam Zell provides his current thinking on the outlook for the US economy, his expectations for supply and demand of commercial real estate, and why he thinks there could be some turmoil in 2012.

In this interview, Sam Zell provides his current thinking on the outlook for the US economy, his expectations for supply and demand of commercial real estate, and why he thinks there could be some turmoil in 2012.

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Text Of George Soros’ Speech at Davos January 28, 2012

Highly insightful speech from George Soros detailing the European situation. A preview:

“Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.”

Highly insightful speech from George Soros detailing the European situation. A preview:

“Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.”

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Who is Paul Desmarais? January 26, 2012

A friend sent us this article from 2009, which compared Paul Desmarais to Warren Buffett. Much as Adam Smith said about Warren Buffett in his 1972 book Supermoney, when we saw the article we asked ourselves: “Who is Paul Desmarais?” We’re always interested in learning about successful investors, especially those that keep a low profile, so this article was immediately of interest despite being a few years old.

Paul Desmarais  controls The Power Corporation of Canada and  is 235th on the Forbes list of billionaires. Desmarais has also partnered with Albert Frere on a number of deals.  Frere is a name we know and someone often given the coveted “Warren Buffett of X” moniker. In this case, the Warren Buffett of Belgium. Unfortunately the article didn’t shed a whole lot of light on how Desmarais invests but there were a few tidbits:

  • “Before making an acquisition, the Desmarais examine how an industry will evolve over 10 or 15 years.”
  • “Desmarais’s political connections have long spurred speculation he’s swayed government policy in his companies’ favor.”
  • “He was a transaction junkie at that time (1967).”
  • “Paul was attracted by the simplicity, or the cleanliness, of the balance sheet of an insurance company,” Mulroney says. “It provided good, solid cash flow.”
  • “Desmarais was an avid reader of financial statements. ‘You could mention almost any company of any note in North America, and he’d know about it because he’d read the balance sheet.’”
  • “Desmarais also traveled to China, convinced that opportunity lay in that country’s shifting relations with the West.”
  • “One of Paul Desmarais’s great talents was his insight into where the great developments were going to take place in the world,” Martin says. He also acted out of necessity. Desmarais’s home market, now 33 million people, was too cramped for a man of his ambition. “Canadians can’t build world-class businesses without looking outward,” Martin says.
  • “I was struck by his integrity and reliability and his strategic sense of the business deal,” says Frere.

A friend sent us this article from 2009, which compared Paul Desmarais to Warren Buffett. Much as Adam Smith said about Warren Buffett in his 1972 book Supermoney, when we saw the article we asked ourselves: “Who is Paul Desmarais?” We’re always interested in learning about successful investors, especially those that keep a low profile, so this article was immediately of interest despite being a few years old.

Paul Desmarais  controls The Power Corporation of Canada and  is 235th on the Forbes list of billionaires. Desmarais has also partnered with Albert Frere on a number of deals.  Frere is a name we know and someone often given the coveted “Warren Buffett of X” moniker. In this case, the Warren Buffett of Belgium. Unfortunately the article didn’t shed a whole lot of light on how Desmarais invests but there were a few tidbits:

  • “Before making an acquisition, the Desmarais examine how an industry will evolve over 10 or 15 years.”
  • “Desmarais’s political connections have long spurred speculation he’s swayed government policy in his companies’ favor.”
  • “He was a transaction junkie at that time (1967).”
  • “Paul was attracted by the simplicity, or the cleanliness, of the balance sheet of an insurance company,” Mulroney says. “It provided good, solid cash flow.”
  • “Desmarais was an avid reader of financial statements. ‘You could mention almost any company of any note in North America, and he’d know about it because he’d read the balance sheet.’”
  • “Desmarais also traveled to China, convinced that opportunity lay in that country’s shifting relations with the West.”
  • “One of Paul Desmarais’s great talents was his insight into where the great developments were going to take place in the world,” Martin says. He also acted out of necessity. Desmarais’s home market, now 33 million people, was too cramped for a man of his ambition. “Canadians can’t build world-class businesses without looking outward,” Martin says.
  • “I was struck by his integrity and reliability and his strategic sense of the business deal,” says Frere.
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