Youthful Infatuation at its Worst?
Businessweek’s title reads, “He’s 28, and Here to Take Over Your Company.”
The story is like a love tribute to Ryan Morris who was lucky enough to start investing a whopping $50,000 via newly created Meson Capital Partners on Feb. 24, 2009. That was just days before the ultimate bottom/turning point that took place on March 9, 2009.
Mr. Ryan, then 24 years old, made some seriously risky bets that paid off big simply because low quality assets were being dumped as potential bankruptcy candidates. Dart-throwing monkeys willing to buy at that moment in time would have been anointed as great stock pickers.
Lower-quality, highly-leveraged companies were being thrown out like garbage. There were dozens of issues that rebounded by five, ten- and twenty-fold from their super-depressed March 2009 quotes.
Mr. Morris made some high-risk bets that paid off. Karen Weise, the article’s author, described in detail his spectacular 2009 returns as the overall market rebounded.
After that impressive run up, Mr. Morris was labeled a certified financial genius. He was then able to attract some serious money to manage. Whitney Tilson, founder of T2 Partners, and Zeke Ashton of Centaur Capital Partners put up some seed money.
In entirely predictable fashion Meson Capital Partners' performance peaked in March 2010 just as it was attracting large cash inflows. The article showed a nice chart comparing their returns with those of the S&P 500.
I’ve highlighted the period from March 2010 through September 2012. The results have been dreadful during a period when the S&P 500 has done quite well.
In trying to verify the actual numbers I went directly to Meson’s own website. It provides contact information only. Unless you are a current client you cannot see their actual performance. I’ve included a comment from an on-line reader who seemed to have the raw numbers handy.
I cannot vouch for their accuracy but they appear to correspond with the article’s chart. If the 2010 to September 2012 numbers are real, Meson Capital Partners would have turned $1 into just $0.6385 over a 21-month period.
From the March 2010 peak it looks much worse. NAV topped out around $6 and, by the end of Q3 2012 had plunged by well more than 50%.
I wonder if any of Meson Capital’s post-2009 investors find the graph’s title amusing.
Perhaps author Karen Weise has a crush on Mr. Morris. Why else would she be praising him in the pages of Bloomberg Businessweek now?
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