There is an article in yesterday’s WSJ entitled “Picks and Pans From Market Pros”, featuring four investment managers: George Soros, John Paulson, Alan Fournier, and James Melcher. Here are the main points made about each one of them:
George Soros:
John Paulson:
Alan Fournier:
James Melcher:
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George Soros:
1.Soros’s fund returned 32% for 2007, 8% in 2008, and 17% so far in 2009.
2.Calls the current market a “trading market”, he thinks investors should take profits when shares surge, even if they look promising long term.
3.Soros is not exactly saying he is bearish, but he doesn’t “see how we can have the kind of growth in profts that we had during the superbubble”.
4.He is bullish with China, Brazil, and India. He likes China because it is a beneficiary of the collapse of financial system and China is stimulating its economy and acts as an economic motor.
John Paulson:
1.Made $17 billion in 2007 and 2008 by betting against subprime mortgages and financial shares.
2.Cash reached $19 billion for his $30 billion fund at the beginning of 2009.
3.The firm concluded that beaten-down prices assumed a rash of defaults that were unlikely to materialize and shifted their focus on the credit markets form one which had a short bias starting in 2006 to one that is aggressively long.
4.Paulson is buying shares of financial companies like Capital One Financial Corp., J.P. Morgan Chase & Co., and commercial real estate broker CB Richard Ellis Group, and oil produce Petro-Canada.
5.Paulson is buying very selectively as he fears lower growth ahead as consumers struggle and he is concerned with a surge of inflation.
6.More than 10% is in gold.
Alan Fournier:
1.Fournier used to work for David Tepper and was among the first investors to turn gloomy on housing.
2.Fournier’s hedge fund Pennant Capital is up about 9% this year.
3.Bullish to health care, especially WellPoint(WLP, Financial). Thinking the impact on WLP’s earning from President Obama’s health-care plan will not be as much as peopled feared
James Melcher:
1.James Melcher manages Balestra Capital, managing a little under $1billion.
2.Fund returned 199% in 2007, 46% in 2008, ad 7% so far in 2009.
3.Fund owns top-rated corporate bonds with yields of about 6.5%.
4.Melcher is increasingly concerned that stock market is beginning to look expensive again. “The economy is still deteriorating, job losses are still huge”, Melcher does not see where the earning will come to drive valuations.
5.Melcher has been buying Credit Default Swaps against debt of countries like Latvia, Bulgaria, Romania, Sweden, Ireland, and Greece.
Click to read the complete article
