(GuruFocus, July 8, 2008) As it turns out, it’s a Canadian firm Salida Capital and its Chief Executive Officer, Courtenay Wolfe won with a $1.68 million bid. At least our neighbor in the north still got the money and the heart for charity.
Once again it is a hedge fund manager who won the auctions. Salida Capital manages about $300 million. Forget about Fed Chairman, forget about President Obama, the S&P 500 CEO’s, and US consumers; they either did not register with Ebay, or did not bid, or were outbid. For now, it is just hedge funds.
But what exactly a hedge fund firm Salida is? Not much detail is available, but from this Bloomberg piece, we know the firm was founded in 2001, currently manages three funds. Salida multi strategy hedge fund returned 83 percent in the first half of this year after falling by about two-thirds in 2008. Three other funds managed by Salida are being liquidated after being “affected by market dislocation as a result of exposure” to bankrupt Lehman Brothers Holdings Inc., according to the firm’s Web site.
Sometimes, actually most of the times, people use the term “hedge” to mean “speculative”. By definition, John Hussman’s Hussman Strategic Growth Fund is a hedge fund. Even in unprecedented times of the past two years, when you are down two-thirds in one year and up 80% in the next, you are speculating, not investing, let alone hedging. If the regulator wants to regulate hedge funds, I would suggest they forbid the use of term “hedge” unless the fund really qualifies.
I hope bidding for and winning the auction is a true change of heart of the firm’s fund managers. But from the limited the information given in Bloomberg article, I am afraid that is hardly the case. Despite the fact that the managers believe the hefty price for the lunch is an investment in our future, the firm are very bullish on commodities. Betting on one stock, one sector, especially on a sector like commodity, is not even investing, definitely not value investing, the kind of investment Warren Buffett practices.
In deed, Warren Buffett did say that “I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price,” in his yearly letter to shareholder, that does not stop him from admitting buying ConocoPhillips (COP, Financial) and selling some of his stake in the first quarter. Warren Buffett has a much more diversified porfolio in his investment.
I am not saying Salida does not deserve to win. Their money is as good as anybody else’s when it comes to benefiting the charity organization Glide Foundation. All I am trying to say is that it will be a lot of arm twisting before Salida converts to Warren Buffett’s investment philosophy.
The lunch is delicious, but the learning may be painful.
Once again it is a hedge fund manager who won the auctions. Salida Capital manages about $300 million. Forget about Fed Chairman, forget about President Obama, the S&P 500 CEO’s, and US consumers; they either did not register with Ebay, or did not bid, or were outbid. For now, it is just hedge funds.
But what exactly a hedge fund firm Salida is? Not much detail is available, but from this Bloomberg piece, we know the firm was founded in 2001, currently manages three funds. Salida multi strategy hedge fund returned 83 percent in the first half of this year after falling by about two-thirds in 2008. Three other funds managed by Salida are being liquidated after being “affected by market dislocation as a result of exposure” to bankrupt Lehman Brothers Holdings Inc., according to the firm’s Web site.
Sometimes, actually most of the times, people use the term “hedge” to mean “speculative”. By definition, John Hussman’s Hussman Strategic Growth Fund is a hedge fund. Even in unprecedented times of the past two years, when you are down two-thirds in one year and up 80% in the next, you are speculating, not investing, let alone hedging. If the regulator wants to regulate hedge funds, I would suggest they forbid the use of term “hedge” unless the fund really qualifies.
I hope bidding for and winning the auction is a true change of heart of the firm’s fund managers. But from the limited the information given in Bloomberg article, I am afraid that is hardly the case. Despite the fact that the managers believe the hefty price for the lunch is an investment in our future, the firm are very bullish on commodities. Betting on one stock, one sector, especially on a sector like commodity, is not even investing, definitely not value investing, the kind of investment Warren Buffett practices.
In deed, Warren Buffett did say that “I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price,” in his yearly letter to shareholder, that does not stop him from admitting buying ConocoPhillips (COP, Financial) and selling some of his stake in the first quarter. Warren Buffett has a much more diversified porfolio in his investment.
I am not saying Salida does not deserve to win. Their money is as good as anybody else’s when it comes to benefiting the charity organization Glide Foundation. All I am trying to say is that it will be a lot of arm twisting before Salida converts to Warren Buffett’s investment philosophy.
The lunch is delicious, but the learning may be painful.
