Friday, July 19, 2013

The Reformed Broker's 'Delivering Alpha 2013' Notes (the modest Carl Icahn and a cast of thousands)

This is a pretty impressive undertaking.
From the Reformed Broker:

Notes from Delivering Alpha 2013, Part I
...Next panel - The Global Stage (finding opportunities in a deleveraging world) moderated by Michelle Caruso-Cabrera
• Mary Callahan Erdoes, Chief Executive Officer, J.P. Morgan Asset Management
• David McCormick, Co-President, Bridgewater Associates
• Jane Mendillo, President and Chief Executive Officer, Harvard Management Company
• Richard Perry, Chief Executive Officer, Perry Capital
Mary from JPM is billed as having $2.2 trillion under management five minutes after Jack Lew announces that Too Big To Fail is over. LOL. She says diversification will always matter.

Jane from Harvard: Reaction in the markets to Bernanke's taper talk were "ridiculous" - getting off crutches and beginning to walk is good news, not bad news.

David from Bridgewater: Fed has been innovative, filled gaps, has described the conditions under which bond buying policy will change.
Europe:

Richard Perry: Markets have overreacted to Bernanke this summer. US took the corrective medicine faster than Europe has and so we're further along. Makes sense that their markets are lagging. He is buying European debt now, thinks things are changing in the peripheral countries. Still holding the newly issued Greek sovereign bonds, encouraged that German officials are working with them and thinks Greeks have taken the right steps. Germany will make sure Greece stays, elections in Germany will solidify that.
JP Mary: Bullish on Euro recovery, money is being made in Euro stocks long and short, bonds, credit etc. Be opportunistic....MUCH MORE
Notes from Delivering Alpha, Part II
...Panel - The Great Rotation (investing during rising rates) moderated by Becky Quick
• Gregory J. Fleming, President, Morgan Stanley Investment Management
• Joshua S. Friedman, Co-founder, Co-chairman and Co-Chief Executive Officer, Canyon Partners
• Michael Hintze, Founder & Chief Executive Officer, CQS
• Andrew J.M. Spokes, Managing Partner, Farallon Capital Management
Greg Fleming of MS - overseas 4 million accounts, $1.9 trillion in AUM. No big deal. "Financial advisors are looking at a very complicated picture." Asset allocation is still the key for most investors. Clients' allocations to stocks is now back above 50%. At the lows it was 40%. "Not a huge rotation but definitely an acceleration into stocks."

Andrew JM Spokes of Farallon - Amazing british boarding school accent. "Flows are following performance." Risk versus rewards in ten-year bonds is not good.

Michael Hintz of CQS - Fed will keep buying bonds, they are "not the Titanic". But the ten-year should be trading at 4% when things normalize (they won't). Equities are the better bet.

Josh Friedman of Canyon Partners - "the world is littered with interest rate forecasts, they're all wrong."  Re: Rotation, "actions speak louder than words."  He's also not interested in bonds. He has been investing in bank debt and mortgage-related securities. But these are specific investments that involve research, not whole categories. One rotation now he's seeing is out of high yield bonds and into bank loans....MORE
And: 
...Icahn on Chanos's track record (they disagree on Dell's future): "Look at some of the stocks Chanos has shorted. They've gone up. I think I have a much better record than Chanos in all modesty." ...
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