Gold traders are getting more bullish after billionaire hedge-fund manager John Paulson told investors it’s time to buy the metal as protection against inflation caused by government spending. Twelve of 22 surveyed by Bloomberg expect prices to gain next week and five were neutral. Paulson & Co. is already the biggest investor in the Gold Trust, the largest exchange- traded product backed by bullion, with a stake valued at $2.9 billion, a Securities and Exchange Commission filing Feb. 14 showed. Investors have 2,389.7 metric tons in ETPs, within 0.2 percent of the record reached in December and more than all but four central banks, according to data compiled by Bloomberg.
Paulson’s Math Seen Failing as Hartford Mulls Breakup (Bloomberg)
Even if John Paulson persuades Hartford Financial Services Group Inc. (HIG) to break itself up, the hedge fund manager could still come up short in his billion- dollar bet on the 201-year-old insurer. Hartford’s biggest shareholder said this week he may seek support from investors for a plan to split the property-casualty and life-insurance businesses, pushing the stock to a six-month high yesterday. Hartford, which sells for less relative to net assets than comparable U.S. insurers, according to data compiled by Bloomberg, could be worth $32 a share by separating the units, he said. That’s 50 percent more than its current price.
Rogers Favors Euros and Avoids Pounds, U.S. Stocks (Bloomberg)
Billionaire investor Jim Rogers said he doesn’t have U.S. stocks or the British pound in his portfolio, which includes euros, dollars, renminbi and precious metals such as gold and silver. “Everybody’s having a wonderful time running the printing presses,” Rogers, chairman of Rogers Holdings, said in a television interview with CNBC in Singapore today. “The way to protect yourself at a time like that, historically anyway, has been to own real assets. Those are my longs, and currencies.”
US Housing Among Most Attractive Assets: Marc Faber (CNBC)
The housing market in the south of the United States is among the most attractive asset classes in the world, Marc Faber, the editor of the Gloom Boom & Doom Report, told CNBC on Friday, because while homebuilder stocks had rallied, property prices hadn’t moved much. “If you look at the supply of homes, new construction, and you compare it to immigration into the United States, to the growth of the population, then these (southern) markets are very attractive from a longer term perspective,” Faber told Bernie Lo on CNBC’s Straight Talk.
Falcone Airwaves Left With Dwindling Value (Bloomberg)
Philip Falcone may have to seek a buyer for LightSquared Inc.’s airwaves after regulators rejected his business plan. If he has to sell, the proceeds will probably be a fraction of what the billionaire invested. The U.S. Federal Communications Commission said Feb. 14 it won’t let LightSquared begin service because it interferes with GPS navigation of cars, boats, planes and tractors. Falcone’s Harbinger Capital Partners hedge fund has invested $3 billion in the wireless venture.
Warren Buffett’s Berkshire Hathaway Gets Weekly Options (CNBC)
Warren Buffett’s Berkshire Hathaway joins the growing list of companies that investors can play in the expanding market for short term options. These short term, or “weekly” options, cover just as they say, one week’s worth of volatility. They have become highly popular as investors hunt for an easy, cheap way to play volatility spikes.
Small Hedge Funds Draw Investments (Bloomberg)
Richard Maraviglia spent January flying to Zurich, New York, Chicago and Miami to raise $250 million for his hedge fund. Maraviglia, who now oversees about $610 million for Carlson Capital LP from London, raised the money because the almost 40 percent gain he posted last year made him a rarity: a hedge-fund manager who made money trading stocks. Hedge funds were down an average 5 percent in 2011 and those focused on equities fared even worse, losing 8.3 percent, Hedge Fund Research Inc. says.
2012 Market Expectations: Hedge Fund Allocations (Bloomberg)
Bloomberg’s Courtney Donohoe reports on investing in Hedge Funds. She speaks on Bloomberg Television’s “Money Moves.”
Citigroup Managers to Own Part of Hedge Unit (Bloomberg)
Citigroup Inc. (C), the third-biggest U.S. bank by assets, will let managers of its hedge funds own part of the business ahead of rules that limit shareholders’ cash in the unit, Chief Operating Officer John Havens said. Employees in the Citi Capital Advisors division, or CCA, will get a “significant” stake in managing the funds, Havens said in an interview. This will increase, he said, as New York- based Citigroup withdraws its own money and attracts outside investors to comply with the Volcker rule, which restricts deposit-taking banks from making bets with their own capital.
Hedge Funds Faulted For Not Being Short-Term Enough (Reuters)
Used to criticism for caring only about short-term profit, hedge funds are now being faulted for a failure to think short-term enough after losing out badly in last year’s volatile markets. A series of bad bets by hedge funds which were not able to keep up with markets roiled by the euro zone debt crisis pushed the industry as a whole down 5.2 percent last year, according to Hedge Fund Research.
Hedge Fund Pioneer Back For Asia Venture (Financial Times)
William Bollinger, one of the pioneers of London’s hedge fund industry, has come out of retirement to launch a new venture – in Singapore. A protégé of the renowned investor Julian Robertson and a former donor to the Labour party, Mr Bollinger set up Egerton Capital, one of the UK’s first – and now most successful – hedge funds, with John Armitage in 1994. However, amid a tougher regulatory environment in Europe, higher taxes in the UK and a stale marketplace, Mr Bollinger has chosen to launch his new fund, Judico Capital, in Asia.
Analyst Kinnucan Arrested In US Insider Trading Probe-FBI (Reuters)
An independent research analyst has been arrested in the U.S. government’s broad-based insider trading probe, an FBI spokesman said. John Kinnucan, a principal at Broadband Research, was arrested without incident on Thursday at 4:30 p.m. PST at his home in Portland, Oregon, the spokesman, Jim Margolin said.
New Bill Clouds Legality of Tips (WSJ)
The political-intelligence industry thought it scored a great success last week when Republicans yanked a provision from a bill that would have forced firms to register their activities. Now it is confronting the possibility that the legislation—more broadly aimed at banning insider-trading in Congress—could put the entire industry in jeopardy.
Former Eminence Principal Michael Beerman Plans New Equity Fund (AR)
Eminence Capital founding member Michael Beerman is planning the launch of Wing Lake Capital in May, according to people familiar with the situation. New York-based Wing Lake will employ a long/short equity strategy, with a primary focus on small- and mid-cap U.S. companies in the consumer, business services, financial, technology
5 Stocks Bruce Berkowitz Is Bullish On (Market Watch)
Fairholme Fund is performing spectacularly this year, returning 17.5% in a month and a half. This follows a less-than-stellar 2011 which saw the fund lose a little more than 32% on poor performance by stocks like St. Joe, among others. The fund had $580 million invested in Bank of America BAC at the end of December, and the stock’s 40% return has contributed significantly to Fairholme’s strong performance over the last several weeks. Let’s take a look at the stocks Berkowitz is currently most bullish about:
Martin Currie China Managers Ready First Hedge Fund (FINalternatives)
Two Martin Currie Investment Management veterans are set to launch their China-focused hedge fund next month.
Kinnucan Arrested, Refused To Wear A Wire In Insider Case (FINalternatives)
Kinnucan was arrested yesterday afternoon at his home in Portland, Ore. The charges against him are currently sealed, although prosecutors have linked him to three people charged in the insider-trading case surrounding expert network Primary Global Research. The government has said it has wiretaps of conversations between Kinnucan and former SAC Capital Advisors trader Donald Longueuil and Level Global Investors co-founder Anthony Chiasson. In addition, Walter Shimoon, a former consultant for both Primary Global and Kinnucan’s Broadband Research, told a judge that he had given Kinnucan material, non-public information.
Investors Eye Increased Hedge Fund And CTA Allocations, Survey Reveals (HFM Week)
More than half of investors who currently have money in both hedge funds and CTAs expect to increase their allocations to those respective investments going forward this year, a survey by AlphaMetrix has revealed. The study, which collected data from over 200 investors and managers at the recent AlphaMetrix 2012 Miami Summit, noted that 65% anticipate boosting their existing allocations to those private investments, with 25% of the participants expecting to raise their exposure significantly.
EXCLUSIVE: Open Door Capital Group Hedge Fund Set For March Launch (HFM Week)
Open Door Capital Group, a $400m Shanghai and San Francisco-based asset manager, plans to launch its first hedge fund next month, HFMWeek has learned. The offering, China Absolute Return Fund, a long-hedged strategy focused on the country, is likely to roll out with $75m of internal capital and commitments from investors in the team’s earlier products.
Value Investing: Buying at 52 Week High (Value Walk)
Warren Buffett looks at the company first and then compares it to the price, something most investors (including myself) rarely do. If it’s a great company and its stock price is significantly below intrinsic value, he buys. He doesn’t look at the stock chart, he doesn’t go by technical analysis he just makes his decision regardless of past price movements.
T. Boone Pickens Continues to Tout Natural Gas (Value Walk)
Energy billionaire, T. Boone Pickens has been campaigning natural gas for years now. Pickens believes the only way to energy independence is through natural gas that is here at home. He argues that it would cut our addiction to costly, foreign oil and bring more jobs to the United States. This time, Pickens is campaigning for companies such as Clean Energy Fuels (CLNE), Navistar (NAV) or Westport Innovations (WPT) to build engines that could run on natural gas for big trucks.
Whitney Tilson ‘Cautiously’ Optimistic About Economy (Value Walk)
News over the past few months has been surprisingly good, says Whitney Tilson, hedge fund manager. “We’re cautiously optimistic that things are going to get better,” he adds.
What’s Behind David Tepper’s Latest Enigmatic Moves (Institutional Investor)
To the uninitiated, David Tepper might seem to have turned super bearish on the stock market last year. For one thing, the founder of Appaloosa Management gave back more than $2 billion to investors, according to sources. As a result, he entered the year with $11.75 billion, down from $15 billion a year earlier. In addition, according to 13F filings, Appaloosa drastically pared its equity portfolio from more than $4 billion at the end of the second quarter to $1.5 billion in September to a measly $765,000 by year-end.
Hedge Funds Standards Strengthened To Reflect Globalisation Of Industry And Address Concerns (Hedge Funds Review)
Significant changes have been made to the HFSB standards, improving corporate governance, risk management, transparency and valuation procedures and guarding against market abuse.
Starboard Prepping For AOL Seats (NY Post)
Activist hedge fund Starboard Value, which upped its stake yesterday in AOL to 5.1 percent, is quietly preparing to launch a battle for board seats as early as next week, The Post has learned. The $1 billion hedge fund, run by former Ramius money-manager Jeffrey Smith, is gearing up to nominate its own slate of directors after calling on AOL in December to overhaul its money-losing media strategy, sources said.
George Soros, Aretha Franklin, Sleigh Bells, Hoffman’s Loman: NYC Weekend (Bloomberg)
People Moves (Hedge Funds Review)
Market News: Housing Starts Soar (Value Walk)
Frontrunning: February 17 (Zero Hedge)
Daily US Opening News And Market Re-Cap: February 17 (Zero Hedge)
10 Friday AM Reads (The Big Picture)
Hot Links: Goodbye Gary (The Reformed Broker)
Morning Read: No Dow 13,000 Hats, Transports Cautious (Barrons)
Further reading (FT Alphaville)
Friday 7atSeven: wait and see mode (Abnormal Returns)
HFMWeek Daily Snapshot – 17 February (HFM Week)
The AM Roundup: Internet Tracking, Insider Trading, More (WSJ)
Hedge Funds – Quitting While They’re Behind, Accountants Killed MF Global, Lehman 2.0 And More (Reuters Hedge World)
Hedge Funds Up In January, Obama Fundraiser Targets Hedge Funders, Morgan Stanley To Raise HF Money And More (Reuters Hedge World)
