Rising hedge fund stars crushing former stars Einhorn, Ackman

L

learner88

Mr Einhorn and Mr Ackman have already made their billions. Losing now has little personal financial impact. Impact is more on the ego today.

https://www.cnbc.com/2018/01/18/rising-hedge-fund-stars-are-crushing-the-market.html

Einhorn's Greenlight Capital fund returned a meager 1.6 percent in 2017, according to an investor letter. And Ackman's Pershing Square declined 4 percent last year, according to its website.


Part of the reason may be the rise of computerized trading. The quantitative-oriented funds could be taking the low-hanging, numbers-based valuation opportunities away.

Einhorn tried to explain that his fund's current underperformance was due to a temporary phase in the stock market.


"Despite it being a good year in the market, it was a challenging environment for our investment style," he wrote in a note to clients Tuesday. "We have a value orientation and we take comfort from the margin of safety afforded by the low valuations of our long investments … while we certainly don't believe value investing is dead, it is clearly out of favor at the moment."
 
learner88 said:
Mr Einhorn and Mr Ackman have already made their billions. Losing now has little personal financial impact. Impact is more on the ego today.

https://www.cnbc.com/2018/01/18/rising-hedge-fund-stars-are-crushing-the-market.html

Einhorn's Greenlight Capital fund returned a meager 1.6 percent in 2017, according to an investor letter. And Ackman's Pershing Square declined 4 percent last year, according to its website.


Part of the reason may be the rise of computerized trading. The quantitative-oriented funds could be taking the low-hanging, numbers-based valuation opportunities away.

Einhorn tried to explain that his fund's current underperformance was due to a temporary phase in the stock market.


"Despite it being a good year in the market, it was a challenging environment for our investment style," he wrote in a note to clients Tuesday. "We have a value orientation and we take comfort from the margin of safety afforded by the low valuations of our long investments … while we certainly don't believe value investing is dead, it is clearly out of favor at the moment."
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In other words, their method for valuing is outdated. These are the type of managers that will never own Amazon stock because it will always be trading at a premium to it's intrinsic value due to the market having better information.
 
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How does one quantify all the advantages Amazon has over the competition and the intangible skill of Bezos? These managers think looking at financial reports and calculating the net present value of future cash flows tells the full story.

This market is about being able to look into the future, not use 1920 methods to calculate the value of a company.
 
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lovethetrade said:
How does one quantify all the advantages Amazon has over the competition and the intangible skill of Bezos? These managers think looking at financial reports and calculating the net present value of future cash flows tells the full story.

This market is about being able to look into the future, not use 1920 methods to calculate the value of a company.
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Same statements were made in 1999.
 
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lovethetrade said:
Is the current market similar to 1999?
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To me the similarity begins even earlier. The 1997-1998 Asian financial crisis and Russian default witnessed a big shift of investment out of the traditional economy and into tech. In the last few years we've had a retreat from commodities and currencies of commodity producing nations and a surge into tech. The similarity is uncanny.
 
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