Two horrendous calls by financiers on the music industry

Quote from Debaser82:

Hugh Hendry is way overrated. I don't know where he gets his reputation from other than his loud mouth.
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I got curious, so:

"Hendry avoided risky areas in the run-up to the financial crisis, a strategy that was controversial with some clients at the time. But as a result the worst ever year for his flagship Eclectica fund was a 3% drop while it returned more than 50% in its best year. It has generated an average return of 11% since its launch 4 years ago."

http://www.heraldscotland.com/busin...offshore-to-avoid-brussels-penalties-1.993348
 
The initial post said Hendry sold out of his investment. Did he sell at a profit? If the answer is yes, why did he make a horrendous call? Is there a problem with making a profit.

As to the rest of your theory, pretty much every response on this thread blows up your points. At the right price, pretty much any business can be a good investment.

Berkshire Hathaway was a textile manufacturer in New England for crying out loud. I believe Buffet also bought a trading stamp company. Now that was a dying business, but Buffet made a fortune with it.
 
Quote from Pekelo:

I got curious, so:

"the worst ever year for his flagship Eclectica fund was a 3% drop while it returned more than 50% in its best year. It has generated an average return of 11% since its launch 4 years ago."
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The figures mean in the other 2 years (out of 4 the fund was around) the return was in low single per cent, which is far from spectacular. Something like
year 1: 2%
year 2: 50%
year 3: 2%
year 4: -3%
 
Quote from LeeD:

The figures mean in the other 2 years (out of 4 the fund was around) the return was in low single per cent, which is far from spectacular.
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I would say 95% of the investors in the last 4 years would disagree... :)

But you did have a point...
 
Quote from LeeD:

The figures mean in the other 2 years (out of 4 the fund was around) the return was in low single per cent, which is far from spectacular. Something like
year 1: 2%
year 2: 50%
year 3: 2%
year 4: -3%
More...

Could be the return of any amature investor out there.
 
Quote from LeeD:

The figures mean in the other 2 years (out of 4 the fund was around) the return was in low single per cent, which is far from spectacular. Something like
year 1: 2%
year 2: 50%
year 3: 2%
year 4: -3%
More...

Bet Hendry and his gang got paid well though.

See, it's not so much about making your clients' a good return as long as you get paid first.
 
Quote from peilthetraveler:

Radio stations still pay to play those songs. Its a kind of complicated formula for how they pay, but its based on the revenue of the radio station. If you look at the total number of radio stations out there, you can quickly deduce that the 15,000 radio stations that exist in the US are litterally paying billions of dollars to record companies.

And thats just 1 income stream. You can bet they are paying with TV too.
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What has any of that got to do with whether it was a good call to invest? They paid peak cycle earnings for a business in secular decline. The cashflows of the business have been collapsing, it has lost billions in just the last 3 years. The investment has been a total disaster.
 
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