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The Lonely Capitalist

Hedge Fund Letter Consensus
Q2 2017

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The goal of this newsletter is simple: collect as many hedge fund letters to investors as I can get my hands on and find consensus topics of discussion.

A total of 69 investor letters, interview transcripts and newsletters were used for this report. As always, please send us any current hedge fund newsletters you come across.

Letters are first annotated and undergo natural language processing (NLP) to identity named entities and coreferences (among other tasks) and are then pumped into a text search engine to find consensus topics among all funds. This same text search engine is available to readers to use for possibly finding additional topics of interest. Part of the annotation includes identifying new buys/sells, and existing holdings, fund performance, cash allocation, and key opinions.

Why Hedge Fund Letters?

Hedge funds with over $100 million in investable assets in the U.S. are required to filing quarterly 13F holdings reports to the SEC. These filings provide great insight and should be a part of everyone's research. You can use WhaleWisdom.com to get detailed analysis of 13F holdings and find consensus picks.

13F Limitations: 13F filings have some limitations however. For starters 13F filings aren’t due until 45-days after the quarter close date. Letters to investors are typically more timely than this. 13F filings are limited to long positions in US equities, call/put options/convertible notes and ADRs. So no disclosure of cash positions, international holdings, shorts, real estate, distressed debt, etc. You are missing the complete picture of a fund’s true investment exposure.

Hedge Fund letters don’t necessarily include all investments either, but oftentimes big stakes are disclosed in the letter along with the fund's rationale for choosing them. Hedge Fund Letters also include opinions from the manager on the overall direction of the market and on new investments.

These are the best investors in the world. Reading their letters gives us a glimpse into their thinking and methodology. We can leverage hedge funds' vast resources and knowledge without the associated cost.

The Shiller Cyclically Adjusted PE Ratio stands at almost 30 versus a historic median of 16. This multiple was exceeded only in 1929 and 2000 – both clearly bubbles.

The “Buffett Yardstick” – total U.S. stock market capitalization as a percentage of GDP – is immune to company-level accounting issues (although it isn’t perfect either). It hit a new alltime high last month of around 145, as opposed to a 1970-95 norm of about 60 and a 1995- 2017 median of about 100.

Oaktree Capital

The ‘Buffett-metric’ US market cap to GDP stands at 135%, eclipsed only in history for 3 months at the 2000 bubble peak where it reached 145% briefly. The volatility index (VIX, aka the “fear index”) also reached an all-time low recently at 8.8% - the long term average is over 20%. Retail investor margin debt also has reached new highs.

Meson Capital

The CAPE ratio has been widely cited as evidence of U.S. stock market overvaluation. The present U.S. equity CAPE ratio is the highest it has been except during two famous market peaks— 1929 and 1999. We believe the CAPE ratio is cause for concern, but not alarm.

we do not believe we are in the midst of an economic or market bubble. If there is a benefit to the subdued economic recovery we have recently experienced in the U.S. where GDP growth has been averaging about 2.0%, it is that the economy has not built up the excesses that it did during past peaks in the CAPE ratio.

Rockefeller & Co

It is now eight years into the current bull market, the Shiller price to earnings ratio is near 1929 highs, and other metrics, such as the S&P 500 price to sales ratio, are at all-time highs.

Grey Owl

Key Metrics Look Inflated

Several funds pointed out the Buffett indicator is at an all-time high

VIX Volatility

Lots of discussion about volatility or the lack thereof. Implied Volatility is at an all-time low.

last week’s VIX was the lowest in its 27-year history – matching a level seen only once before. The index was last this low when Bill Clinton took office in 1993, at a time when there was peace in the world, faster economic growth and a much smaller deficit. Should people really be as complacent now as they were then?

Oaktree

The volatility index (VIX, aka the “fear index”) also reached an all-time low recently at 8.8% - the long term average is over 20%.

Meson Capital

While there may be a mathematical answer for why volatility is low when nearly every financial asset trades at all-time highs, common sense might suggest the opposite conclusion.

The lower the volatility, the more risk investors are willing to or, in some cases, required to incur.

any spike in equity markets realized volatility, even to historical average levels, as the potential to drive a significant amount of equity selling (much of it automated).

Such selling would, in turn, further increase volatility which would call for more de-leveraging and yet more selling.

... 2017 is the least volatile year since 1965.

While there may be a mathematical answer for why volatility is low when nearly every financial asset trades at all-time highs, common sense might suggest the opposite conclusion.

While leverage is not directly responsible for every financial disaster, it usually can be found near the scene of the crime. Structural leverage linked to low realized volatility may well prove destabilizing and the precipitant, or at least an accelerant, for the next financial crisis.

One thing, however, is for sure: anyone who is directly or indirectly shorting volatility at the current lows is betting current benign environment will persist. Our experience would suggest that, “benign” and “persist” are not words normally associated with one another.

Baupost

Equity volatility has been low which is creating strong opportunities to enter convertible arbitrage positions at attractive valuations.

The lack of market volatility has made certain asset classes such as private equity and peer-to-peer lending more attractive to investors.

CQS

In our opinion, if there is a “bubble” anywhere, there is a huge bubble in “volatility” – or the lack there of.

When one measures the current state of seemingly non-existent stock market volatility, squared against current valuations, the idea of a bubble in investor compliancy may not seem so far-fetched.

Wedgewood

This development is important because it means that many hedge fund managers are being forced to lever up to maintain the volatility metrics that they have promised their investors.

In our view, the combination of high leverage and low volatility is not a good one, particularly at a time in the cycle when index flows are luring performance chasers into an increasingly select number of stocks.

KKR

The low volatility in the U.S. stock market, largely influenced by still low interest rates and abundant global liquidity, should not be mistaken for low risk.

IP Capital Partners

We believe that US growth will pick up in the second half, driven by seasonality and other factors.

Third Point

Yet when we look around the world, we see reasons for optimism.

Pzena Investment Management

Reminders that the bull market is aging are everywhere. What is less well understood is that based on monthly data, for the current bull market to be the longest ever, it would have to continue until….. (wait for it…) the fourth quarter of 2023.

Laughing Water Capital

I believe they will edge higher. I am constructive both for equity and credit markets, notwithstanding that in aggregate they are at the richer end of the valuation spectrum. As always, I am mindful of ‘potholes’, however, I do not see any ‘black holes’ on the horizon.

CQS

Can the Bull Market Continue?

Most funds were cautious, but a few think the market has more room to go.

Bears

Is the market running out of steam?

The bogeyman of a bear market is something portfolio managers tell their young analysts to make them work harder, but he hasn’t been seen or heard from in years, breeding incredible complacency as measured by the historically low volatility in the markets today.

we are likely to become more cautious in the near future and may look to hold 20% to 30% of our assets in cash in anticipation of better investment opportunities at lower prices or engage in hedging out market risk.

Artko Capital

the current market lacks most of the behavioral indicators of a true bubble. Rather, we should be braced for a long-drawn-out and painful flight path back toward the old ratios we know so well.

GMO Jeremy Grantham

Perhaps the best lessons learned from market history are investor emotions. Fear and greed no doubt push the market pendulum far and wide. However, at market highs, greed can morph into a permanent state of complacency. Such investor complacency, starting in non-stop force in early 2016, and continuing for all of 2017, is as comfortably numb as it was back in the halcyon days of the spring of 2007.

Note warily that margin debt is approaching $550 billion – or about double the amount at the top of the tech bust in 2000.

Wedgewood

"We continue to believe that stocks and bonds are expensive.

Weitz

Asset prices are high across the board. Almost nothing can be bought below its intrinsic value, and there are few bargains. In general the best we can do is look for things that are less over-priced than others.

the gains enjoyed by the “wise man in the beginning” – the first to seize upon the grain of truth – tends to attract “the fool in the end” who jumps in too late.

when capital is in oversupply, it is inevitable that risk aversion dries up, gullibility expands, and investment standards are relaxed

Oaktree Capital

The point of this walk down memory lane is to highlight how similar the dichotomy was in 1999 versus today, with the hot stocks like AOL, Cisco, and JDS Uniphase getting unimaginable valuations while those boring old free cash flow generators we owned back then were seen as cheap for good reason

with valuations in the U.S. today at levels not seen since 1999 (although not as extreme as then), our current positioning amongst the unloved but discernibly cheap free cash flow generators that we own today should be a source of comfort rather than concern, despite the recently disappointing results.

Mittleman Brothers

From today’s starting point, future returns on US equities are expected to be negative over a seven-year period. That is, investors who buy the S&P 500 (or other US equity indices) today, should plan on losing money

Mr. Rodriguez began by commenting on the state of the investment management industry: Given that I am no longer involved professionally in managing money, I believe the standards in the industry are being compromised; monetary policy has so totally distorted the capital markets. You are now into the eighth year of a period that is unprecedented in the likes of human history. In other words, central banks (the Federal Reserve, the European Central Bank, the Bank of Japan, and the Peoples Bank of China) have so manipulated the money supply and interest rates that he believes the typical investment manager is having to compromise on valuation fun

Grey Owl Capital Management

Some may object and insist these market leaders deserve this high valuation because they have a great future ahead of them. This may be true, but, to that point, I would like to recollect an article in Fortune from August 2000 headlined “Ten Stocks to Last the Decade”. These were the market leaders at that time: Nokia, Nortel, Enron, Oracle, Broadcom, Viacom, Univision, Charles Schwab, Morgan Stanley, and Genentech.

Vltava Fund

Not investing in such special companies for fear of a price correction is usually a recipe for regret

IP Capital Partners

The actors (stocks) always change, but the market script of greed and fear cycles doesn’t. That said, investors enthusiasm for the current crop of tech darlings does suggest that this is becoming a very “crowded trade.”

We are also reminded that the current euphoria for technology stocks, to the inclusion of many other sectors, has more than a passing resemblance to circa 2000.

Wedgewood

Their sheer size alone suggests that they cannot keep compounding like they have.

Rockefeller & Co.

we are underweight tech and the so called FAANG stocks (Facebook, Amazon, Apple, Netflix and Google (Alphabet)), as well as the also-loved bond-proxy stocks that have benefitted from record-low interest rates.

if exuberance continues to build, our tech and FAANG weighting will keep declining, creating a bigger active gap between our portfolio and the index. We will take nearterm relative pain to avoid absolute losses down the road.

Clearbridge

Rather than shout into the already loud discussion, we instead put our money where our mouth was, and made AAPL   the   Fund’s   largest   investment.

RLT Capital

How many $600 billion dollar market cap companies grew revenue 24% year-over-year last quarter? It is a pace that you cannot sustain forever, obviously. But we always evaluate the growth runway relative to price. There are still some very strong growth drivers behind Alphabet’s business. And the price is not that demanding.

it really only gets tricky when the valuation gets very stretched, and you have to start thinking about what all those moonshots should be worth. Frankly, the core business is so strong right now relative to the valuation that I do not think we are there yet [Alphabet].

Chase Sheridan - Ruane, Cunniff & Goldfarb

The thing you have to remember with Amazon is that it is just a different beast. Most of the investment the company is doing is really through the P&L. But the cash flow characteristics of Amazon are exceptional

Trevor Magyar - Ruane, Cunniff & Goldfarb

In each case where we continue to own a FANG, we believe their business to be defensible, at least over the next 10 years, and we see upside from the current stock price to our calculation of intrinsic value.

Thornburg

It seems like Amazon + Whole Foods will be an attractive combination.

Hayden Capital

the Nifty-Fifty in the 1960s, oil stocks in the ’70s, disk drive companies in the ’80s, and tech/media/telecom in the late ’90s.

Here’s a passage from one company’s 1997 letter to shareholders: We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. How many of these “important strategic partners” still exist in a meaningful way today (leaving aside the question of whether they’re important or strategic)? The answer is zero (unless you believe Yahoo! satisfies the criteria, in which case the answer is one). The source of the citation is Amazon’s 1997 annual report, and the bottom line is that the future is unpredictable, and nothing and no company is immune to glitches.

The super-stocks that lead a bull market inevitably become priced for perfection. And in many cases the companies’ perfection turns out eventually to be either illusory or ephemeral.

The powerful multiple expansion that makes a small number of stocks the leaders in a bull market is often reversed in the correction that follows, saddling them with the biggest losses

I’m not saying the FAANGs aren’t great, or that they’ll suffer such a fate. Just that their elevated status today is a sign of the kind of investor optimism for which we must be on the lookout

Oaktree

FAANG

A handful of stocks, Facebook, Amazon, Apple, Netflix, Google, the FAANGs, plus Microsoft are responsible for a high percentage of the S&P's gains.

Some love for oil and financials

We think the market largely has ignored the fact that OPEC and its partners have been behaving remarkably rationally over the last several quarters

setting aside debates about the short-term price of oil, we note that we are now in the middle of a third year of constrained investment in the development of large-scale fields, and we continue to believe that this will lead to a longer-term supply-demand imbalance.

Wedgewood

But the fact remains that global oil inventories are indeed normalizing, and prices remain well below what is needed to incentivize enough supply to meet demand long-term.

We are confident that depressed investment will continue to bite into global supply, and the massive uptick in shale activity will lead to a reversal of efficiencies. With demand expected to grow 1.3-1.5mbd, and lack of new conventional oil fields, we see room for US supply growth of 1mbd+ annually for the foreseeable future, while still maintaining a balanced oil market.

Elm Ridge

Additional tailwinds for Citi and other U.S. banks may materialize if industry deregulation is pushed through Congress, and as economic activity picks up and interest rates rise, supporting net interest margin expansion.

Clearbridge Value Trust

I am still finding many good opportunities in the small bank space

Alluvial

We continue to believe that in light of overall supply/demand considerations, the prospects for ongoing Saudi constraint and continued rationalization of capital spending by the oil majors, oil prices should drift higher over the longer term.

Tweedy, Browne Fund

Beyond the next twelve months? accelerated share buyback schedule, we see loan growth maturing with the economic cycle, moving away from Commercial Real Estate and growing in areas like consumer mortgage and business lending. Rates paid for deposits remain stubbornly low from a depositor perspective, but are providing an increasing spread for these banks as the Federal Reserve has raised its benchmark lending rate 4 times for 100 basis points off ? generational lows.

Third Avenue Management Value Fund

Even after the sharp rise in stock prices for all the large banks from mid-2016, we believe valuations remain extremely compelling. As the banks re-establish investor confidence over time, we would expect the discount rate applied to narrow, helping improve valuations further.

Pzena Investment Management

9 out of every 10 shares being traded on the major U.S. markets is being done so with no regard for price or value.

Ewing Morris

While the fund flow pendulum has dramatically swung the way of passive in recent years, it will be precisely this movement that creates more opportunities for outperformance from active strategies that seek to invest in businesses irrespective of where they rank in an index or underlying benchmark

Ophir Asset Management

The more expensive a share is, the more money that flows into it. I call this the perverse cycle of index investing. ...This simultaneously means that money tends to flow away from shares which are becoming steadily cheaper.

When the market is this expensive, we believe we can expect the index to provide returns of around 2% per annum over the next ten years.

Relative performance of passive and active funds is cyclical and the trend often reverses itself at major market turning points

people favour active investment after major market crashes whereas they cling to passive investment before them.

Vltava Fund
 

Indexation has unwittingly become the place to go for  systemic risk.

Horizon Kinetics

The recent underperformance on the part of active investors may well prove to be cyclical rather than permanent

in the current up-cycle, over-weighted, liquid, large-cap stocks have benefitted from forced buying on the part of passive vehicles, which don’t have the option to refrain from buying a stock just because its overpriced.

Like the tech stocks in 2000, this seeming perpetual motion machine is unlikely to work forever

Oaktree Capital

most people feel safest in the herd.

if there were two companies that were completely identical except that one was more expensive than the other, the SP500 would own MORE of the expensive company. If you are keeping score at home, this is equivalent to “buying high.”

if there were two companies that were completely identical except that at one company, the management team owned a lot of shares (presumably because they think the stock will go up), the SP500 would own LESS of this company. for those keeping score at home, this means that the more confidence the management team has, the less stock the SP500 owns

Laughing Water Capital

Indexation Discussion

Complete Results

Performance

Performance for Quarter

Performance YTD

Cash Allocation

Activity

New

Alibaba Group Holding Ltd
Alkermes plc .
Amaysim
AMN Healthcare
AutoZone
Bank of the Ozarks (OZRK)
Blue Apron (APRN) – new short
Celgene
Cheniere
Energy 4.25% Convertible Notes due in 2045
Constellium NV (Netherlands)
DXC Technologies
Eagle Bulk Shipping
Eros International (EROS) Short
Fairfax Financial
Finisar Corp
General Electric Co. (GE) .
Grupo Cementos de Chihuahua (GCC)
Haynes International
Horizon Global
Howden Joinery Group
JD.com (JD)
Molson Coors Brewing Company
Navios Maritime Containers (Norway)
New York REIT’s (NYRT)
Ocado (OCDO LN).
PDC Energy
Pinnacle Investment Management (PNI)
Pioneer Natural Resources
Points International (PCOM)
Pure Storage, Inc.
Reliance Steel & Aluminum (RS )
Ryman Healthcare
Scandic Hotels
ServiceMaster Global
Sidetrade
Spartan Motors (SPAR)
STORE Capital (STOR)
Toshiba (Japan: 6502)
TransDigm Group
TripAdvisor (TRIP)
Valeant
Viktoria SA (France)
Walgreen Boots Alliance
Warrior Met Coal, Inc.
WesBanco Bank
Wesco

Added to

Apple (AAPL)
Destination XL (DXLG)
Entravision Communication (EVC)
EZ Corp (EZPW)
Fastenal
Five Point Holdings LLC
HCA Holdings (HCA)
Hudson Technologies (HDSN)
Iteris, Inc (ITI)
Liberty
Ventures (LVNTA)
Max21 AG.
Mesa Labs (MLAB)
Netscout (NTCT)
Now Inc. (DNOW) (2 funds)
Priceline
Quotient (2 funds)
Ross Stores
Songa Bulk
Sprouts Farmers Market (SFM)
Tractor Supply Company
Vertu Motors (2 funds)
Viacom (VIAB)

Trimmed

Akzo Nobel
Alphabet
Avnet Inc
Cisco Systems
FedEx
G4S plc
Hongkong & Shanghai Hotels
Mediaset España Com
Munich Re
New York REIT (2 funds)
Revlon (REV)
SCOR SE
Segro
Select Comfort
StarTek (SRT)
TT Electronics
Villeroy & Boch
Wynn Resorts

Sold Out

ABB Ltd
ABB Ltd
Altice
Atwood bonds
Avinger, Inc.
Barnes & Noble Education
BinckBank NV (BinckBank)
Boeing
Cisco Systems
Colgate-Palmolive
Coty
CSW Industrials (CSWI)
Deere
Enersys
Envision Healthcare.
Fastenal
Fossil
Graham Corporation (GHM)
IBM
IHS Markit (INFO)
Inmobiliaria Colonial
InterActiveCorp
JNS
Leucadia
Level 3 Communications.
Liberty Expedia (LEXEA)
Liberty Global
Mandom Co.
National-Oilwell Varco (NOV)
Netflix, Inc.
OTC Markets Group (OTCM)
PACCAR
Sally Beauty Holdings
Selvaag Bolig ASA (Norway)
Shinko Shoji Co.
TACO
Time Warner
TT Electronics
Walt Disney Company
Whiting Petroleum bonds

Largest Holding

Only a few funds identify their asset allocation % or mention which holding is the largest in their portfolio.

Alphabet Inc
Apple (AAPL) (2 funds)
Barclays
Berkshire Hathaway - Cl A & B
Capstone Mining
Cash and Cash Equivalents
Contura Energy.
EXO IM
Ferronordic Machines - Pref.
General Motors
Heineken Holding NV
Level 3 Communications
Liberty Broadband Corp. - Series A & C
Max 21 AG
NEOPOST
Nestle SA
NextEra Energy, Inc.
Oracle
Revlon Inc. (REV)
Safran SA
Sevcon
The Blackstone Group L.P.
Thermo Fisher Scientific, Inc.
TSE Trinseo SA

All Holdings

Name
3M Co1
A2 Milk Company (A2M)1
AAWW Atlas Air Worldwide Holdings Inc1
Acadia Pharma (VZ).1
Adacel Technologies (ADA)1
Admiral Group1
ADNT Adient plc1
Adobe1
Adtalem Global Education – ATGE1
Advanced Emissions Solutions.1
AerCap Holdings (AER)1
Affiliated Managers Group1
Agro-Kanesho [4955:JP]1
Alamo Group (ALG)1
Alerus Financial1
Alexion Pharmaceuticals Inc1
Alibaba Group Holding Ltd1
Align Technology1
Alkermes plc .1
Allergan PLC2
ALLY Ally Financial Inc1
Alphabet13
Amaysim Australia LTD.3
Amazon (AMZN)4
Ambac.1
AMC Networks2
American Tower1
Amgen (AMGN)1
AMN Healthcare1
AngioDynamics [ANGO]1
Anthem – ANTM1
Antofagasta plc1
Apple3
Applied Materials, Inc.1
Asante Inc. [6073:JP]1
Associated Capital1
Atwood Oceanics, Inc.1
AURELIUS Equity Opportunities SE & Co. KGaA (AR4 GY).1
AutoZone1
Avnet (AVT)1
Axel Springer SE1
A P Mollar-Maersk1
Bangkok Bank PCL1
Bank Debt of Neiman Marcus1
Bank of New York Mellon2
Barclays1
Baxalta1
Baxter International3
Bayer (Germany: BAYN)1
Bergbahnen Engelberg-Titlis-Trübsee1
Berkshire Hathaway Inc3
BETT1
BlackRock, Inc2
BOL FP1
Bollore.1
BP2
Brookfield Asset Management,1
Calloways Nursery.1
Canfor (CFP)1
CANON MARKETING1
Capstone Mining1
CarMax, Inc.2
Carrizo Oil & Gas (CRZO)1
Cavco (CVCO)1
Celgene1
Cerner (CERN)1
Cheniere1
Chesapeake Energy1
Cheung Kong Property Holdings Ltd2
CHKP1
Choice Hotels [CHH]1
Cisco Systems Inc2
Citigroup Inc2
CME Group1
CNE LN1
CNH Industrial2
Colfax Corp1
Collins Foods (CKF)1
Comcast Corp1
Comerica (CMA)1
CommerceHub (CHUBK)1
Conduent (“CNDT”)1
Conn’s1
CONSOL Energy2
Constellation Software Inc1
Constellium N.V. (“CSTM”)2
Contura Energy.1
Core Lab1
CRE Inc. [3458:JP]1
Credit Acceptance Corporation3
Credit Corp Group (CCP)1
Cubic Corporation (CUB)1
CVS1
DBS Group Holdings Ltd1
Delta Air Lines, Inc.1
Dentsply Sirona Inc1
Destination XL (DXLG)1
Devon Energy (DVN)1
Diageo plc1
Discover Financial (DFS)1
DISH Network1
Dollar Tree, Inc.1
DXC Technologies1
Eagle Bulk Shipping1
easyJet plc1
eBay1
EI du Pont de Nemours & Co.1
EM Systems [4820:JP]1
Ennis – EBF1
Enterprise Products Partners L.P.1
Entravision Communication (EVC)1
Enzo Biochem (ENZ US).1
Equinix1
Eurazeo.1
Eurotech S.P.A..1
ExlService Holdings [EXLS]1
EXO IM1
EXXON1
Exxon Mobil Corp.1
EZ Corp (EZPW)1
Facebook3
Fairfax Financial1
Fastenal1
FCAU Fiat Chrysler Automobiles1
Federal Home Loan Mortgage Corp.2
Federal National Mortgage Association1
FedEx1
Ferronordic Machines - Pref.1
Finisar Corp1
Five Point Holdings LLC1
FLEX Flextronics International Ltd1
FNF Group1
Fonar Corporation1
Forest City Realty Trust1
Forestar Group1
Frontline1
FTI Consulting (FCN)1
FUKUDA DENSHI1
G4S plc1
Gaia, Inc. (GAIA)1
Gaumont SA1
General Electric Co. (GE) .4
General Motors (GM)1
Gilead Sciences, Inc.1
GlaxoSmithKline plc1
Global Logistic Properties (GLP )1
GMAC Capital Trust I, Inc.1
Greatview Aseptic Packaging (468 HK)1
Grenke1
Grupo Cementos de Chihuahua (GCC)1
Gruppo MutuiOnline.2
GT Goodyear Tire & Rubber Co1
Hallmark Financial Services [HALL]1
Harley-Davidson [HOG].1
Haynes International1
HC2 Holdings, Inc.1
HCA Holdings (HCA)1
Heineken Holding NV1
Henderson Land1
Henkel AG & Co1
heung Kong Property1
Honda Motor Company1
Horizon Global1
Howard Hughes1
Howden Joinery Group1
HSBC Holdings plc1
Hudson Technologies (HDSN)1
Humana – HUM1
Hyundai Motor Co1
ICF International (ICFI)1
IDP Education Ltd (IEL)1
Illumina1
Imperial Metals Corp2
Intercontinental Exchange1
Interfor Corp1
International Flavors & Fragrances, Inc.1
Name
International Game Technology (IGT)1
International Wire Group, Inc.1
Intuitive1
Surgical1
Investor AB (INVEB)1
iSelect Ltd (ISU)1
Iteris (ITI)1
JD.com (JD)1
Johnson & Johnson2
JPMorgan Chase & Co.1
KB Financial Group (KB)1
Keycorp (KEY)1
Laboratory Corp. of America Holdings.1
Land Securities1
Lands' End, Inc.1
Lennar (LEN)2
Level 3 Communications1
Liberty1
Ventures (LVNTA)1
Liberty Broadband Corp. - Series A & C1
Liberty Global Group - Class C.2
Liberty Interactive (QVCA)1
Liberty Media Corp1
Liberty Sirius XM Group (LSXMK)2
Lindsay Corp. [LNN]1
LivaNova (LIVN)1
Lowes2
LSB Industries (LXU)1
Lundin Mining1
M11
Madalena Energy (MVN; MDLNF)1
Magellan Financial Group Ltd (MFG)1
Manpower – MAN1
Masco (MAS)1
MasterCard3
Max 21 AG1
McKesson – MCK2
Medikit [7749:JP]1
Medtronic plc1
MEIP1
Meritage Hospitality Group.1
Mesa Labs (MLAB)1
Metals X Limited (MLX)1
Michelin1
Microsoft5
Millennium & Copthorne1
Molson Coors Brewing Company1
Monitronics International, Inc.1
MTOR Meritor Inc1
Multi-Color Corporation (LABL)1
MUNICH REINSURANCE1
Mylan (MYL)1
National Western Life Group1
National-Oilwell Varco2
Navios Maritime Containers (Norway)1
NEOPOST1
Nestle SA2
Netscout (NTCT)2
NEWMONT MINING1
NextDC Limited (NXT)2
NextEra Energy, Inc.1
Novartis AG1
Novo1
NOW Inc. (Distribution NOW)4
NYRT1
OCDO LN1
Oracle Corp3
Parkway Inc.1
PDC Energy1
PIA IM1
Pinnacle Investment Management (PNI)2
Pioneer Natural Resources1
PNC Bank (PNC)1
Points International (PCOM)1
Precision Auto Care1
Priceline1
Pure Storage, Inc.1
Quotient1
Technology (QUOT)1
QVC Group - Series A.1
RACE1
Rallye SA (RAL FP)1
Ralph Lauren (RL)1
Rayonier1
Realogy Holdings Corp1
Reliance Steel & Aluminum (RS )1
RESI1
Revlon (REV)2
Roche Holding AG1
Rolls-Royce Holdings plc3
Ross Stores1
Royal Dutch Shell plc2
RR/ LN1
Ryman Healthcare1
Safran SA1
Scandic Hotels1
Schlumberger1
SCOR SE1
Scorpio Bulkers.1
Sears Canada, Inc.1
Sears Holdings Corp2
Select Comfort1
Seritage Growth Properties1
ServiceMaster Global1
Sevcon1
Sidetrade1
Siemens AG1
Sientra1
SKYW SkyWest Inc1
Songa Bulk2
Sonic Corp. [SONC]1
Spartan Motors (SPAR)1
Sprouts Farmers Market (SFM)1
Standard Chartered plc1
StarTek (SRT)2
State National Companies (SNC)1
Steadfast Group Ltd (SDF)1
Stolt-Nielsen Ltd1
STORE Capital (STOR)1
Synchrony Financial1
Target1
TD Ameritrade1
Tejon Ranch1
Teradata Corporation – TDC1
Tesla.1
Texas Pacific Land Trust1
TEXWINCA1
TFF1
TGI Triumph Group1
TGS Nopec1
The Blackstone Group L.P.1
The Charles Schwab Corp.1
The Procter & Gamble Co.1
The St. Joe Co.1
The Walt Disney Co1
Thermo Fisher Scientific, Inc.1
TITR1
TJX Companies2
Toshiba (Japan: 6502)1
Total SA1
Tower Properties1
Tractor Supply Company1
TransDigm Group1
Transocean1
Trinity Industries – TRN1
Trinity Place Holdings1
TRIP1
Trupanion1
Tucows2
Unilever NV3
United Overseas Bank Ltd1
US Geothermal (HTM)1
Valeant1
Verisign (VRSN)1
Verizon (VZ).2
Viacom (VIAB)1
Viktoria SA (France)1
Visa3
Vivendi SA2
Vornado Realty Trust,1
VOW GR1
Wal-Mart Stores, Inc1
Walgreen Boots Alliance1
Warrior Met Coal, Inc.1
Webjet (WEB)1
Wells Fargo3
Wendy’s1
WesBanco Bank1
Wesco1
Western Digital – WDC1
Westfield Corp1
Weyerhaeuser (WY)2
Wheelock & Co.1
Wynn Resorts1
Zooplus (ZO1)1
Zurich Insurance Group AG1

Shorts

Name
alpha-En
Amazon (AMZN)
AT&T
athenahealth (ATHN)
Bank of the Ozarks (OZRK)
Best Buy
Blue Apron (APRN) – new short
Caterpillar (CAT)
Coach
Cogent
Columbia Sportswear
Continental Resources (CLR)
Costco Wholesale
Dick's Sporting Goods
Discovery
Eros International (EROS) Short
EWC
Flextronics
GGP
Green Dot
HACK
Harley Davidson
Hibbett Sports
Name
IBM
Kohl's Corp
Kroger
Lululemon Athletica
Macerich
Netflix (NFLX)
Nordstrom
Omnicom
Pershing Gold
Publicis
Scripps Networks
Simon Property
Target
Tesla (TSLA)
The Gap
Verizon
VF Corp
VirnetX Holdings
Wal-Mart
Western Union
WPP
Yangtze River Development

Famous Quotes

Hedge fund managers often include famous and inspirational quotes in their letters.

Below are ones included in 2nd quarter letters.

“Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you’re still around to play the next day.” — Warren Buffett
As Adam Smith said, capital is merely stored-up labor that has been saved for use at a future date.
As the saying goes, “what a wise man does in the beginning, a fool does in the end.”
former Citigroup CEO Chuck Prince, who gained fame in the months leading up to the Global Financial Crisis for saying of the bank’s leveraged lending practices, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
I told you Bernard, never place your trust in us. We're only human. Inevitably we will disappoint you. Dr. Ford, HBO’s Westwood Season 1
Perhaps the best way to understand investment cycles is through that great statement attributed to Mark Twain: “History doesn’t repeat, but it does rhyme.”
Saint Augustine, who said: “Give me chastity and continence, but not yet.”
The coziest spot is under the warm blanket of ideology. It offers easy answers to difficult problems. But, man, is it dangerous, especially in an adapting world. Great stuff happens at the intersection of “Confident enough to take a stand” and “Humble enough to admit when something I don’t want to be true is true.” Morgan Housel.
To borrow from Ben Graham’s observation “share prices in the short term are voting mechanisms and in the long term weighing mechanisms”
Warren Buffett as having said, “Forecasts usually tell us more of the forecaster than of the future.”
Warren Buffett’s view: “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
“A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.” — Bill Gates
“Brazil is not a serious country.” — Quote attributed to Charles de Gaulle
“Doubt is not a pleasant condition, but certainty is absurd.” – Voltaire
“He who lives by the crystal ball will eat glass.” Ray Dalio Founder, Bridgewater Associates
“How did you go bankrupt?" Bill asked. “Two ways.” Mike said. “Gradually, then suddenly.” Ernest Hemingway, The Sun Also Rises
“If you ask me in retrospect what our biggest mistake is in the tech field, it’s not buying Google. We were smart enough.” — Charlie Munger, 2017 Berkshire Hathaway Annual Meeting
“If you focus on your competition, you will never deliver anything truly innovative.” — Eric Schmidt, How Google Works
“Stability leads to instability. The mores table things become and the longer things are stable, the more unstable they will be when the crisis hits.” – Hyman Minsky
“The evolving social and digital media platforms and highly innovative and relevant payment capabilities are causing seismic changes in consumer behavior and creating equally disruptive opportunities for business.” – Howard Schultz
“Volatility is a welcome creator of opportunity.” ~Seth Klarman
“Well, that was pretty awesome – and I mean that in the worst possible way.” – Paul Krugman
“When something seems too good to be true, it probably is.” — Anonymous
“When you're that successful, things have a momentum, and at a certain point you can't really tell whether you have created the momentum or it's creating you.” – Annie Lennox
“With my sunglasses on, I'm Jack Nicholson. Without them, I'm fat and 60.” Jack Nicholson