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A View From Here April 2012

April 17, 2012 • Print This Article

When Your Making Other Plans...

With the first quarter of 2012 in the books, March completed three straight months of outstanding performance for our investment accounts. Strength emerged from some our recent purchases as well as two of our long standing positions which continue to outperform the markets. We think you will enjoy the sight of the last statement as it should reveal the all-time high valuations for most accounts. All of this despite the ongoing fear that the world is on the verge of economic collapse. It is our belief that successful investments quietly climb the wall of other people's worry. If John Lennon was a celebrated market strategist, he just might have said, "Investment gain is what happens to you when you're making other plans." We remain quite proud of the performance for our clients and if anyone would like a detailed copy, please feel free to contact us.

Dialing For Leon Cooperman - New York April 11th

On April 10th we flew to New York to attend the Grant Interest Rate Observer conference and there were a number of notable speakers who I thought would add value to our outlook. What we got for the most part was a lot of doom and gloom forecasts. Not everyone was negative, as David Einhorn (infamous by his shorting subprime mortgages and trying to buy the NY Mets) made a very bullish case for increased interest rates and Joe Rosenberg commented that using his successful track record of over 50 years of investing, this is one of the greatest times to be an investor in large capitalized companies.

One of the advantages of these conferences is that the speakers, while celebrated in their profession are often available to speak to you during coffee breaks, which we take full advantage of. I used that as an opportunity to approach Mr. Einhorn and ask why he felt the need to speak, when his investments are pretty much private affairs. His answer was interesting. He felt that as a successful investor, he has a lot to add to make the world a better place and by speaking aloud about interest rates, just maybe a decision maker might listen. He also said it provides a forum for him to clearly define his views and appreciates questions that might test his beliefs.

Luckily for us, we happen to be seated very close to one of the most outspoken billionaire investors - Leon Cooperman: Cooperman is widely considered one of the smartest investors on Wall Street; prior to establishing his hedge fund in 1991, he spent 25 years at Goldman Sachs. At an early afternoon break he turned around and said aloud, "I can't get any reception in here", so I offered my phone. After commenting that I am a dinosaur for still using a Blackberry (little did he know, I just replaced old one two days earlier) his Iphone got the reception he was looking for. This opened an opportunity to engage in some brief conversation about his view of this overwhelmingly bearish conference. He agreed that this was too negative and commented that the policy makers around the world must continue to accommodate economic recovery.

From our perspective, we remain very optimistic about the prospects for our investments and do not understand why predictions of dire consequences permeate so loudly. One of the participants whom I could not locate, named Seth Klarman was in attendance. His book Margin of Safety is considered by many to be an investment classic on the level of Benjamin Graham's The Intelligent Investor. He has argued that successful investing is not predicated on economic outlook but rather on the individual merits of a corporation. It has been said that economists have predicted 10 of the last 3 recessions.

Leon Cooperman walked out of the conference early and turned to James Grant as he left and said - "this is too bearish". We know he said this because, Mr. Grant was the last speaker…and before he went into his smug tirade of Ben Bernanke federal policies; he got chuckles from the crowd from reciting Mr. Cooperman's comments. Except for the concert, the evening before - we didn't love our New York trip this time, but generally find them informative and the pursuit of best practices on your behalf.

Thanks for taking a look!

...and as always...

All Good Things,

Adam

Filed under: Uncategorized

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital Corporation ("MRCC"). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member-Canadian Investor Protection Fund / member-fonds canadien de protection des épargnants.

Mackie Research Capital Corporation (MRCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRCC website please understand that it is independent from MRCC and that MRCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRCC.

 

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