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Saturday, February 16, 2013

let’s just say his arrogance and sanctimonious pontification just is something that will never become an acquired taste with me $hlf $jcp

let’s just say his arrogance and sanctimonious pontification just is something that will never become an acquired taste with me $hlf

Answer:  From a portfolio management/fiduciary duty standpoint, without question that is the big bulls eye on his back.  Seriously, what sane fiduciary engages in an infinitely risky short position of 20-25% of a public company that is buying back its stock feverishly with massive free cash flow, and then paints himself into a corner by both publicizing his outsized position while antagonizing the one investor on Earth who has the will and skill to eviscerate him?  As far as personal integrity, Ackman may not be a genius, but he can be terribly disingenuous.  As seen over and over again in Ackman’s ‘blind them with your science’, intentionally overwhelming-in-volume presentations, he can play David Copperfield smoke-and-mirror games with the facts.  Like with a magician, Ackman’s sheer volume of distracting bells and whistles allows him to both a) take data out of context to confuse his audience, and b) omit from his “stage” material, related facts that substantially negate those selective words and numbers that he highlights in his bearish favor.  He knows that nearly all Wall Street analysts and reporters, already over-worked by endless streams of news and data points, just don’t have the time to hunt down, open up and analyze source documents that expose Ackman’s legerdemain.

Answer:  Well, Pershing Square’s business model is one of highly concentrated positions.  However, shorting 20-25% of a public company utilizing an estimated 10% of Pershing Square’s equity capital?  That takes risk to an entirely new, and potentially irresponsible, level.
9. The hedge fund community has a track record of being aggressive with their investments but not with fellow hedge fund managers. I can’t recall a case like this with so many high profile investors lining up on the other side of a trade against someone and a handful really criticizing him.  I know people want to make money on this but has Ackman burned a lot of bridges with others in the last 10 years?
Answer:  Making money while investing is sweet.  Making money while taking the other side of the industry’s biggest pontificator is pure honey.  There are a lot of hedge funds dipping into the beehive on this one.
10. You had some kind words for Icahn in your recent Bloomberg TV interview.  Why is he “the best investor of our time”?
Answer:  In his 30s, Icahn was taking over airlines.  Forty years later, after establishing a track record second to none, he’s still killing it making investments in widely disparate industries, from Netflix DVD’s to CVR’s refineries to Herbalife’s protein shakes.  He’s nearly 80 years old, yet hold his own discussing his investment rationale on live, highly confrontational international television.  What can I say?  He’s King Carl."

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