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Showing posts with label Mutual Funds. Show all posts
Showing posts with label Mutual Funds. Show all posts
Investing George Soros' In Herbalife
The Soros investment means that in continuing his massive bet against Herbalife’s stock, Ackman’s Pershing Square hedge fund is on the opposite side of arguably the two greatest traders in the history of Wall Street. The other legend Ackman is up against in his Herbalife trade is the only guy on Wall Street who is richer than Soros. Carl Icahn, whose net worth is $20 billion, invented the investment strategy that Ackman now practices, now known as activist investing. Icahn owns 16.5% of Herbalife and has two representatives on the company’s board.
According to CNBC, Soros’ position in Herbalife is large enough to be one of his top three positions. Soros is involved in the managing of his money but the chief investment officer at Soros Fund Management is Scott Bessent, who handles the day-to-day operations. The forces of Ackman claim that the man responsible for Soros’ Herbalife investment is Paul Sohn. Nevertheless, Ackman is shorting 20 million shares of Herbalife, a $1 billion bet, because he thinks the company is a pyramid scheme that will collapse once people realize the fraud and regulators shut it down. The optics of the Soros investment in Herbalife get even worse for Ackman because his short investment thesis includes a strong moral component. Ackman has said he has a “moral obligation” to fight Herbalife, claiming the company takes advantage of low-income people and minority groups, and will give his personal profits from the short trade to charity.
Ackman’s lawyers have reportedly asked the Securities & Exchange Commission to investigate how Soros’ position in Herbalife was leaked to CNBC’s Scott Wapner, the star reporter who orchestrated Ackman’s televised verbal brawl with nemesis Carl Icahn in January by getting Icahn to make a surprise call during Ackman’s interview with Wapner. Ackman’s surrogates are suggesting that the leaking of Soros’ position potentially constituted improper market manipulation designed to create a short squeeze. Herbalife’s stock is now up by 100% in 2013 and continued to rise in Thursday morning trading. That means that the Pershing Square hedge fund’s Herbalife position has suffered estimated paper losses of some $650 million in 2013, given that Ackman has said he shorted 20 million shares and told CNBC on Wednesday that he has not covered a share.
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Ex-Goldmanite 'Hebat Fab' Tourre
Amid a broader crackdown on the securities industries, the Securities and Exchange Commission secured one of their most high profile victories on Thursday, as a jury in New York found former Goldman Sachs trader Fabrice Tourre liable of civil-fraud. Tourre is one of the most visible faces of Wall Streethubris during the financial crisis, having been found to mislead investors in a mortgage-backed securities deal that netted billionaire John Paulson’s hedge fund $1 billion just as the housing bubble was bursting.
The jury’s decision puts the focus on Tourre’s defense team, bankrolled by Goldman Sachs, which days ago chose not to call any witnesses to the stand in an apparent show of confidence.
The case was centered on Abacus 2007 AC1, a mortgage-backed security (MBS) that Goldman helped to build and Tourre sold, and hits at the core of what major Wall Street banks were doing in the buildup to the financial crisis.
Goldman Sachs then brought in financial firm ACA to work with Paulson in selecting the mortgages that made up the MBS.
Tourre then turned around and offered the security to clients, using language the jury found to be purposefully misleading, masking Paulson’s intention to short the security, and in some cases masking his involvement in the deal. Andrew Ceresney, co-director of the SEC’s enforcement division, said: “we are gratified by the jury’s verdict finding Mr. Tourre liable for fraud. Goldman Sachs had settled the case with the SEC for half a billion dollars in 2010, while Tourre chose to fight the charges.
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LinkedIn income climbed $ 363.7 M
SAN FRANCISCO (Reuters) - LinkedIn Corp (LNKD) reported revenue of $363.7 million in second quarter, a 59 per hundred jump, after its members numbers proceeded to soar after some quarters of slowing down development.
The San Francisco business, one of the few social newspapers stocks that have fulfilled its hype since going public, now brags 238 million users, a 37 per hundred boost from a year before.
LinkedIn shares, which shut at an all-time high of $213 on Thursday before the newest results, have roughly increase two-fold in the past year.
LinkedIn posted earnings per share of $0.38 on revenue of $363.7 million. Analysts expected 31 cents per share on revenue of $354 million. In the year-ago period, LinkedIn posted earnings per share of 16 cents on revenue of $228 million.
Premium subscriptions generated $73.0 million in the quarter, up 68% from the year-ago period and represented 20% of total revenue, up from 19% a year ago.
U.S. business was 62% of total revenue, while international was 38%.
Total LinkedIn users were 238 million, up 37% from the year-ago period, and the first sequential acceleration of growth since LinkedIn’s 2011 IPO. Monthly unique visitors were 189 million, including LinkedIn’s SlideShare unit. LinkedIn has beaten analysts’ expectations in every quarter as a public company since pricing its IPO at $45 per share in 2011.
(Reporting by Gerry Shih; revising by Bernard Orr)
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Wall Street Markets
JPMorgan Chase (NYS:JPM - News), Bank of America (NYS:BAC- News) and Wells Fargo (NYS:WFC - News) were among the companies giving the greatest boost to the S&P 500. Shares of JPMorgan gained 1.6 percent to $56.61, Bank of America rose 2.3 percent to $14.94 and Wells Fargo added 1.7 percent to $44.24. The S&P 500 financial index was up 1.7 percent.
Data on weekly U.S. initial jobless claims and national manufacturing came in better than expected, while construction spending dropped 0.6 percent in June, below forecasts calling for a 0.4 percent rise.
The drop in initial claims, coupled with Wednesday's better-than-expected ADP employment report, bodes well for July payrolls data on Friday.
The Dow Jones industrial average was up 133.94 points, or 0.86 percent, at 15,633.48. The Standard & Poor's 500 Index was up 19.98 points, or 1.19 percent, at 1,705.71. Global central banks on Thursday also remained accommodative, with European Central Bank President Mario Draghi reiterating the ECB's rates will remain at their present level or lower for an "extended period.
Yelp Inc (YELP.N) surged 25.6 percent to $52.51 after the consumer reviews website posted a smaller-than-expected quarterly loss and forecast third-quarter revenue above analysts' expectations.
The company's shares jumped 13.5 percent to $175.65, after hitting an all-time high of $180.99 earlier in the session.
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Is Investment Management
For most people who invest through 401k accounts at work, investment management takes the form of mutual funds. Behind any active mutual fund there is a lead investment manager and, often, a team of support managers. They pick the stocks or bonds that make up the fund.
Balancing risk
Since the combination of funds is crucial, many 401k plans try to offer their members a “set it and forget it” option for investment management, often in the form of target-date funds or pre-cut portfolios. In the latter, the measure of stock vs. bond funds is designed to match your age and ability to accept risk.
The idea is to completely automate the investment management process.
Each underlying investment fund has its own fees, in order to pay the managers doing the trading. Target-date funds have costs, too. Fund fees cost you real money, and that affects your performance dramatically over time.
Pension plan ideal
The ideal investment management plan would combine very low costs with an appropriate portfolio mix for the age and time horizon of each investor. Increasingly, the major brokerages offer exchange-traded funds (ETFs) with minimal fees and, often, no commission charges. If you don’t have access to a pension manager but do have the ability to pick your own investments, then the challenge is building that mix of investment types yourself while keeping costs low.
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