Sohn Conference

One of the pieces in this week's Barron's is about the 12th annual Ira W. Sohn Investment Research Conference, held in New York. The event is "named for a Wall Street trader who survived a childhood cancer but succumbed at age 29. A related foundation has raised millions for pediatric cancer causes and is expanding its efforts with prizes for research oncology."

So it's for a good cause. And the article has some interesting stuff.

One notable item is that Wilbur Ross likes US coal producers and owns International Coal Producers (symbol: ICO) a small, West Virginia outfit.

Another is James Chanos recommending shorting Macquarie Bank. Shorting is something I don't engage in generally and I confess to having no idea whether the Aussie bank is a good short candidate or not. I don't know that much about Chanos, except he supposedly said at another conference a while back that Fairfax Financial (FFH/NYSE) was "a zero" and gave as one of his supporting reasons that Prem Watsa had been previously dubbed "the Warren Buffett of Canada."

I believe Fairfax's performance since then has proven Chanos wrong. But anything could happen and I could still end up with egg on my face, I suppose. Yet whether Fairfax goes on to become a zero or not will have nothing to do with some journalist previously hyping Watsa as the Buffett of the north.

Lastly, Mason Hawkins appeared at the Sohn conference:

Mason Hawkins, chairman of Southeastern Asset Management, closed the day's proceedings. He offered no picks, but plenty of sage advice: Have the discipline to say no and the patience to wait for the right opportunity; make decisions even when no one agrees with you, and take advantage of others' fear and greed. Oh -- and be a prolific reader of the financial press.

Regular readers of Controlled Greed.com know I've been doing more selling than buying since last fall. Actually I haven't bought anything -- though I am hoping that will change. But in the meantime, Hawkins' advice about being patient is prudent.

Comments

[Alex]

For those that don't have access to Barrons:

"Bill Miller of Legg Mason Capital Management delivered this good-natured zinger: How could Chanos still be in business when he's betting against some of the same names that pushed Miller's returns above the S&P's for more than a decade?"

[B]

I believe Chanos' response to this (at some previous event where Bill Miller made the same comment) was that he was short those stocks at different times from when Miller was long them.

Damn this CFA stuff is driving me nuts.

[Amit Chokshi]

Bill Miller is one of the most overrated fund managers around. As far as value guys go I'll take Mason Hawkins, Marty Whitman, and many more before Miller. Miller is a beta guy in my mind, rides higher beta names during bull markets.

There's some interesting stuff with Fairfax, Chanos is short Fairfax but other smart guys like Mohnish Pabrai have been long that co for a while. I believe Chanos has been short Fairfax since 2004 or 2005. Chanos probably looked stupid in regards to shorting Leapfrog until it cratered as well.

[Alex]

I'd be curious to know what Chanos' long term performance record is. Since he's not making any macro calls on stocks, I wonder how his average short pick has done because not all his picks are Enron's. Say what you want about Miller (and I would never buy some of the stocks that he's bought) but you can't argue with his performance.

B:

When you're done with all your studying, make sure to reread your entire ethics book again. Seriously.

[Amit Chokshi]

I don't think you'd look at his "average" short pick to evaluate performance, you wouldn't evaluate pabrai, or greenblatt or even miller based on their average pick, it's the magnitude of their winners as opposed to just frequency.

Chanos went out on his own in 1985, he's not some hack like David Rocker either, and I think I heard on Bloomberg once but can't recall that he had an annualized performance of abotu 11% per year. If i'm right that's incredibly strong performance considering he operated in the longest and strongest bull market (82-00) on record and basically reversed the average market performance.

Kynikos operates a long/short fund as well too, so he doesn't do short only although that's his main flagship fund.

[Alex]

I understand what you're saying. We're just arguing over semantics. I'm not trying to insinuate that Chanos is a horrible or lucky investor. All I was getting at was trying to figure out how most of his picks do and if his long term performance is 11% a year, that is indeed impressive. And I would also argue that Greenblatt and Pabrai's average picks do pretty well.

Pabrai was on CNBC today and gave a great interview.

http://www.cnbc.com/id/15840232?
video=347118421

[David]

Thanks Alex, for that link. It was interesting to get a glimpse of Pabrai, an investor who I have been hearing about lately but know little about.

Since I'm on the subject, you guys might want to check in on the Financial Sense Newshour as he's scheduled to be an upcoming guest interview.

http://www.netcastdaily.com/schedule.htm