In Search of the Perfect Investment

The 2,700-seat Avery Fisher Hall at New York’s Lincoln Center was packed with investors and money managers. On stage were some of the world’s best hedge fund managers, each with 15 minutes to present their best ideas. The attendees paid a minimum of $1,500 — which is what I paid. All the money went to a charity called the Sohn Foundation, which benefits pediatric (child) cancer. I hear they raised a remarkable $50 million yesterday.

A good percentage of last year’s picks made you money. For last year’s winner’s and losers, click here.  If you picked correctly, the picks made you oodles of money. Hence, the conference is growing each year, and it’s why they now have conferences in San Francisco (October 23, 2013) and London (some time in November, click here..

Two things impressed me: The hedge fund manager/presenters had invested their own money into the own recommendations. Second, the sheer amount of research many of the presenters had done. Some had clearly been researching their picks for months.

Reporting on the conference is not easy, since none of the presenters released their PowerPoints and you weren’t meant to take photos of the huge screen.

By the end of it all – – around 6:30 PM — I was exhausted. You can find many of the recommendations in BusinessInsider’s Live Blog. Click here.

I need to mull more on what I heard yesterday. But here is what I’m looking at:

+ TWTC and LVLT — two “alternative carriers.” Internet traffic is exploding. These two will benefit. Someone will buy TWTC, whih has superb management,  and LVLT will expand, if it ever gets its management act together. TWTC is “bond.” LVLT is “a long duration call option,” says Keith Meister of Corvex Management.

+ PG. Bill Ackman devoted his entire and very detailed presentation to this one company. He figured within two years it would be up 60%. Hence an annual IRR on an investment today of 26%.

+ The Australian dollar will come down “and come down hard,” according to the phenomenally successful Stan Druckenmiller, who believes the commodities boom is well and truly over. Sell gold, says Stan.

+ GOOG. Says Druckenmiller, “i can’t imagine a better company than Google — our biggest holding — at 16 times earnings… And by the way, they have no exposure to China” (which most everyone believes is slowing down).

+ OCN is “totally mispriced,” according to Steve Eisman. His estimates: Net income 2012  $181 million, 2013E $607 million, 2014E $740 million.

+ Short Africa Bank. It’s overwhelmingly a lender of unsecured lending. 30% a year in the last few years. It’s 26% above book value… It gets most of its funding from institutions — not deposits. “That funding will cease when the institutions lose faith in the company, as they will,” said David Stemerman.

+ Sell Seagate short, says Jim Chanos. Demand problems. Accounting issues. And the executives are selling their stock.

+ Akamai. Internet traffic is growing 29% a year. These guys are content deliverers. “Base case is a 42% upside in the next couple of years,” according to Cliff Robbins of Blue Harbor Group.

That’s it for now.

Harry Newton who was incredibly impressed with a Norwegian presenter called Tor Olav Troim. He loves oil drilling and transporting LNG (liquified natural gas). More on his recommendations tomorrow.