Hedge fund datapoint of the day
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From Jesse Eisinger’s profile of Bill Ackman:
In 2007, he set up a special fund to invest in a single stock in a highly leveraged way. In a sign of how frothy the markets were, he raised $2 billion from start to finish in a week, about two-thirds of which came from other hedge funds. Investors knew the outlines of the investment but not that it would be in Target.
I can understand investors buying into a single-stock fund because they’re convinced about the thesis behind it. But raising $2 billion for a single-stock fund in one week, without revealing what the stock in question actually is? Yikes. Whatever sympathy I had for Ackman’s investors in PSIV has now completely disappeared.
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Plus ca change …
http://epicureandealmaker.blogspot.com/2 008/12/plus-change.html
The supply of idiots in the investor population seems to remain constant over time. Perhaps that is an axiom we can use to construct a new and improved Ridiculous Markets Hypothesis.
“a company for carrying on an undertaking of
great advantage, but no one to know what it is”
Some things truely never change.
Ha. I post my comment, and then I follow EDM’s link, only to discover that he had _precisely_ the same thought.