Unstructured Finance

By Matthew Goldstein

With money managers increasingly falling in love with their own voices and so many willing to give them a platform to air their thoughts, I’ve long thought it would be good if someone could come up with a Volubility Index that measured performance against the number of times someone was quoted or made some stock, bond, or market prediction.

It won’t be me because I’m not enough of a math geek or algo genius to even think about how to put something like that together–but it would be interesting to see the results. And given this year’s big surge in money managers spouting off–what with the Ackman-Ichan blood feud over Herbalife and and Einhorn trying to be ever so clever in trying to stop the slide in Apple shares with his iPrefers share class dividend proposal–may be it just will happen.

Anyway, the latest issue of Businessweek with its cover story on David Einhorn and the failure of the “Einhorn effect” to work its magic on Apple’s stock got me thinking again about the Volubility Index. The BW story is a long one and chronicles Einhorn’s long history of driving down the price of stocks he is shorting, but notes his plan to get Apple to unlock its big pile of cash is having limited impact on the stock–even after the Greenlight Capital manager held an unusual press conference to discuss his idea.

Personally, I don’t think it’s much of surprise that the Einhorn effect hasn’t had much impact on Apple. It’s hard for a manager to move a big cap stock like Apple through activism and it’s far easier to do that on the short side–especially with a less widely held stock like Green Mountain Coffee Roasters or for that matter Herbalife, which Ackman caused to plunge late last year with his big short thesis. For more on the trouble with moving big cap stocks, look at Ackman’s trouble with calls to shake up Target a few years back.

Carson Block’s Muddy Waters outfit has gotten a lot of early attention for its short side attacks on Chinese companies that question the accounting practices at those companies. But one short seller told me a lot of the early companies Block’s firm wrote about like Sino Forest were ripe for the picking because no one was really paying much attention.

By Matthew Goldstein

Move over Steve Cohen. The trader who is killing it at Cohen’s $14 billion SAC Capital Advisors this year is Gabriel Plotkin.

The portfolio manager, who specializes in consumer products and the gaming and lodging industry, is one of the top producers this year at Cohen’s hedge fund, say several people familiar with the Stamford, Conn. hedge fund. Plotkin, who joined SAC Capital in late 2006 from North Sound Capital, is emerging as on Cohen’s most reliable money men.

At SAC Capital, where most portfolio managers run books that range from as little as $250 million to $500 million, Plotkin manages one of the largest. His team of half-dozen traders and analysts manages about $1.2 billion of the firm’s money, say sources.

By Matthew Goldstein

These days, all anyone wants to talk about with David Einhorn is his tentative $200 million investment in the New York Mets. But baseball may not be the hedge fund manager’s only interest in Queens–the New York City borough where the Mets play their home games.

A person familiar with the hedge fund industry says a secured facility in Queens is where Einhorn’s Greenlight Capital stores some of the gold bullion it has invested in. An Einhorn spokesman declined to comment on the speculation about the location of the hedge fund’s so-called physical gold.

Greenlight began investing in gold bars in its main flagship fund in 2009. Last year, Einhorn launched a dedicated gold-only fund for investors wanting a more concentrated exposure to the precious metal. As of March 30, this dedicated gold fund had raised about $556 million from 130 investors. In all, Greenlight now manages about $7.8 billion.

By Matthew Goldstein

David Einhorn’s decision to plunk $200 million on the cash-strapped NY Mets could be a bullish development for investors holding the bonds to finance the baseball team’s new stadium.

At last look, most of the bonds that were sold in 2006 to finance the construction of Citi Fields were selling for between 79 cents and 85 cents on the dollar. The distressed price for the $547 million bond issuance is a reflection of the dire financial situation the Mets are in and the reason principal owner Fred Wilpon is selling a big minority stake to Einhorn.

But if Major League Baseball approves the deal with the Greenlight Capital hedge fund manager, it could boost the value of those stadium bonds.