The battle for Herbalife (HLF) is heating up once again. QTR Research most recently outlined its short thesis on Herbalife’s stock ahead of a documentary’s release, a movie about Pershing Square Capital manager Bill Ackman’s $1 billion short bet on Herbalife and his drive to expose the company as a pyramid scheme. It looks like the Titanic found its iceberg.
Wins’ stock valuation is a puzzle. Investor Jacob Ma-Weaver, at Cable Car Capital, notes that most of the stock’s gains occurred on tiny volumes of odd-lot trades and end-of-the-day transactions. Some 40% of Wins’ trades on a recent day were for one share apiece. On March 09th 2017, the obscure Chinese financial company, headquartered in New York, trades at $315. Yes $315. That is not a typo. Up +1200%.
Ben Graham, the father of value investing, once said of the stock market, “In the short run, the market is a voting machine but in the long run it is a weighing machine.” To Graham the market was like a popularity contest. Investors “vote” for a stock out of considered enthusiasm for its prospects. Results however are determined in the long run as profits are “weighed” year after year and intrinsic value is revealed.
Investment Outlook from Bill Gross Through the years I’ve accumulated a short list of quotes that express a personal…
Portfolio Manager commentary as of December 31, 2016 regarding small cap investments. Third Avenue is a private investment firm rooted in their collective value-driven investment philosophy. Since their founding in 1986, they have consistently pursued a fundamental, bottom-up approach to deep value and distressed investing–the fund has it’s focus on the company’s balance sheet, the value of its underlying assets, and the discounted price of its securities.
The growth trend has been declining in many mature economies not just since the crisis, but for several decades. This slowdown in growth has led to lower long-term interest rates. The structural causes of this trend of slowing growth is a subject of controversy among specialists. Demographic and technological developments are mentioned, as are the effects of the financial cycle, which may be out of sync with the business cycles. I do not want to pre-empt this ongoing discussion. Instead, I would like to focus on two issues, which in the current context are very relevant from a monetary policy perspective – regardless of the structural causes underlying the weak economic growth.
The International Monetary Fund (IMF) released a report in which it increased its forecast for China’s GDP growth by 0.3 percentage points to 6.5 percent. However, the IMF report also warned that “slow progress in addressing corporate debt” posed a risk to the forecast. China’s claims to be over the worst of its corporate debt problem seem to be wishful thinking. One thing is certain: The debt problem is real; it’s a drag on growth; and policies so far have not gotten rid of it.