2017 hedge fund contest

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sat Apr 01, 2017 10:37 pm

Here are the standings as of the end of the first quarter:

1. Better Lucky Than Good, Tanelorn 75.82%
2. Opulent Hammer Fund, nmanieri 31.45%
3. The Ryzen Fund, b42 28.53%
4. Ladies First, LadyGeek 24.86%
5. Fortunato and the Amontillado Hedge Fund, Water 14.72%


Having mentioned most of the leaders, I wanted to congratulate Water and his Fortunato and the Amontillado Hedge Fund for their recent rise in the ranks. As of the end of Q1, his investors are up nearly 15% and considering a celebratory drink while fairing a bit better than their namesake Fortunato. Two notable short positions have been recent winners for the fund - Fairmont Santrol (FMSA), a frack sand company that saw a reversal of recent fortunes as oil prices fell this month signally weaker demand for their commodity production linked product (now -38%, good for a short) and WINS, a sketchy Chinese lending business that had over doubled earlier this year to very loftly levels but crashed in the last two days as two articles raised more questions than answers about their seemingly non-existent business (now -25%, good for a short, down from +50% just two days ago).

Interestingly, one short seller used a Freedom of Information Act request to inquire into the SEC's records on WINS, and while they were denied, the disclosure of the reason ("disclosure of the requested information may hurt ongoing enforcement actions") basically confirms the company is under serious regulatory scrutiny. They may also have fraudulently convinced Russell to add them to the major small cap index by claiming an office in NYC was their headquarters even though no one is answering the phone there and all the business, such as it is, seems to be done in China (non-US-based businesses are typically not eligible for the Russell 2000 index of small to mid sized US stocks). An effort by an insider to sell a majority stake in WINS for a mere 1/10 of its market price(!) also raised questions as to the market valuation, and even that seems to have hit a stumbling block as the Hong Kong based potential buyer is facing regulatory scrutiny there for their past business dealings. I expect we have not seen the end of the WINS saga, and Fortunato fund investors may yet see further gains on their short position.

current standings - 2017 hedge fund contest

Best of luck to all for the coming quarter.

Mudpuppy
Posts: 5427
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: 2017 hedge fund contest

Post by Mudpuppy » Sun Apr 02, 2017 2:04 pm

Let's not forget about the bottom of the standings at the end of the first quarter:

Code: Select all

Death Knell Fund          camper       -20.19%
Anti- /r/Investing Fund   Bondman      -20.86%
Tuesday's Not Forever     JiveTurkey   -37.96%

JiveTurkey's theme of longing Tuesdays and shorting Infinities is paying off in the race to the bottom, as both of the shorts have gone long and one of the longs has gone short.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun Apr 02, 2017 5:23 pm

Yes, the short Sears crowd is on the outs with SHLD stock rallying to a 20% gain for the year, showing continued high volatility. Recently insiders including the CEO Eddie Lampert and major stakeholder Bruce Berkowitz added to their stock holdings in the past week and drove up the price.

Emeralds
Posts: 23
Joined: Sat Oct 05, 2013 8:41 pm

Re: 2017 hedge fund contest

Post by Emeralds » Thu Apr 06, 2017 1:00 pm

Liquidate my long position in SDRL please

NeXtGen Partners

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Thu Apr 06, 2017 9:24 pm

Emeralds wrote:Liquidate my long position in SDRL please

NeXtGen Partners

Done at today's close, $0.70. It's hard to take an 80% loss, but FWIW I think you probably made the right choice. It's looking more and more like a bankruptcy or restructuring is in the cards for them, and the equity holders will be lucky to get much if anything if it goes that way.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sat Apr 08, 2017 9:22 pm

As the first week of the new quarter draws to a close, I wanted to recognize several new accomplishments among our contestants.

LadyGeek's Ladies First has reached a new high, after making the top of the rankings list about a month ago. Her two holdings have held up well as other high fliers have come and gone, leaving her now in 2nd place and up 26% for the year. Her picks are about the same prices as they were when she made 4th place, showing that sometimes consistency and not losing money can indeed be a winning approach.

Water's Fortunato fund, mentioned above in the Q1 recap, has risen to 4th place, now up 18% for the year. The good news for his WINS short has continued to roll in, and their stock is now down 50% for the year. Just in the past week, Russell announced the firm would likely no longer be eligible for the Russell 2000 given their ties primarily to China rather than the US, and one of the two lead executives resigned most of his responsibilities, including his position co-CEO. Not exactly a vote of confidence.

Special congratulations are due to inbox788 and his Charge My Car fund, a new entrant to the top ranks and now in 5th place. By betting on an electric car revolution with controversial picks like Tesla and shorting the stodgy old car makers (Ford, GM), his investors have been rewarded with a solid 17% return. Some drivers of his fund's success were recent 20-25% gains in in long picks Tesla (TSLA) and FMC Corp (FMC). The former recently secured a 5% strategic investment from a major Chinese company, showing both a vote of confidence in the stock (needed to continue to fund their expansion and road to profitability) and suggesting potential access to valuable Chinese markets. The latter, FMC Corp, is a major lithium supplier and has seen strong demand for electric car batteries, and has also benefited in their agricultural chemicals business areas from increasing consolidation in that market.

current standings - 2017 hedge fund contest

As a side note, inbox788's fund is the sole contestant who is in winning on all 6 of his picks. Although not everyone picked a full slate of 6 possible entries, the fact that he has picked 3 long winners and 3 short winners can hardly be due to chance alone - just ask him ;).

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sat Apr 22, 2017 12:44 pm

Revisiting the bottom of the rankings, the bottom five funds currently have two things in common as a group - either long Norovax (NVAX), or short Sears (SHLD). Norovax is a failed biotech vaccine company which claimed a last place victim in the 2016 contest as well (-85% for 2016) and is down 40% so far this year. Sears has had plenty of bad things written about it, but at the end of the day if the big insiders are willing to buy more, as they have recently, the stock will go up in the short term, regardless of the longer term business prospects. Sears, having been down 40% during the start of the year, is now up 40% instead (and hence bad for those who were short the stock).

trueblueky
Posts: 1179
Joined: Tue May 27, 2014 3:50 pm

Re: 2017 hedge fund contest

Post by trueblueky » Sat Apr 22, 2017 2:06 pm

Tanelorn wrote:As a side note, inbox788's fund is the sole contestant who is in winning on all 6 of his picks. Although not everyone picked a full slate of 6 possible entries, the fact that he has picked 3 long winners and 3 short winners can hardly be due to chance alone - just ask him ;).
65 entrants. If the odds are a coin flip on any individual stock, then the chance of being right six times = 1/2^6 = 1/32.

Not every entrant had six selections. Still, not surprising that one had six right.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sat Apr 22, 2017 3:47 pm

trueblueky wrote:65 entrants. If the odds are a coin flip on any individual stock, then the chance of being right six times = 1/2^6 = 1/32.

Not every entrant had six selections. Still, not surprising that one had six right.
We might have to revoke your math degree there, trueblueky. 2^6 is 64, and we have 28 entries with a full slate (and 64 in total, the top line is the header). My math says the chances of at least one fund having all winners given a 50% chance for each stock and independent stocks is 1-(1-0.5^6)^28 = 36% chance of 1+ perfect record(s). Not too likely, but not that unlikely. With 64 people guessing a full 6 stocks each, the chance of at least one perfect rises to 64%.

Surely the odds would be higher with such an esteemed group of expert stock pickers making the picks ;).

trueblueky
Posts: 1179
Joined: Tue May 27, 2014 3:50 pm

Re: 2017 hedge fund contest

Post by trueblueky » Sun Apr 23, 2017 3:56 pm

Tanelorn wrote:
trueblueky wrote:65 entrants. If the odds are a coin flip on any individual stock, then the chance of being right six times = 1/2^6 = 1/32.

Not every entrant had six selections. Still, not surprising that one had six right.
We might have to revoke your math degree there, trueblueky. 2^6 is 64, and we have 28 entries with a full slate (and 64 in total, the top line is the header). My math says the chances of at least one fund having all winners given a 50% chance for each stock and independent stocks is 1-(1-0.5^6)^28 = 36% chance of 1+ perfect record(s). Not too likely, but not that unlikely. With 64 people guessing a full 6 stocks each, the chance of at least one perfect rises to 64%.

Surely the odds would be higher with such an esteemed group of expert stock pickers making the picks ;).
You're right. I should have used both hands. Thanx.

inbox788
Posts: 4142
Joined: Thu Mar 15, 2012 5:24 pm

Re: 2017 hedge fund contest

Post by inbox788 » Sun Apr 23, 2017 4:59 pm

Tanelorn wrote:We might have to revoke your math degree there, trueblueky. 2^6 is 64, and we have 28 entries with a full slate (and 64 in total, the top line is the header). My math says the chances of at least one fund having all winners given a 50% chance for each stock and independent stocks is 1-(1-0.5^6)^28 = 36% chance of 1+ perfect record(s). Not too likely, but not that unlikely. With 64 people guessing a full 6 stocks each, the chance of at least one perfect rises to 64%.

Surely the odds would be higher with such an esteemed group of expert stock pickers making the picks ;).
I won't check your math here, not that you would want me to, since P&S isn't my forte. Just wanted to point out my picks are anything but independent. The thesis is simple, Tesla is leading the charge with electric cars and lithium batteries, so along with lithium producers, are going up. ICE auto producers will suffer and so will gas consumption. I'm 100% convinced this will happen, but don't think it's a 1 year event, so the choice to pick these now was just a whim. I'm not invested in any of these (but have looked into it lightly), and my only concentration is a small remnant position in FOCPX that is overweight in TSLA and I'm about to abandon it.
TOP TEN HOLDINGS
Apple, Inc. $1,300,503,606 9.4%
Tesla, Inc. $1,099,606,264 7.9%
Amazon.com, Inc. $716,431,672 5.2%
Timing is everything, and I had considered placing a bet last February when TSLA was down to 150, which would have doubled in a little over a year. But it would have been a small bet and I wound up not doing it. It was a very short opportunity window, and chances are I would have bailed long before it reached 300. The real good or lucky market timers were the ones that bet on TSLA in 2013 going from 40 to 200 (500% over 1 year vs 50% over 3+ years). Beyond that, the jury is still out despite the recent outperformance (compare TSLA to AMZN last 1-3 years).

FWIW, I made a small technology bet around Y2k on OLED displays (Universal Display Corporation). https://www.google.com/finance?q=oled I was 100% correct, but a decade too early. I didn't hold on to that one either, but even if I did, divided out by a decade, the returns wouldn't have been that impressive.

IMO, picking things on the short side is more challenging, especially when the market is up. So, while I do believe TSLA and the lithium miners are up because of growth prospects, I think GM and F are down simply because of a car business cycle and nothing to do with electric cars. (independent or dependent? you decide) And with XOM, I think it's just a continuation of low volatile oil prices. And TSLA vs F/GM should have negative correlation once TSLA sales become significant, but XOM isn't that simple. Lower oil and fuel prices may hurt XOM, but cheap fuel works against alternative fuels. So on the long side, I'd chalk up the results to skill and on the short side it's luck. Or not.

BTW, I know nothing about lithium. The choice of lithium producers came from this article around the date of the picks:
https://www.fool.com/investing/2016/10/ ... o-buy.aspx

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun Apr 23, 2017 6:29 pm

inbox788 wrote:
Tanelorn wrote:We might have to revoke your math degree there, trueblueky. 2^6 is 64, and we have 28 entries with a full slate (and 64 in total, the top line is the header). My math says the chances of at least one fund having all winners given a 50% chance for each stock and independent stocks is 1-(1-0.5^6)^28 = 36% chance of 1+ perfect record(s). Not too likely, but not that unlikely. With 64 people guessing a full 6 stocks each, the chance of at least one perfect rises to 64%.

Surely the odds would be higher with such an esteemed group of expert stock pickers making the picks ;).
I won't check your math here, not that you would want me to, since P&S isn't my forte. Just wanted to point out my picks are anything but independent. The thesis is simple, Tesla is leading the charge with electric cars and lithium batteries, so along with lithium producers, are going up. ICE auto producers will suffer and so will gas consumption. I'm 100% convinced this will happen, but don't think it's a 1 year event, so the choice to pick these now was just a whim. I'm not invested in any of these (but have looked into it lightly), and my only concentration is a small remnant position in FOCPX that is overweight in TSLA and I'm about to abandon it.
Thanks for the reply, inbox. Probability is not my forte either, but I can manage the basics. I agree the stock picks aren't independent - the math is just easier that way so it's a rough approximation. I expect all long picks to have a decent correlation to the overall equity market, but of course short picks will have a similar negative correlation. Maybe these more or less offset, maybe not. I once knew how to create arrays of correlated random variables, but that's been a long time and I sure wouldn't do it for fun.
Timing is everything, and I had considered placing a bet last February when TSLA was down to 150, which would have doubled in a little over a year. But it would have been a small bet and I wound up not doing it. It was a very short opportunity window, and chances are I would have bailed long before it reached 300. The real good or lucky market timers were the ones that bet on TSLA in 2013 going from 40 to 200 (500% over 1 year vs 50% over 3+ years). Beyond that, the jury is still out despite the recent outperformance (compare TSLA to AMZN last 1-3 years).

FWIW, I made a small technology bet around Y2k on OLED displays (Universal Display Corporation). https://www.google.com/finance?q=oled I was 100% correct, but a decade too early. I didn't hold on to that one either, but even if I did, divided out by a decade, the returns wouldn't have been that impressive.
Yes, Tesla has been a very volatile stock and anyone who could time it reliably would no doubt be retired and crazy rich at this point. That's too hard for me and nearly everyone I expect.
So, while I do believe TSLA and the lithium miners are up because of growth prospects, I think GM and F are down simply because of a car business cycle and nothing to do with electric cars. (independent or dependent? you decide) And with XOM, I think it's just a continuation of low volatile oil prices. And TSLA vs F/GM should have negative correlation once TSLA sales become significant, but XOM isn't that simple. Lower oil and fuel prices may hurt XOM, but cheap fuel works against alternative fuels. So on the long side, I'd chalk up the results to skill and on the short side it's luck. Or not.

BTW, I know nothing about lithium. The choice of lithium producers came from this article around the date of the picks:
https://www.fool.com/investing/2016/10/ ... o-buy.aspx
Nice to hear a bit of background on your fund choices.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun Apr 23, 2017 6:58 pm

IMO, picking things on the short side is more challenging, especially when the market is up.
I actually disagree with this, and thought it might be a good time to update the alternative diversified short basket I proposed in my original entry. Remember that the overall market is up 3% YTD, so presumably it's not been a favorable time for short sellers.
Tanelorn wrote:Tanelorn Capital: Better Lucky Than Good
Our concentrated portfolios are designed to debunk that myth that short selling is risky and remind potential investors that no matter how cheap a stock is, there is always 100% to be made on the way to zero.

...we also offer a more diversified short-bias alternative portfolio, in case the concentrated one above is for any reason found unsuitable:

Short:
ERN - Erin Energy Corp
WATT - Energous Corp
WINS - Wins Finance Holdings
Here are the current results for this year's short basket. WINS has been the big winner at -70%, as has been discussed a fair bit (it was a short pick of several funds this year). The other picks are doing fairly well also:

Code: Select all

Alternative portfolio
Initial prices (as of 1/6/17 close)
ERN 3.15
WATT 17.42
WINS 193.56

Closing prices (as of 4/21/17 close)
ERN 2.00
WATT 14.57
WINS 55.15

ERN -36.51%
WATT -16.36%
WINS -71.51%
Average -41.46% 
41% would be in first place currently in place of my actual fund pick, although not by as much a margin. Last year a similar approach made almost 70% in the 2016 contest. Of course the year isn't over and I expect all of these still have farther to fall, although it's hard to say if they would do as well as last year's 70%. For 2016 those were some really terrible stocks - all three got delisted and two went bankrupt by the end of the contest!

Mudpuppy
Posts: 5427
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: 2017 hedge fund contest

Post by Mudpuppy » Mon Apr 24, 2017 12:15 am

Tanelorn wrote:...we also offer a more diversified short-bias alternative portfolio, in case the concentrated one above is for any reason found unsuitable:

Short:
ERN - Erin Energy Corp
WATT - Energous Corp
WINS - Wins Finance Holdings
I just noticed this reads as "earn what wins". Neat.

User avatar
whodidntante
Posts: 2198
Joined: Thu Jan 21, 2016 11:11 pm

Re: 2017 hedge fund contest

Post by whodidntante » Mon Apr 24, 2017 10:16 pm

I'm standing behind my decision to short Sears. It's a broken company and that ship will go down. The stock has been temporarily propped up by people who enjoy losing money.

goblue100
Posts: 340
Joined: Sun Dec 01, 2013 10:31 am

Re: 2017 hedge fund contest

Post by goblue100 » Thu Apr 27, 2017 10:26 am

Can you close out my short in X (US Steel)?

Thanks
Some people are immune to good advice. - Saul Goodman

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Fri Apr 28, 2017 6:55 am

goblue100 wrote:Can you close out my short in X (US Steel)?

Thanks
US Steel closed at $23.24 on 4/27, the day of your request. I'll update the spreadsheet later today to reflect your trade. (edit: done)

current standings - 2017 hedge fund contest

GoldenFinch
Posts: 1351
Joined: Mon Nov 10, 2014 11:34 pm

Re: 2017 hedge fund contest

Post by GoldenFinch » Tue May 09, 2017 4:54 pm

Tanelorn what happened to your hedge fund? :shock:

Miriam2
Posts: 1747
Joined: Fri Nov 14, 2014 11:51 am

Re: 2017 hedge fund contest

Post by Miriam2 » Tue May 09, 2017 4:59 pm

GoldenFinch wrote:Tanelorn what happened to your hedge fund? :shock:
Yes, I wondered about that, Tanelorn was always #1 in the standings - which I also always wondered about :wink:

aristotelian
Posts: 3009
Joined: Wed Jan 11, 2017 8:05 pm

Re: 2017 hedge fund contest

Post by aristotelian » Tue May 09, 2017 5:02 pm

Is it too late to join this? I wouldn't mind playing catch-up.

GoldenFinch
Posts: 1351
Joined: Mon Nov 10, 2014 11:34 pm

Re: 2017 hedge fund contest

Post by GoldenFinch » Tue May 09, 2017 5:20 pm

aristotelian wrote:Is it too late to join this? I wouldn't mind playing catch-up.
Too late, but join in first weeks of January 2018. :happy

User avatar
LadyGeek
Site Admin
Posts: 41053
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 2017 hedge fund contest

Post by LadyGeek » Tue May 09, 2017 5:54 pm

GoldenFinch wrote:Tanelorn what happened to your hedge fund? :shock:
It's been merged: Altimmune | Press Releases

Just prior to the merger, the stock was reverse split 1-for-10.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Tue May 09, 2017 10:20 pm

GoldenFinch wrote:Tanelorn what happened to your hedge fund? :shock:
Thank you for your concern. We at Tanelorn Capital are more than familiar with accounting irregularities, both at our brokers and at the companies we short(!). There was that time we had a -$1B margin call when our broker used some bad premarket prices to value our short at $200k/share (the maximum price for most stocks), rather the prior day's closing price of $10. This seemed unreasonable to us since no shares had traded that morning at that price (or any other price), but it still caused some headaches until the market opened and then everything was fine. But those are stories for another day...

In this particular case, our apparent drop from +75% to -50% was just such a glitch. LadyGeek has the correct explanation - the stock did what is called a "reverse merger", where a larger company is merged into a smaller one. In this case, Altimmune, a previously private company, merged into the old PharmAthene (PIP) public company. Under the merger, the Altimmune shareholders had a majority of the new shares, so they assumed control of the combined company, and they got a new stock ticker (ALT) to reflect their new name but kept the old exchange listing. This technique was a popular way for fraudulent Chinese companies to buy their way onto Nasdaq without meeting the more strict exchange listing requirements applies to new applicants a few years back. We have no belief that is the happening in this case, but we're still short so if there's any fraud, hopefully it will be exposed before the end of the year :).

As part of this particular merger, they also reverse split the PIP-now-ALT stock by 10x to get themselves back over $1 to meet that exchange requirement. It was this reverse split that caused the stock price to increase by ~10x, from $0.65 to $6.50ish, and this made it look like the short position had large losses. While the stock has been volatile in the days since it's recent new identity was assumed last week, it is currently down a little from before to just over $6/share currently (equivalent to $0.60 before).

I updated the spreadsheet to reflect the new company ticker and split-adjusted original short price by 10x for the reverse split.

current standings - 2017 hedge fund contest
Last edited by Tanelorn on Wed May 10, 2017 8:02 am, edited 2 times in total.

GoldenFinch
Posts: 1351
Joined: Mon Nov 10, 2014 11:34 pm

Re: 2017 hedge fund contest

Post by GoldenFinch » Wed May 10, 2017 6:20 am

^^^Thank you Tanelorn and LadyGeek for the explanation. I knew there was a DETAILED story behind this dramatic drop and was looking forward to learning something new. :happy

User avatar
stickman731
Posts: 244
Joined: Sun Jan 01, 2012 10:42 am
Location: New Jersey

Re: 2017 hedge fund contest

Post by stickman731 » Mon May 15, 2017 9:23 am

My short ASH had a tax free spin-off of VVV and the share price on ASH was adjusted. I think adjusted price need to place in the spreadsheet.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Mon May 15, 2017 9:38 pm

stickman731 wrote:My short ASH had a tax free spin-off of VVV and the share price on ASH was adjusted. I think adjusted price need to place in the spreadsheet.
Thanks for the note, stickman. Indeed, the spinoff of VVV from ASH resulted in splitting the value of the stock roughly in half, with the original ASH just before the event closing at $121.75 and it's $62.93 as of today's close. ASH shareholders also got roughly 2.75 shares of VVV for each old ASH share, and those were worth $22.65 each as of yesterday's close or $62.18 worth of stock VVV stock in total. As such, the total was up 2-3% for the day ($125 vs $122), not -48% that the pure ASH price reflects. Here are some details on the transaction:

https://finance.yahoo.com/news/valvolin ... 00745.html
http://www.cboe.com/publish/TTStockSM/17-281.pdf

Let me see how spinoffs were treated in the past and I'll make the appropriate adjustment. Given it's an all stock deal, I'm inclined to make the outcome the equivalent of taking the VVV spinoff shares, closing that position, and reinvesting back in the original ASH, with everything done as of the closing prices just prior to ex-spinoff date. sound ok?

User avatar
stickman731
Posts: 244
Joined: Sun Jan 01, 2012 10:42 am
Location: New Jersey

Re: 2017 hedge fund contest

Post by stickman731 » Tue May 16, 2017 5:36 am

Tanelorn wrote:
Let me see how spinoffs were treated in the past and I'll make the appropriate adjustment. Given it's an all stock deal, I'm inclined to make the outcome the equivalent of taking the VVV spinoff shares, closing that position, and reinvesting back in the original ASH, with everything done as of the closing prices just prior to ex-spinoff date. sound ok?
Thank you for the details as I have watching ASH for the VVV spin-off. I think it is a cash cow - when have you ever had a price decrease at an oil change retailers - oil goes up => raise the price, oil goes down => keep the profits.


I do not know how spin-offs were treated in the past but your logic to reinvest back into ASH is sound and acceptable.

Independent George
Posts: 175
Joined: Wed Feb 17, 2016 12:13 pm

Re: 2017 hedge fund contest

Post by Independent George » Tue May 16, 2017 2:43 pm

Is there a prize for the best fund name? Because I'm really enjoying some of these...

User avatar
StormShadow
Posts: 509
Joined: Thu Feb 09, 2012 6:20 pm

Re: 2017 hedge fund contest

Post by StormShadow » Tue May 16, 2017 10:53 pm

Independent George wrote:Is there a prize for the best fund name? Because I'm really enjoying some of these...
Bragging rights. Can't put a dollar value on that.

Independent George
Posts: 175
Joined: Wed Feb 17, 2016 12:13 pm

Re: 2017 hedge fund contest

Post by Independent George » Wed May 17, 2017 9:02 am

StormShadow wrote:Bragging rights. Can't put a dollar value on that.
"Bragging Rights" would actually be a pretty neat fund name...

Now I'm sad, because I missed the chance to play. I think I'd have gone with, "Yahtzee!". Or, maybe, in honor of my screen name, "The Human Fund (Money for Humans)".

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun May 21, 2017 11:09 pm

Congratulations to Water and his Fortunato and the Amontillado Hedge Fund. Having appeared in the top ranks for some time now, he recently took 2nd place. His winners include a short WINS position, a questionable and highly valued Chinese company, which is down over 80% at this point(!) and FMSA, frack sands company down 50%. On the long side, he has done well with CPSI, a small cap healthcare IT services firm that is now up over 40%, with most of that move coming two weeks ago in early May where they reported unexceptional quarterly earnings but favorable guidance in terms of future revenues, cost cutting, and integration of a recent acquisition. Overall, Fortunato investors are up 29% for the year so far.

Another recent success story is snottypie and his eponymous if seemingly unpalatable fund, Snotty's Slice O' Pie. He recently joined the top ranks at 3rd place with a 28% return and just a hair behind 2nd. Snottypie has no losing positions among his two longs and three shorts, and the worst performing of them is up 18%. On the long side he has the controversial and successful car company Tesla, as well as Chipotle (CMG), a recovery play after the Mexican fast food restaurant saw its stock halved last year in the wake of repeated E. Coli contamination issues. His short side consists entirely of big name mall retailers (Macy's, JC Penney, and Sears), and this has been an excellent call for 2017 where many retailers and their stocks have suffered considerably.

current standings - 2017 hedge fund contest

stickman - on the logistics side, I updated your ASH position for the VVV spinoff as I previously described, roughly a 2x forward split, by dividing the original ASH purchase price by this split ratio. See the data page of the spreadsheet above for the exact calculation of the ratio, ~2.04x, using the 5/12/17 closing prices. Prior contests had not had to address this kind of issue.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Tue May 30, 2017 7:27 am

A quick shout out to jdb and his Unpresidented Opportunity Fund, which recently took 3rd place with his long-only portfolio featuring a trio of "new economy" high fliers. His biggest winner is Tesla, up over 40% so far, a pick perhaps based on his personal and positive experiences with their electric cars. Amazon and Google are also up 20-25%, for average return of 29% year to date. Congrats!

current standings - 2017 hedge fund contest

User avatar
k66
Posts: 406
Joined: Sat Oct 27, 2012 1:36 pm

Re: 2017 hedge fund contest

Post by k66 » Tue May 30, 2017 2:26 pm

Hmmm, I see that my JNS (Janus Capital) has merged with Henderson PLC resulting in a new listing on the NYSE for Janus-Henderson under the ticker "JHG"

News Release

The new JHG seems to be trading in the $30 range but the "closing" price for Janus/JNS from last Friday was in the $14 range (implying a 2-for-1 reverse-split? but cannot find any confirmation of such an arrangement)

JNS

JHG

Assistance with researching this transition would be appreciated!

Thx
LOSER of the Boglehead Contest 2015 | lang may yer lum reek

jdb
Posts: 1224
Joined: Wed Dec 05, 2012 8:21 pm

Re: 2017 hedge fund contest

Post by jdb » Tue May 30, 2017 4:39 pm

Tanelorn wrote:A quick shout out to jdb and his Unpresidented Opportunity Fund, which recently took 3rd place with his long-only portfolio featuring a trio of "new economy" high fliers. His biggest winner is Tesla, up over 40% so far, a pick perhaps based on his personal and positive experiences with their electric cars. Amazon and Google are also up 20-25%, for average return of 29% year to date. Congrats!

current standings - 2017 hedge fund contest
Thanks Tanelorn. My fund manager still follows Peter Lynch advice, invest in what you know. But I agree with Elon, though great company with great products and great future probably over valued. OTOH not sorry to see the shorts squirm. Speaking of shorts, my hat off to you. It is beyond intellectual capacity of my fund manager to figure out how to short stocks but you are the master.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Tue May 30, 2017 6:37 pm

k66 wrote:Hmmm, I see that my JNS (Janus Capital) has merged with Henderson PLC resulting in a new listing on the NYSE for Janus-Henderson under the ticker "JHG"

News Release

The new JHG seems to be trading in the $30 range but the "closing" price for Janus/JNS from last Friday was in the $14 range (implying a 2-for-1 reverse-split? but cannot find any confirmation of such an arrangement)

JNS

JHG

Assistance with researching this transition would be appreciated!

Thx
You're on the right track. The merger was 4.719 old JHG shares for each JNS share, together with a 10:1 reverse split, where 10 JHG old shares were exchanged for 1 new JHG share.

https://www.theocc.com/webapps/infomemo ... %3A10%3A00 (see "background" on page 2)

So the net effect is each 1 original JNS is now equivalent to 0.4719 JHG shares, or a ~2.12x reverse split. See the data page of the contest spreadsheet for the calculations; you are up about 5% on the JNS-now-JHG position.

I will update the spreadsheet shortly. (Edit: fixed)

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Wed May 31, 2017 1:19 am

jdb wrote:Thanks Tanelorn. My fund manager still follows Peter Lynch advice, invest in what you know. But I agree with Elon, though great company with great products and great future probably over valued.
Amazon has been called overvalued and it just broke $1000/share recently. Just because things seem highly priced doesn't mean they won't get higher and possibly do well enough to justify it, either with good business prospects or cultivating investor enthusiasm.
OTOH not sorry to see the shorts squirm. Speaking of shorts, my hat off to you. It is beyond intellectual capacity of my fund manager to figure out how to short stocks but you are the master.
Thanks - I am definitively not a master, but I'm working on it :). Tesla is a very risky stock to short, ala Herbalife or Valeant. I wouldn't want to get involved in those since it's very hard to tell what will happen in the short term given the strong divergent opinions on these kinds of companies, and the long term is a long way away (and hence also hard to see). I am happy that my alternative short basket has been doing well again this year, not quite 50% currently (it's at the bottom of the "data" page). WINS has been a real winner (down over 80%, picked by several other funds this year as well), and I have hopes that ERN will continue to decline as the year goes on.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Mon Jun 12, 2017 5:02 am

The last two weeks have produced quite a few shakeups. It's never a dull moment for hedge funds and individual stock pickers.

Firstly, jdb's Unpresidented Opportunity fund took 2nd place, up from his debut in the top ranks at 3rd a few weeks back. His investors are now up 32%, and that's in spite of the recent pullback in large tech names which comprise the entirety of the fund (GOOG, TSLA, AMZN). Of note, there was a sudden drop on Amazon on Friday afternoon which some have dubbed a "mini flash crash", where the stock suddenly dropped over 5% (more than it was down already) and briefly wiped out $25B+ in market value before mostly recovering. Amazon closed down 3% in line with the Nasdaq selloff, but off the -8% lows where it touched the $920s briefly; AMZN had topped $1000 earlier that week.

Right behind him in 3rd place with a similar 32% gain for the year is snottypie, whose bets on TSLA and against mall retailers have continued to do well in recent weeks, the brief reversal on Friday not withstanding.

Joining the top ranks at 4th with a respectable 29% return is McGilicutty with his fund CRAZY DONKEY HEDGEPIE. His diversified long/short fund has bets spread across many sectors, including long bets on Ulta (cosmetics), Nvidia (computer graphics), and Albemarle (lithium and specialty chemicals). The short side on the other hand is concentrated on bearish views of the oil and gas sector, where Whiting Petroleum (WLL) has been the biggest winner with over a 50% drop, while larger more staid companies like Exxon (XON) are still down but much less. Every one of his six picks is currently up, an impressive accomplishment.

Camper retuned to the top ranks at 5th place with his pure play short against Sears. Another very volatile stock, SHLD is currently down 26% and Death Knell investors up likewise.

The popular short pick, Wins Finance Holdings (WINS) has again proven itself one of the most volatile stocks in the market. After rocketing last year tenfold from $20 to $200 (where our contestants shorted it), it continued upwards to nearly $500 this spring before crashing down to $20 again last month. Those 90% gains for our short sellers, not unlike their 150% losses earlier, turned out to be short lived. In the past week, it skyrocketed again from from $20 to $205 in the space of just a few days on huge trading volume, at which point it was halted by Nasdaq pending further information from the company. It remains halted for several days now, and for background, these can go on for weeks or even longer. If Nasdaq is unsatisfied with their reply, they may face delisting from the exchange, which, if I had to guess, is not out of the question. Russell has them slated for removal from their popular Russell 2000 smallcap index as well, so it looks like we won't see them again in the contest next year.

Best of luck to all!

current standings - 2017 hedge fund contest

honduranhurricane
Posts: 45
Joined: Tue Oct 18, 2016 10:18 pm
Location: boston, ma

Re: 2017 hedge fund contest

Post by honduranhurricane » Sun Jun 25, 2017 7:13 pm

Can we take my short off of WFM,,,ouch!

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Mon Jun 26, 2017 3:27 pm

honduranhurricane wrote:Can we take my short off of WFM,,,ouch!
Done at today's closing price of $42.69.

goblue100
Posts: 340
Joined: Sun Dec 01, 2013 10:31 am

Re: 2017 hedge fund contest

Post by goblue100 » Tue Jun 27, 2017 10:33 am

" In the past week, it skyrocketed again from from $20 to $205 in the space of just a few days on huge trading volume, at which point it was halted by Nasdaq pending further information from the company. It remains halted for several days now, and for background, these can go on for weeks or even longer. If Nasdaq is unsatisfied with their reply, they may face delisting from the exchange, which, if I had to guess, is not out of the question."

I assume a delisting is the same as going to 0 for the purposes of this contest?
Some people are immune to good advice. - Saul Goodman

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Tue Jun 27, 2017 10:37 am

goblue100 wrote:" In the past week, it skyrocketed again from from $20 to $205 in the space of just a few days on huge trading volume, at which point it was halted by Nasdaq pending further information from the company. It remains halted for several days now, and for background, these can go on for weeks or even longer. If Nasdaq is unsatisfied with their reply, they may face delisting from the exchange, which, if I had to guess, is not out of the question."

I assume a delisting is the same as going to 0 for the purposes of this contest?
No. If the stock is delisted from Nasdaq, it will very likely trade "over the counter" (OTC). There will still be a market with prices, trades, etc, just not on one of the big national stock exchanges, and there's no problem getting the OTC quotes for our contest. Until then, the stock will stay valued at it's last closing trade price since that's the most recent data available.

goblue100
Posts: 340
Joined: Sun Dec 01, 2013 10:31 am

Re: 2017 hedge fund contest

Post by goblue100 » Tue Jun 27, 2017 12:14 pm

Fair enough. I was extremely surprised it jumped back to 205. I couldn't imagine who was driving the demand.
Some people are immune to good advice. - Saul Goodman

User avatar
LadyGeek
Site Admin
Posts: 41053
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 2017 hedge fund contest

Post by LadyGeek » Sat Jul 01, 2017 4:02 pm

While we're waiting for the official second quarter analysis, I should remind readers that the hedge fund and Bogleheads' contests are in the wiki: Bogleheads® contests
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun Jul 02, 2017 11:36 pm

Here are the standings as of the end of the second quarter:
1. Better Lucky Than Good, Tanelorn 90.45%
2. The Unpresidented Opportunity Fund, jdb 30.72%
3. Snotty's Slice O' Pie, snottypie 26.56%
4. CRAZY DONKEY HEDGEPIE, McGilicutty 25.99%
5. Charge My Car Fund, inbox788 20.57%
The rankings haven't changed much since my mid June update above. 5th place place was retaken by inbox's Charge my Car Fund (profiled here back in April) after some of the popular short Sears crowd suffered as SHLD stock gained almost 40% off its lows from 2 weeks back. Sears is still down 7% for the year, but that's a big difference from down 30%.

WINS stock was very volatile, falling almost 90% a month or so back and regaining nearly all of that loss (a 9-10 fold increase!) before trading was stopped. The stock remains halted by Nasdaq, and it will have been a full month without trading as of this coming Friday. While merger talks continue between them and a possible Hong Kong buyer, there are no indications if or when it may trade again. In any event, stock won't be around next year as it has officially been removed from the Russell 3000 index earlier this month.

One last observation is that, compared to the Q1 rankings from earlier this year, nearly all of the leading funds have turned over and been replaced with new ones. Good consistent results can be very elusive in this business. Still, if your fund hasn't been in the top ranks, perhaps some good news may yet come your way in the next six months.

current standings - 2017 hedge fund contest

Best of luck to all for the coming quarter!

User avatar
whodidntante
Posts: 2198
Joined: Thu Jan 21, 2016 11:11 pm

Re: 2017 hedge fund contest

Post by whodidntante » Thu Jul 06, 2017 11:35 pm

My hopes rest in strong demand for burritos.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Wed Jul 12, 2017 6:42 pm

paper200 wrote:Billionaire Yacht Fund Ticker MYG
My Yacht Guaranteed

Long: SUPN, IPXL, BREW

Short: SHLD, WINS, ARIA
A quick note that ARIA has been bought out in a merger for $24 in cash.

https://www.takeda.com/newsroom/newsrel ... icals-Inc/

The price had erroneously been reporting as zero for a few days recently, instead of the last trade of $23.99. I guess enough time had passed since the Feb merger that the data sources forgot about the old stock ticker. I adjusted the spreadsheet and it's correct now.

current standings - 2017 hedge fund contest

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Sun Jul 16, 2017 11:41 pm

A quick shout out to stickman731 and his Sticky Wonder Fund. This week, he broke into the top ranks at 4th place and a current annual performance of 25%. That 25% average however belies considerable underlying variance among his portfolio of 3 long and 2 short picks. In fact, he is only up on 2 of his positions, while 3 of his positions have moved against him by 20-40% each - long ACET, short ASH and TSLA have all considerably underperformed.

You might think being wrong on the majority of your picks, and losing 30% on them on average wouldn't be a recipe for a top performing fund. However, those two other stocks, long Chemours (CC) and Universal Display Corp (OLED), are both up almost 110% each for the year(!) and that can make up a lot of ground. Chemours was an ill-timed and out of favor DuPont chemicals spinoff from two years ago that is up almost 10x from its lows last year and 100% for this year so far as the management has executed well and survived the difficult conditions that were established for their separation from DuPont during earlier years with much better business conditions. Universal Display makes lighting components that are used in cell phone screens, tablets, and flat screen TVs and monitors. They have been gaining ground on strong earnings as well as rising expected demand for the OLED market in general now that Apple is planning on using OLED rather than LCD screen technology in their newer phones (OLEDs give much better screen picture quality).

Congrats to stickman and best of luck to all.

current standings - 2017 hedge fund contest

User avatar
whodidntante
Posts: 2198
Joined: Thu Jan 21, 2016 11:11 pm

Re: 2017 hedge fund contest

Post by whodidntante » Tue Jul 18, 2017 10:13 pm

Based on the Chipotle news and for Sears' inability to correctly fail as a business, I hereby exercise my right to limit redemptions from my investors. I shall release you on January 1st, should you still with to sell.

Tanelorn
Posts: 1298
Joined: Thu May 01, 2014 9:35 pm

Re: 2017 hedge fund contest

Post by Tanelorn » Wed Jul 19, 2017 6:47 am

whodidntante wrote:Based on the Chipotle news and for Sears' inability to correctly fail as a business, I hereby exercise my right to limit redemptions from my investors. I shall release you on January 1st, should you still with to sell.
I agree. Gates and lockups are an important way to protect investors from their own bad impulses to time the market - that should be left to professionals such as yourself (and conveniently also protect them from acting on their regret over investing in your fund). It's bad enough that the managers of the Ex-Craftsman Poopman Fund should have to contend with lower management fees from falling asset values and potentially no lucrative 20% performance fee as their fund performance recently slipped into the red (now -1% YTD), but the prospects of having the investors escape paying either going forward by pulling out their money during this period of "temporary volatility" has got to hit the managers squarely in the pocketbook. Those yachts and Hamptons mansions don't just pay for themselves you know.

Chipotle, one of the more successful long picks earlier this year as a recovery play and previously up 30%, has been falling and is now -6% as the restaurant chain suffered yet another contamination issue yesterday, sending investors fleeing the stock as fast as unlucky customers raced to their bathrooms. The other fund position, short Sears, has been volatile but only currently modestly profitable and not enough to offset the losses in Chipotle.

GoldenFinch
Posts: 1351
Joined: Mon Nov 10, 2014 11:34 pm

Re: 2017 hedge fund contest

Post by GoldenFinch » Thu Jul 20, 2017 1:53 pm

Tanelorn, please sell my position in SRPT as of closing price today 7/20. Commonwealth of Buckaroo Dough Holdings has bounced in and out of the top ten and wants to stay there this time. I'm risking that it might tank by the end of the day, but this is a very risky hedge fund causing share holders a lot of anxiety.

Post Reply