World Beta Blog

I love the new feature on AlphaClone that lets an investor view what fund has placed the biggest bet on a stock (as defined by % of their portfolio in the stock).  Who won in the recent BIDU and DNDN stock jumps?

Kleinheinz and S.A.C.

Kleinheinz Is an example of a fund most investors have never heard of.  Their firm is a Fort Worth, TX based hedge fund founded by John B. Kleinheinz in 1996. The firm has a global value oriented investment approach and their top 10 position clone has beaten the market by over 20% a year since 2000.  Top positions today include AAPL RIMM and LUKOV.

Below is an excerpt of a full interview from Hedge Fund News:

After graduating from Stanford University in 1984, John Kleinheinz started his career as an investment banker doing corporate finance and mergers and acquisitions work for Nomura Securities and Merrill Lynch in Tokyo, New York and London. In 1993, he became the second principal of San Antonio Capital Management, a hedge fund management company started in 1990 by Dana McGinnis. In February 1996, he hung his own shingle in Fort Worth where he launched the Global Undervalued Securities Fund, L.P. By the end of 1996, the fund was up 130% and had $25 million in capital. Since then, John¿s record has been nothing short of remarkable, multiplying the original dollar invested by a factor of more than 15 in 8 years. As the name indicates, the Global Undervalued Securities Fund focuses on value situations on a global basis. Over the years, the fund has shifted its focus to countries or industry sectors as varied as Russian equities, internet stocks, Japanese equities, healthcare stocks and emerging market debt. John’s conviction style of investing is not for the faint of heart, as he has occasionally suffered significant drawdowns. However, on a calendar year basis, he lost less than 4% in his only down year (2000). John has paid careful attention to matching his investor base with his investment style and limiting the amount of capital managed by closing to new investors (the fund is currently closed). Presently, he manages $750 million, of which half has come from Texas-based investors.

I’ll be in Washington D.C. today and tomorrow.

Drop me a line if you want to meetup!

We just unveiled an awesome new feature on AlphaClone that lets the user input a stock and find out what fund has the most portfolio exposure to that stock. For example, what fund has the highest exposure to highflier Apple (AAPL) ?  Answer:  Coatue at 17%.

What fund has the most exposure to an in-the-news stock like Hertz (HTZ) today?  Answer: Berkowitz’s Fairholme at 7%?

Let me know what you think!

I think kaChing is making the right changes, and I think this launch is pretty interesting.  Would like to hear what the RIA readers on WB think (investors chime in too!)

https://pro.kaching.com/

In totally unrelated news, body pillow cost disparity by gender – wondering why the boy http://bit.ly/cto5bf costs 4x as much as the girl http://bit.ly/bbQPmA? (HT: Sea)

A good read here from The New Yorker.

Amazon has an interesting model with their Encore program where they find authors with the highest amount of user reviews relative to books sold.  They republish or get them to put out new books.  Seems like a fantastic idea if you were a publisher looking for authors to target.

sees a 40% correction coming.

But is he just the man who cries wolf?

Ok, the people have spoken – Cambria QR will go out once a week (instead of daily) with what I am reading (probably Sunday?).

Check out the first email yesterday for a link to my new paper: Relative Strength Strategies for Investing.

Abstract:
The purpose of this paper is to present simple quantitative methods that improve risk-adjusted returns for investing in US equity sectors and global asset class portfolios. A relative strength model is tested on the French-Fama US equity sector data back to the 1920s that results in increased absolute returns with equity-like risk. The relative strength portfolios outperform the buy and hold benchmark in approximately 70% of all years and returns are persistent across time. The addition of a trend-following parameter to dynamically hedge the portfolio decreases both volatility and drawdown. The relative strength model is then tested across a portfolio of global asset classes with supporting results.

Or, perhaps if the article was on The Onion.

John Meriwether to launch third hedge fund.  In related news, Victor Niederhoffer is the co-manager.

I’m trying to get educated on Pension Funds.  What are the best reads here, in print or online?

I’ve ordered:

Optimizing the Aging, Retirement, and Pensions Dilemma

While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis

US Pension Reform: Lessons from Other Countries

What else?

The Trillion Dollar Gap

An Options Pricing Method for Calculating the Market Price of Public Sector Pension Liabilities

Watson Wyatt Pension 100

The Liabilities and Risks of State-Sponsored Pension Plans (summary here)

Lotsa chatter going on lately on pensions, endowments, and how they manage their money.  I’m writing a paper (in a long list of papers that will come out at some point) on the topic soon.

Going for Broke - Stanford on CalPERS

CalPERS Responds

Why the Yale Model Doesn’t Work for Everybody – Fox

Singapore’s Lesson from Yale Model - Tett