Robert Minogne - bridger Co founder blue ridge only a handful of HBS grabs entered public markets investing in hos

cohort in 1996 - 2 of 800 in public modern industry only evolved in last ten years BR started in 1996 with $30m with John Griffin started with 30m John Griffin Now HF start ups need approx $200-$300 minim function of regulation long short public equity 90% bottom up What is your edge? no better question? in investing need tom sperate from pack edgen in terms of the seeing something bettrewith a different perecetipn than tan the rest of wall st Polariod - first short was equivenet of google or Facebook now triple didgit mutiples mid 90"s one hour deveiplemnt one hour photo disrupted their product cash flows were declining investing into digital - declining cash flows tarcked down the roll out of one hour labs - when labs opened up polariodlost market share look rescshed edges qulataive reach edged that tune into qunqtaitaive edge shorts are in peiece fads fraouds and failures

failure - overlevred and cash flows are declining POLRAIOD AND EASTMAN KODAK lucky if it levered company value goes it down every year better if mgmt does not see the chahlages issue what do you do every day? ask the equations to managemnet- gets management flustered time can be your friend in shorts then

ir shprts garmin why would you have a stand alone deveice - smart phone intend fads - tough to get right wind is at theta backs, high multiple, can go uplonger emperor has no clothes shorts no real ipo's of last of fad ideas but executed now - pray every night alterentaiev energy could be the next fad..conceived he will make money1000" coy will go to zero short biotech alot= get one wrong but will get 999 right what they are looking for - when ppl need to they need exeposuer but have not done any work research passively but ppl still invest

in EM - not many fauands yet, steam, china, hat of pops to find frauds miniming ppl what exposure -ppl need expsoue to gold and commodities.own land changed their gold mine is a whole in the ground with a liar on top many comapies that wont be able to produce gold

Frauds most fun - but hardest to get right Sarb ox - not a smuch frauds

healthcare - with mat of money from govt- temedous fauns subsenetly haethacre services hard to drive revenue doble digit thereof to grow top line need to push price but cant since medicare does not raise funding much search for ideas who grow top line vut double digits

pathology in the north east in USA 80% of co makes money from one test - when that stops the business will almost ease

baby is born chack abaies headring $20 test

or 125 for check with machine 100% of babsie to 100% test 15% of coy earnings .look for top line growth in the sector - sue factset primary resach use very little wall st research tough would is out to get you

correctlations are high therefoer tough to ake money cant train short sellers pre dispostion very indenepend and do a lot of hard work, be agiant the crowd and have concition are array traits liitle macro economics but via company vistas think the US will do better than what pp think coy's say they could bird back right now - but they don't want to feel idaits if there is a doble dip stock market causl relationship wont hire back to 2007 levels profit magi's can stay strong but unepoelment could stay stuctally here

look at sector which ppl left foe dead looking for ideas in property macro islooking good seed are there for things to get better

russia worked there

Q;s If ecoemcny keep turning - shorts wont workhigly leveraged bad businesses could work if no decline in the cash flows will get out of shorts will cover lost 50% twice in eatsman kodak twice over ten years

newspapers - sow were at 2-3x EBITDA they rallied 300-4000 off bottom

positions - 5% long bif short 3% like deievsifsies short positions never be beggar than 4% of equity for shorts never risk fund on one single deacon;y find enough shorts thinks he will make money in IPO's as shorts VC had to take coy public that is a good place to strat looking for shorts 30 longs an 50 shorts classix

managen risk by iniuation - by tatse like mamma made pasta NPV od stating hedge fun is -ve on AVERAGE CHNACE OF SURVEINF THREE YEARS IS EXRENELEY LOW

Chemisty of ppl is the most improtnat thing in finding a firm need for ppl to get along especially when times are bad need to want to go to war with partners need a couple 1000 m quail ti strat up now dinsivntve to talk shorts saciacaity value - need to borrow shares other wont have the stomach for shorts and will mess up things need to find proproiary ideas - there don't like to talk about them

meeting coy don't shoot good companies and valuation alone doing gods work on the short side we have a position in the company don;t mis repsbernst the themselves

aosmetimes tell coy that they are shorts and try and concise them why they shouldn't short the stock if you come in i will become the largest holder - julian robertson if you were CEO of the company what would you do? ask the questions if the answer is shut it down and run for cash----that is a great short idea

role of ce is cpaital allocation rare with a coy that is deceleing he will move the neele in rigth direction pharma dont earn cocin R&D even tho they look cheap continij got invest at a negative cost of capital new ceo pzier cut r&d by 2bnmaybe things havechnaged never own a coy that thinks it a growth play when it inst never own a biz going from great to good - distaster

Holy grail in distressed investing good company bad capital structure or cyclical company on trough fundemntalasa nd valuation focus on abolsute value - difficult to get your head around when stock has gone uo a lot ataxic city in secular decline sates opening up around jersey and is where customer re from painatace is a virtue is distressed - don't want to be forced to invest can be very dangerous can short is distress not just long only

muni's market is dislocating - not dislocated yet will likely eb SOUREC OF IDAES retail outflows form muni bnds - retail outflows tought market Genowrth interesting sume of the parts.doscosunt in stop is greater than mortage biz bc ppl don't like mortage biz

Richrad Perry general thoughts on investing Rob run\bin metor simple philosplsy excepted value analysis is the coiner stone of approach when he looks at any event always thiking about this series of different outcome sreris of gins or loses then a probably associated with all of this outcomes add the probates up and then fihsue our if value filling out the formula is the key to success or failure verity few will become good investors what makes a good investor what separates the good investors from not so good financial analyze is critical need to understand the issues rate of growth, assets , livbaitaies , legation, understanding fin statement si a critical comepenst in being a good investor terfeore do this in spare time since it is not tought much but need qualitative as well ability to analyze fin statement rather than model too many ppl are good at modeling but don't understand the model and the issues what is the issue qualitative side understanding the numbers the other is understanding the management teams detreieme can they execute a

business plan every co operates the same way invrstsor need to asses whether management will succsedd or failand business plan need some one to pick asset and create value always looks at these thing in tandem want good managena dn good asset value or value trap? concept of value is simple but dollar for 50c value trap - ppl manageming the business may be to perpetuate there lives in company then 50c could become 30c lessons of the value investor be contraina or opportunistic

buy list if where there is disclosation, a lot of failure, unhappiness is where he looks indemnify this sector of oppoutnuty and then id which are the best ideas within that sector is the best oppountiyt biggest investor in privatistion of eurpean coy governement had to divest stakes in coys in europe govts only cared about jobs as shareholders what was going to happen to margins at these coy? Met with all the CEO's looked for the ceo's who had a plann to increase margins and had a plan -

determine who and what you are. not who you what to be will be a lot stronger if you beceme who you really rae and what to be

try to derrenmien who you are buying it from and who you are selling it to? need to understand this critical investment in the peat rico - sellers were under divorced studying board and ceo's and their histories is critical travelling in uncertain time what are the best places two most improtant places in the world China and germnay are the most important counties in detreieming the future and how are they going to behave

China will detreime the growth of the ecoemocies around the world is going to be geremnay is the only AAA member of the euro zone benefietign the most from what is happening in europe Germnay understand what germnay does in terms of paying off the banks at a discount could be a mutt trillion restructuring politicians still talk about the weimer republic Chinese talk about the cutlaul revolution and famine look at the past behavior to predict the future need to be a good sovereign analyst swell thses days more alaiatautde of accounting for politicians need a lot more suspicion re fin staments for fin statements of a soevrgein China

Quality of mgmt? Need to be a old fashion sluthe, lookignthere CV and make phone calls reference checks find ppl who know them well is that person the real deal? or not the real deal? will eaialsy assertion how tp pick a good investor? are you doing it? from a young age? investing capital and getting capital back traitspersonality Hired a number of coaches Got them from GS analsed personalities number of fat pattrens came out

activist investing a plate of sushi and a hotdog would not be worth as much as plates of both seperatley rationale for spin offs ect

brody returns from merger arb is down from 30% pa to 4-5 per annum therevare natal sellers of securities when there is eal announced - mutual funds sell distressed investing - natural selling from inst.'s equity catalyst CEO getting fired - long stock down 20% oracle buying sun - not apparcating the valuation uplift Mergers should be booming soon.

Jim Personal journey focus on smaller conglomerates paper routes wanted to run a business - got job at blloingdales ran divisions of citi looks at things operationally need to have real understanding of a business truly understand the business to be able to present and plans that makes sense if it makes sense it will be accepted if something is undervalued there is something to do - therfeoerv always activist operational improvements, changers to the capital structure

when you allocate asset from supotimal situations to more ffeciecnt vecheiles it makes the wold more efficient as better for the world

brody objective fun, excellence, and liv beyond owners

profit share was lower then most partners therefoer shared more with partners

Time management in activists ROIC and Return on invest brain damage very high pop cost of time tehrefore must be attractive to do it firm reputation is also at risk if value is destroyed each deal build on franchise concentration maens must be right all the time focus, focus, focus on priority actions very lonf time frame between when you get see the fruits of action

captive investors would outperform in a big way vs private equity with less risk

debra fine arb macro or sentiement research cotervsery if possible if they are rseachbale then asses if they're cheap or fairly valued

phlean how to value iz an how to think about market prices graham when and what price is most imprnanat rather than what business five forces, industry, develop accusation..stunned that many ppl don;t know accating determine the comparative adbvtahge - how important? what is the magnitude of the advatantge---tht is crictual. how much pricing power? can be right of valuation 80-90% of time vs picking share pic 60% prepared to take losses - advantage like buffet

buffet never plays muscle charissores would always play need to conrol the process bruce lee add what is spscsisty your own process incaresis the probaility of good outcome

matrix

what makes a good investor intetsed in businesses rather than markets like to understand businesses ficsu on fundamentals rather than iniuition ability to be calm during a storm - research genrally contariran like to get things cheap need passion - ned to ove what they do what books do read on vacation? good question micheal jordan was the most passionate altahale need humility - investing is about need to make jufegment boaut the future not a lot mispriced- need the humility to make theta call cross dislisned learning - need to think about things in new ways thinking using mental models - munger average NYSE stock flutates 50% per annum think in aprobailsic manner more decision you add the more complexity you add need foritude

risk is not understanding what you are doing. therfeoer you wont feak out when things happen, do you really understand what you own coy ovrearning will add capacity underarm -\ if willing to take losse need investor who have a long term view and sticky capital ned to create aliangmnet as possible next crisis will be worse since lock ups are gone shorted duration will become difficult - sec cracking down on expert networks

investor must understand what you are doing information quality id now poorer - WSJ and FTlower quality if an industry is getting a lot of credit then they will spend it and squander it google - new ceo was a cost cutting and reprice options..bad signal who they are thinking about the future being early often lookslike being wrong www run screens and look abojectovely 100% failure rte on tecnicals - good to asses mood of the market - greedy or pessimsitic

Kyle Bass key issues that will face the world over the next 3-5 years Does debt matter? if does need to alter the way you think about everything almost people don't know that kd in greec when you get to very high levels fo deep to gdp you get a monbliaer relationship only delivering has been forced systemic risk has ben moved and not solved CBO forecast GDP inputs for forcats nomial GDP 5.2% interest rates can't move agaian alost wont see shrt rated go back to 4%

revenues move in liaserfashion but interest repayments move in a nin linar fashion 200% inc in greec was wipes them out

Govt economist couldn't quote the dsiscsmt rate for pension susyems japan nominal gdp is the same as it was 20 years ago punlci expebsiures have doubled

tax revenue have been in deline but expenditures are growing

as debt there is mathematical limit to much how much debet you can take on they are check mate situation there is nothing thy can do

debet expense is 50% of revenue eveye 2% incurs in funding costs keneyian debt point opoujation decelienis the fastest history no immergation population dcliem becomes more acute every year

more ppl exeietign the work force than entering - terefoer stresss the system two biggest buyers are now seller of JGB's No one wants to deaslw ith this

personal savings is now at zero over the next few years boj will likely have to buy all the bonds which are issued

once a developed country falls the world will have to reprice risk one one goes the domino fals

spend two days at sty uS last week