The recent news of the continued troubles at Valeant and hedge fund manager Bill Ackman’s losses in the stock have gotten many people excited. Lots of investors and other hedge fund managers are metaphorically screaming, “I told you so.” They’re even excited that Mr. Ackman is on the losing side of the trade while they’re on the winning side. Well, the jury is still out on what will happen with Valeant and what its long-term effect on Ackman’s fund will be, but one thing is clear: Investing is a blood sport and when the sharks smell blood, they pounce. Still, I think the real story is volatility.
Market volatility has pounded many managers, both hedge fund and traditional this year. They don’t know what to make of it, how to deal with it and, more important, how to make money for their investors during it. So, dear readers, when one manager gets caught in a tsunami, many of those who are also stuck are able to use his problems to deflect attention from their own. Build a fire over there so no one will notice the fire burning over here in our own house.
The jury is still out on Valeant – perhaps the recent shakeup in both management and the board is what is needed to right this sinking ship. The jury is not out on Mr. Ackman and his firm, Pershing Square Capital Management, though. He will get through this storm. It may take some time but, things are far from over for him. Those who are excited by this recent hiccup, albeit a big one, should instead focus on fixing their own portfolios and dealing with their own indigestion.
THINGS THAT DRIVE ME CRAZY
Don’t be afraid of the phone. With all this talk of smart phones, the one thing people seem to be afraid to use them for is to make a call. Don’t get me wrong, I love a good smart phone, I mean, really, the ability to check weather, email, to get texts and to make hotel and dining reservations is great to have right in the palm of my hand. Still, I find it funny that people seem to be afraid to actually make a call. Today, all anyone wants to do is to tap a few keys and let the chips fall where they may. Well, to me this is wrong. Making a call and actually connecting with a person is valuable. Email and texting is impersonal and not a true way to communicate.