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Smart Money Speaks: Keen Insights From Hedgies

Wednesday, 26 May 2010 | 5:31 PM ET

If you’re like us and always keep an ear open for market chatter, you’ll want to hear what these guys are saying.

We’re talking about the hedge fund managers who attended this year’s Ira Sohn conference.

It’s a charity event in which top hedge fund managers reveal their best trading ideas.

In the past, some of the information has been almost prophetic, according to the Wall Street Journal. It was at this same event in 2008 that David Einhorn said he was bearish on Lehman Brothers.

And one year earlier at this same event Bill Ackman said MBIA and Ambac would be hurt by the subprime mortgage crisis.

Play of the Day: Disney
Why investors should buy Disney now.

What's noteworthy this year?

Value investor Jeremy Grantham says bonds are "grotesquely" overvalued and your best bets are timber and emerging markets and blue chips, reveals host Melissa Lee.

(Grantham is the Chairman of the Board of Grantham Mayo Van Otterloo, a Boston based asset management firm well known among institutional investors.)

If you want to buy timber look at FBR, comments Tim Seymour.

Also Steve Eisman, the senior portfolio manager of the FrontPoint Financial Services is short Apollo, Lee adds.

According to a related Barron’s report, Eisman says he thought he’d never see a scandal equal to sub-prime mortgages, but he’s found it: pro-profit education companies.

Meanwhile, David Einhorn of Greenlight says he’s still short the ratings agencies including Moody's and McGraw Hill and thinks what is going on in Europe could end up being something similar to what happened here in the US, says Lee.

One thing to know about the ratings agencies is that they haven’t lost litigation involving recommendations that were not accurate, explains Karen Finerman. So far they've won by saying it was just our opinion.

Bonds Overpriced? Go for Emerging Markets
An update from the Ira Sohn conference.








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Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report

  • Jay Yarow, The Business Insider, and Steve Milunovich, UBS, discuss whether Tim Cook is to blame for Apple's drop in growth. I think it's pretty clear they missed the big phone market and overestimated the success of the plastic 5C phone, says Milunovich.

  • CNBC's Eamon Javers reports on Bill Ackman's stake in Allergan. Javers says this is a classic case of insider trading that is not against the rules.

  • FMHR trader Josh Brown thinks Dunkin' Brands looks fantastic technically, while Mike Murphy says investors are questioning the company's massive expansion plans.