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What a difference a year makes.
In 2013, Bill Ackman was accused of losing his golden touch. His investment in J.C. Penney was called a "fiasco." His Herbalife short famously turned against him when fellow activist investors Carl Icahn and Dan Loeb took the other side of the trade. Pershing Square Capital Management's assets fell as performance was barely positive into the fall.
This year is different. Late Monday, news broke that Ackman and Valeant Pharmaceuticals were offering to buy Botox maker Allergan. Shares of Allergan, of which Pershing Square owns 9.7 percent, immediately gained about 23 percent.
That's not the only winner: Every Ackman investment appears to have made money this year, including Beam, the Herbalife short and Platform Specialty Products Corp. Nutritional supplement maker Herbalife, for example, has been hit by reports of several government investigations into the company, which has helped push the stock down about 26 percent so far in 2014.
The Pershing Square International fund is up 11.1 percent net of fees in the first quarter alone, according to a report by the HSBC Alternative Investment Group.
When it comes to investing, those at opposite ends of the economic spectrum are going in pretty much completely different directions.
The more affluent in society making above $75,000 now believe real estate offers the best investment choice—even better than stocks and gold and a whole lot better than bonds, according to a recent Gallup poll.
Conversely, those at the lowest end of the economic spectrum, making less than $30,000, believe gold is their best investment, easily beating a stock market that gained nearly 30 percent over the past year and 180 percent since the March 2009 recession low.
Some of the reason for the disparity is fairly common sense—it's easier for someone with limited funds to buy gold than it is real estate and even stocks.
One of the hottest topics of market conversation Tuesday was Bill Ackman's move to join Valeant in a takeover bid for Allergan. But there also was another huge move in pharma overnight that didn't garner near the attention.
One astute trader picked up $250,000 overnight by buying options in Furiex Pharmaceuticals, which develops drugs used in compound development and collaboration and saw its shares spike, according to an analysis by Andrew Keene of KeeneOnTheMarket.com.
Read how the trade broke down here.
Hedge fund managers are still bullish on Japan despite a painful start to the year.
After large gains in 2013, the Nikkei 225 stock index is down nearly 11 percent this year. The Japanese yen, which many investors were betting against, has also appreciated almost 3 percent versus the U.S. dollar.
Those broad moves have cost investors: The average Japanese stock-focused hedge fund fell an estimated 5.75 percent over the first quarter, according to data from Simplify, which tracks performance.
Hedge funds appear to be unfazed by the bad news.
Happy Tuesday. Keep your eye on the prize and watch out for the activist investor looking to snag your Morning Six-Pack.
One of the kings of activist investors, Bill Ackman, is in on the prowl and about to land perhaps the biggest fish of his career as Valeant gets set to make a major move on Allergan and all of its Botox and breast implant glory. (Wall Street Journal)
Alan Mulally, whose reign at Ford will be remembered for the way he demonstrated that you can run a successful auto company without needing the government to hold your hand and pay your bills, is expected to leave sooner than expected. (Economic Times)
Dan Loeb continued his battle against Sotheby's with a new letter promoting Third Point's board nominees over the art house's slate.
"We are convinced that having an owner's perspective in the boardroom yields better results, that this board is in dire need of fresh insights, and that our candidates are more qualified than the company's emissaries we are seeking to replace," Loeb wrote in the letter released Monday.
"We are confident that adding three shareholder voices to this twelve-person board will do more to improve Sotheby's long-term growth and increase its share price than would rubber-stamping the company's latest set of hand-picked nominees."
Shareholders will formally vote on the new board at Sotheby's annual stockholder meeting May 6, but proxy cards were sent at the end of March, prompting Third Point to position itself early. Institutional Shareholder Services, which advises stock owners, will likely release its recommendation on the fight this week.
Third Point's director nominees are Loeb himself, plus turnaround expert Harry Wilson and jewelry executive Olivier Reza. Sotheby's nominees are private equity advisor Jessica Bibliowicz, retail mall developer Robert Taubman, and restaurateur Daniel Meyer.
The latest evidence that some people just can't get enough comes from investors who say they're still afraid of the stock market—despite a stunning 180 percent gain over the past five years.
In a survey by Bankrate.com released Monday, fully 73 percent of respondents say they're no more inclined to put capital to work in equities than they were a year ago, even with a low rate of returns on other investments like savings accounts and certificates of deposit.
The number is consistent with the 2013 and 2012 surveys—which saw readings of 76 percent—and comes even though the S&P 500 stock index surged 29 percent last year.
Happy Easter Monday. May your basket overflow with marshmallow Peeps.
And may Boston be alive Monday with swiftness and safety as the first post-bombing Boston Marathon commences. (Boston.com)
This writer in a previous lifetime wrote many a story about cellulosic ethanol and how cornstalks and other such things could be converted to fuel, which a new study says contributes more greenhouse gases than gasoline. (redOrbit)
Talk about disregarding bad news: Investors have been all but ignoring a fairly miserable earnings season as hopes proliferate that in the end it's only a blip on the profit radar.
The market actually has risen modestly during a reporting period in which profits are up a scant 2 percent, according to Thomson Reuters I/B/E/S, and expectations among analysts remain that the overall season could see a net loss for companies on the S&P 500.
In fact, Jeff Kleintop, chief market strategist at LPL Financial, pointed out in a recent report that the total earnings "cycle"—from the recession trough in the second quarter of 2009 to the current level—is the weakest in 55 years, dating to the late days of the Eisenhower administration.
But like many of his Wall Street brethren, Kleintop believes the current low is only a temporary lull before a stronger economy free of winter's clutches triggers stronger corporate profits.
After renting a two-bedroom apartment on New York City's Lower East Side for several years, 32-year old Lea Ann Willett and her husband craved more amenities and space, and floors that didn't creek.
Buying a condo in Manhattan wasn't an option. The Willetts wanted to avoid dealing with co-op boards and the general risks associated with owning in the New York market.
So the couple branched out and decided to rent a two-bedroom apartment in a brand new high-end building in Brooklyn Heights—equipped with a washer and dryer in each unit, stainless steel appliances and a virtual doorman. Plus, the subways and an Equinox gym are just steps away.
"It is such an investment in your health and well-being," said Willett, who loves the idea of being the first person to live in the apartment. "It definitely felt like the right move."
Bill Ackman also tells CNBC that Allergan's poison-pill defense doesn't make his takeover bid more difficult.
The bull market is seeing the equivalent of its first gray hairs and the proof is in Tuesday's blast of merger activity.
Greenlight Capital supports the subject of the book 'Flash Boys' and thinks investors should consider routing orders there.