Chris Shumway is the Founder and Managing Partner of Shumway Capital, a private investment firm focused on private investments, public investments, seed investments and strategic/venture capital. Shumway Capital managed external funds from 2002-2011 and was recognized as a top 10 performing manager by Barron’s Magazine. In 2011, the firm returned outside capital to concentrate on a long-term investment strategy for the firm’s Partners. Prior to founding Shumway Capital, Mr. Shumway was a Senior Managing Director and Management Committee member at Tiger Management. He received an M.B.A. From Harvard Business School and a B.S. From the McIntire School of Commerce at the University of Virginia. Chris Shumway is a member of the boards of the University of Virginia McIntire School of Commerce Foundation, ConnCan and the Shumway Foundation. He also serves as a visiting professor at the University of Virginia, teaching global investing.
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Chris Shumway spoke at the IRA Sohn Investment Conference, also see The Changing State Of The Private Equity Industry: McKinsey. Below are notes from his presentation. NOTE all times are Monday May 5th 2014 (EST)
Highlights from Chris Shumway’s presentation
Chris Shumway is the second speaker at the conference today.
Chris Shumway is a Tiger cub hedge fund manager.
12:25 Shumway says he’s been bullish on growth for the last year and a half. “But things have changed…Now we’re less excited.”
Shumway shows Hammered Index of momentum stocks hurtling downward this year which he says feels a bit strange. However, Shumway does not believe that rising interest rates are the reason that momentum stocks have been hammered lately. What are the big issues now? Shumway states that the biggest issues investors face are China, Vladimir Putin Janet Yellen and China. He is hedging for the Ukraine scenario and believes this is one of the big risks in the world right now.
12: 30 Shumway says CNH is the best way to short China’s currency. He is fearful of the slowing GDP in the country and believes the country lacks the tools to deal with slowing growth. He believes China will devalue its currency to deal with the current issues facing the country, which will make this trade profitable. Another idea go long Moody’s (NYSE:MCO) shares are up on the announcement.
12:35 He calls Moody’s “a great business” that’s part of a duopoly, which possesses a strong moat. Few companies have as strong moats as Moody’s, Shumway says (Warren Buffett would likely agree with that analysis). The company has a huge 81% return on capital and has over 100 years of 5% pricing power. Not too concerned about Government since the crisis is so far out, according to Shumway. Long-term growth at MCO should be 19-22% per year, but investors fear Government litigation and this has created reasonable valuations.