Delivering Alpha Conference: Ackman, Peltz, Gundlach, Meister

Below are the notes from the Delivering Alpha Conference 2015, featuring Bill Ackman, Nelson Peltz, Jeffrey Gundlach, Bill Miller, Keith Meister, Tom Sandell, Jeffrey Smith and more.

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

[drizzle]

Delivering Alpha Conference 2015: Notes from Bill Ackman, Nelson Peltz

Bill Ackman, CIO Pershing Square Management LP

Nelson Peltz, Partner and CEO Trian Fund Management LP

Peltz: We have two new pos'ns accounting for 1/3 of our capital. One is industrial, the other, not saying.
Ackman says that if you can put on a great CEO on a company, "you could make a fortune" when discussing activism.
Ackman also says two of the most interesting companies on his radar are Fannie Mae and Freddie Mac because of the upside they present.
Peltz also said he would consider adding to his DuPont stake.
Peltz also says Pepsi has put itself in a position where they could continuously beat earnings expectations, "but they can do more."
Peltz: "We'd rather be rich than be right."
Ackman says Peltz made a mistake by waiting too long to get into a proxy battle with DuPont.
Peltz: "If I wasn't at Wendy's ... I'd [invest] in McDonald's."
Ackman: "I think China is a bigger global threat [than Greece] by far."
Ackman on Fannie: "A lot of risk"

Delivering Alpha Conference 2015: Notes from Christopher Ailman, Mary Callahan Erdoes, Eric Mindich, Richard Perry

Christopher Ailman, Chief Investment Officer, California State Teachers' Retirement System

Mary Callahan Erdoes, Chief Executive Officer, J.P. Morgan Asset Management

Eric Mindich, Chief Executive Officer and Founder, Eton Park Capital Management

Richard Perry, Chief Executive Officer, Perry Capital

"At this point, Greece is a humanitarian issue," J.P. Morgan Asset Management's Mary Callahan Erodes.
Greek bonds will trade close to par as European QE carries on: Richard Perry.
Eric Mindich: Greek resolution is good for euro, but "you should still remain very liquid" in Europe.
Christopher Ailman says that, on a P/E basis, Europe remains an attractive market.
Mindich says the wild Chinese stock market swings will not have a huge impact on the local economy.
Erdoes: Chinese market levitated by leverage, period.
Discussion of leverage in China market has not touched on half a trillion dollars in margin debt in U.S. market
Mindich says Chinese A-shares are a good investment right now.
Ailman says that "China is a real challenge ... I want to get some beta exposure to get that GDP, but it's going to be a real challenge" because of the ESG problems.
China litigation risks are a problem because of their impact on earnings, Ailman says.
Investors looking to invest in Japan should look at true Japanese companies, not the big multinationals. Erodes says.
Perry says Puerto Rico is often mis-characterized as being the next Detroit. "You look at PR, worst-case scenario is only 70 percent debt/GDP ratio."
"Puerto Rico is a very interesting place to invest," Perry added.
Erodes says, however, that the decreasing population should be a large concern for investors.
Ailman concludes panel saying that, while the bull market is not dead, it is a little tired.

Delivering Alpha Conference 2015: Notes from Esther Dyson, Scott Kupor

Esther Dyson, Chairman, EDventure Holdings

Scott Kupor, Managing Partner and Chief Operating Officer, Andreessen Horowitz

Andreessen Horowitz's Scott Kupor and EDventure Holdings' Esther Dyson discuss their outlook on the tech sector.
Kupor: The interdependence between tech companies is much less than in the early 2000s.
Dyson says that a more appropriate metaphor for the tech sector may be a "trampoline" rather than a bubble because of the unevenness in valuations. Adding that investors could get hurt but not to the degree where they could have during the early 200s dotcom bubble.
Government intervention on companies like Uber could affect valuations, says Dyson reacting to Hillary Clinton's comments on the "sharing economy."
Kupor says that, if we get a macro correction, it could hurt the IPO market.
The power of big data will affect companies of all sizes in the coming years before concluding the panel.

Delivering Alpha Conference 2015: Notes from Jeffrey Gundlach, Bill Miller

Jeffrey Gundlach, Chief Executive Officer and Chief Investment Officer, DoubleLine

Bill Miller, Chairman and Chief Investment Officer, LMM LLC

audience question about economic growth rate, 44% think it will be closets to 3%, pretty much in line with consensus
audience question about where stock market will grow finds expectations to "slightly higher" and only 14% saying more than 10% higher by this time next year
Bill Miller says Amazon is still a good investment despite not turning a profit because of its growth of growth profit dollars.
Jeffrey Gundlach says he does not own Amazon."I'm allergic to things that don't make money," he says.
Gundlach says the Fed will not meet its inflation goals this year.
"The economy has improved to a certain extent because of ... real GDP growth," Gundlach says. However, he also questions how good of an indicator real GDP growth is
"The long bond wants the Fed to tighten," Gundlach says, explaining today's move on the bond market amid Janet Yellen's testimony.
"The set up for a rate hike is not going to play out in 2015," Gundlach says.
Miller also says the Fed is better off waiting on raising rates.
Miller says the U.S. 10-year yield bottomed out in July 2012, adding that that was the start of a bear market for bonds.
"Bond yields are probably rising on a secular basis," Gundlach says.
People don't understand that bond investors want rates to rise because it provides a better opportunity for reinvestment, Gundlach says.
Miller adds that he sees airlines growing moving forward.
"Homebuilding will never go back to where it was," Gundlach says.
Gundlach says the USDJPY will go up to 200 at some point.
Miller says oil prices will trade between $40 and $60
Gundlach also said, before concluding the panel that Morningstar "doesn't really understand what we're doing."

Delivering Alpha Conference 2015: Notes from Keith Meister, Tom Sandell, Jeffrey Smith

Keith Meister, Managing Partner and Chief Investment Officer, Corvex Management LP

Tom Sandell, Founder, Chairman and Chief Executive Officer, Sandell Asset Management

Jeffrey Smith, Managing Member, Chief Executive Officer and Chief Investment Officer, Starboard Value LP

Jeffrey Smith makes bullish call on Macy's, citing the high value of its properties. He says the company's stock value is over $125 per share.
M stock spikes on Smith's call, now up nearly 4 percent.
"We believe there is an opportunity to create two leading companies ... while maintaining the dividend," Smith says.
Smith says his analysis only takes into account "A" malls and Macy's trophy properties. It doesn't look at "B" and "C" malls.
Tom Sandell's best investing idea? Ethan Allen Interiors.
Ethan Allen is now up more than 3.5 percent on Sandell's remarks.
Sandell cites the company's high real estate value for his call.
Sandell says his company has not disclosed its stake on Ethan Allen yet.
Keith Meister's best idea is American Realty Capital Properties (ARCP). Company shares are up about 1 percent.
ARCP surges, now up more than 4 percent.
Meister says ARCP has taken the necessary steps to repair itself.
The real untold story about activism are stock holders acting like owners, Meister says. "Activists here on stage are just the ring leaders."