train, get off the train. that’s a great model. i will give you an antidotal story that makes my point. in november of 1983, dating myself, the two senior partners of goldman sachs said this guy you talk about henry singleton nobody at the firm knows screams unattractively about the teledine could you give him a cal? i called him and to make it a long story short he had no interest in talking to us november of 1983. on may 6th if memory serves me right, may of ’84, the stock 156 3/4 i’ll pay you $200 million in cash for the shares and he took it all and reduced the cap by 43%. he paid you a nice premium. if you were happy with that premium, you took your money, left the party. if you had confidence in his and his knowledge and ability to do a good for you, you stayed with the company. he didn’t force anybody out. i say to michael dell, do it for the shareholders. give them a premium. you have to give them less a premium to stay public than to take the whole thing private and do that, that’s the more ethical way of going. there’s a flip side argument to be made there’s a huge risk for this company the public doesn’t have the stomach. do what i said, give them an offer and they can get off the train. if they’re willing to take the risk of a leveraged vehicle and think michael dell and silver lake are smart, give them an opportunity to stay with them. five years from now we have a story michael dell mad$10 billion taking it private, the shareholders will think they’re screwed. you think the shareholders supp approve this are phony? they’re not phony. i’m making a more ral argument. he’s saying i don’t want to run a more leveraged vehicle in the public eye. i’m willing to run a leveraged vehicle private. i’m saying let the public make the decision. if south management is happy, they can take the stock and leave the party. herbalife — herbalife are very smart guys. you don’t own the position. i don’t own the stock. why talk about it if you don’t own it? you asked me about it. the others — all these guys are manipulating you guys. scott saying i don’t want to talk about what you want to talk about, i want to talk about what you want to talk about. basically manipulate your view. i respect carl icahn and dan, they’re smart guys, didn’t get where they are by falling off a turnip truck. i would be reluctant if i was ackerman by selling 20% to the public. now does he have a responsibility to the public, stood in front of people for three hours trashing his he may be right or wrong but if he was to change his position, would an intelligent lawyer say since yonditioned the public and ma statements — the law doesn’t require that, do i think he has taken on a bailment and has a responsibility to the public. there was a bunch of fellows in the early ’80s short sellers running high, the fishback family, i know well not making a negative comment. nobody got rich temporarily. it’s not a wise thing to publicize your short position. what about david ieinhorn who came out — i was careful saying nobody ever got rich publicizing their short position. forget being rich, is there a public service argument to be made when you could argue david einhorn raised some important issues potentially to the extent you think akman is right and i’m not arguing he is or isn’t, you could argue he’s raising a public element at the same time, they’re doing it as well. i have nothing against s selling. it does add certain discipline to the market. not the point i’m making. the point i’m making is it wise to bring the public into this the way he’s done it. does he have a responsibility that limits his trading. goldman sachs would not bring iarbitrage trading to the public and they didn’t have a responsibility to inform them before they did what they did. akman may have a responsibility to the public. let’s turn it around. if you are a big bull to a company and make a presentation in favor of it, are you bound in reverse of that to let people know you’re getting out of the stock. i don’t know. i’m not a lawyer. maybe that should be your next guest and ask the question. bill akman spent three hours trashing this company. he may be right or wrong. he does very thorough research. that doesn’t mean he can’t be wrong, right. i’m asking rhetorically does he have a responsibility to the public. i think he does. but i’m not a lawyer. you tell us you like google. but i didn’t spend three hours with 400 slides telling you why i like google. i go to a survey we make of things that are attractive. go back to facebook, i was there before the ipo of facebook, and said facebook is like a beautiful woman without a blemish and the moment the blemish comes up, facebook is down and google is up. you’re still in it? yes. it’s a philosophical question. i don’t have any emnity. i like them and respect them. if i see what they’re doing, i i haven’t looked at herbal life, not my thing. i don’t know whether it’s herbal life or herb-al life. i don’t know which it is. these are philosophical issues. i think he has responsibility. now, he was unified and sold 10 million shares of jc penney. that’s why they’ve gotten rid of — they haven’t gotten rid of him. he was a terrific guy. paid $100 million to get him. gave him $100 million deal to leave. and steve is a terrific guy. i don’t know the inside there.
the dow came off a record close, the first one it hit since october of 2007. join us now whether the market rally will continue. the market strategist, head of u.s. portfolio strategy at barkleys and our guest host for the next hour, hedge fund leon cooperman. i have to start with, neither one of you guys, i don’t think of the word legend but with leon, he is. sorry, not to love you guys, jeff and barry. lee, what do you make? more to go or less? i would say more to go. i would come across as a simpleton by saying i think things have been reasonably classical, in a sense if youlook back at most bear markets recede recessions. the average bear market lasts a year, down 25%. 09 went down 57%, lasted about a year and a half. lo and behold the average recession had a decline of 2% in gdp, lasts about a year. this past recession was an 18 month affair, down 4.7. in a sense, twice as severe bear market and twice as severe economic contraction giving rise to all the traditional response, fiscal, monetary. bernanke told us almost everyday since 2009 he wants higher inflation, more economic growth and lower unemployment and higher stock prices to create wealthy and consumption. two questions you have to ask yourself as a money manager, has he gotten the market into a zone of overvaluation through this zero interest rate policy. secondly, whose ox will be gored when they start dealing with this budget deficit. have you asked yourself that an $800 billion deficit in thefourth year of a business recovery and zero interest rates.what’s normal? i say normal is a year government 4 to 5 to 6%, not 180 and s&p multiple 15 and something around 100.means the market is fairly valued around 1500. we’re about 1540. he’s gotten the market into a zone of fair valuation. every market ends overvaluation and every bear market under v so the market is still okay. it’s not a bargain anymore. i see all this excitement and say to myself, the last time i saw excitement am was 700 and facebook was 38. the market is okay. you will need a recession to bring it down or some sort of upset in the middle east. the market is okay, not cheap but okay. i don’t know how long you’ve been negative. the last time i know you were negative on the show very much so. how about now?we’re talking about a range. joe, bernanke is one of the wizards behind this movie called dow the great and powerful. if you look behind the curtain, wave gotten here on different names, no citigroup, no gm, a different set of horses. what’s unique and different this time we have an index that crossed a milestone in february and gone a little bit higher. the same thing happened last year, we crossed 13,000 in february, crossed 12,000 infebruary the year before and then we stayed there the rest of the entire year, 5% up and 5% down. i’m still in the camp i thinkwe’re in a volatile range round year and the market should befocused on not only the direction but the volatility. how much of this have you missed or your clients missed? last time you on you definitely were negative? years or months? we pulled — we began to pull back in early february as we hit that 14,000 milestone. so we’re waiting for these dips. we actually bought the home builders. you only missed — you only turned negative — you missed 200 points? that’s pretty good then. you usually see 10% plus or minus swings. you get better entry points. the bull market is nver yet. there are lots of ups and downsbalanced between positives and negatives. barry, how are you feeling? funny, when i started thinking about october of 2007, i
Charlie Munger: Invert And Use “Disconfirming Evidence”
Charlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More