Unhedged but not Unhinged
Before heading for Europe I this morning arranged to cash out of my only hedge fund. I think this is a good time to explain the difference between how we get information and how some hedge funds do it.
As a dirt-poor newsletter writer, I cannot afford to pay bribes to semi-retired academics who are supervising phase III drug trials for telling me how well or badly they are going before the results are announced so I can buy or sell shares based on non-public information.
I cannot play up ethnic links or biz-school reminiscences to get members of the board of a major investment bank to share information with me when Warren Buffett bails them out.
I cannot lure lawyers into telling me about the acquisition candidates they are doing the paperwork on with cash or secret investment accounts.
I do not accept from stock promoting “investor relations” company funds for mass mailings to build up my subscriber base while boosting some tiny stock the IR is pumping and dumping.
Nor do I publish (or threaten to publish) advice on shorting stocks.
Despite this we have a respectable track record for beating the market with our picks, sometimes dramatically. And I think we are doing it again right now.
We did this first with Teva after a French analyst covering the stock for the Swiss Rothschilds decided to confide in me when this newsletter began. We did it again with Telefonica de Argentina bonds after I visited the company in Buenos Aires in 2003 to make sure the prospectus correctly assigned the debt to the phone company's Spanish parent.
We did it again two years ago with foreign bank preferred stock again based on careful reading of legal documentation. And now we are doing it again because a former bio major expert with an emptying nest escapes from the problems of looking after her elders and girlfriends by reading learned journals in between dealing with her father's first wife and his third wife and her aunt who never married. I can never keep her relatives straight but one has Alzheimer's and the other has Parkinson's, one had cataracts, and the other macular degeneration. And the girlfriends have grim diseases too. More for paid subscribers about this follows along with news from India, Israel, Canada, Ireland, Spain, Switzerland (2), Britain, and Brazil: