The Daily Alpha: Real Talk on Elliott Management, Warren Buffett, and Why ESPN Ruins Everything

Apr 24 2017 | 5:47pm ET

Today we discuss the hold up in Congress over the border wall, speed dating for money, Elliott Management's battles, and how ESPN personalities ruin the NFL draft.

Hair of the Dog:

Quotes of the Day

“We've heard this little scene, we've heard it many times. People fighting over little things and wasting precious time.”
~ Talking Heads, Found a Job

Markets rallied on Monday thanks to optimism over France’s election.

But the reality is set to sink in on Tuesday. A government shutdown is looming, and Republicans and Democrats are back to what they do best… being the party of no ideas and the party of bad ideas, respectively.

The budget proposal is being held up because President Trump wants Democrats to include money for a big beautiful wall along the Mexican border.

"The Wall is a very important tool in stopping drugs from pouring into our country and poisoning our youth (and many others)! If ... the wall is not built, which it will be, the drug situation will NEVER be fixed the way it should be!" Trump tweeted today...

If this is his sales pitch, it’s terribly incorrect. The bulk of drugs come through ports of entry.

And if you want to stop drug trafficking, you don’t do it with physical walls.

You do it by cutting off the financial networks… and you find ways to eliminate the cartels' incentives.

"At the event, you get to crank through this speed-dating schedule, if you will, and walk away with 20, 25 new leads on both sides. 

Who needs online dating?

That’s Ron Biscardi, chief executive officer of Context Capital Partners. His company set up a new popup event called the Context Summit last Thursday.

For $10,000, a hedge fund gets to set up a booth and hold roughly 20 half-hour meetings with potential investors. Biscardi said that roughly 150 investors and 150 managers attended the first event. Interestingly, Context allows users to set up profiles similar to what you would find on

Details of the profiles include biographies, strategies and past performance.

"There are activist strategies that are destructive and harmful... but we think the things that we have done have added to stakeholder value."

BBC's Natalie Sherman offers a profile of Elliott Management, which has gotten a lot of press in the last week after former Arconic Klaus Kleinfeld supposedly made a thinly veiled threat in a letter to Paul Singer.

A soccer ball was included with the message. It also said Kleinfeld wanted to find “a native American Indian’s feather headdress" for Singer.

Two things…

First, in conversations with people in the hedge fund industry over recent days, it appears that the "Indian Headdress" story is more important than the French election.

Alistair Osbourne at The Times offers his insight and it provides the most details we've seen so far. Overall, it's pretty tame, so one has to question why exactly anyone cares if someone allegedly sang "Singing in the Rain" while wearing an Indian headdress in a fountain.

That's called Thursday in our office.

Second, the quote above is by Singer at WSJDLive last year. While many companies may agree that activism has added value… what about the people of Argentina and Peru? 

“Buffett is likely to oppose Einhorn's plan for a simple reason: It does nothing to increase GM's intrinsic value.”

The Motley Fool speculates that Warren Buffett is set to battle David Einhorn over the latter's' proposal to shake up the company's stock. This story is just another sign of a slow news day, but it does offer a glimpse into the investment strategies of both men and their competing level of patience when it comes to making money.

“I want eight years.”

Finally, this week is the start of one of the most marvelous annual spectacles in self-aggrandizement.

This Thursday, the NFL Draft kicks off in Philadelphia, Pennsylvania.

And for the next week, you’re not going to be able to watch ESPN (unless you’ve smartly cut the cord already) without seeing a bunch of grown men in suits, pushing flat-screen television and guessing what team will do what and why… all while being completely wrong about what is going to occur and why…

The last three decades of draft speculation – with each year getting worse and worse, and earlier and earlier the same way that stores decorate for Christmas in September – can be blamed on one man: Mel Kiper.

Kiper has always had a loud personality. He has grown harder to handle over the years because of ESPN, a network that has built itself around 24 hours of people shouting the same things over and over again.

The network may have hit its peak ESPN moment when it hosted a live 24-hour stream of Fantasy Football analysis – yes… 24 hours – because insomniacs and alcoholics are dying to know what Matthew Berry thinks of the Seahawks defense at 4 a.m.

ESPN has created 40 Mel Kiper impersonators over the years, and all of them have a new decibel of shrill talking points and no better understanding of NFL scouting than most grandmothers.

But Kiper must be remembered – and held accountable – for his most glaring error in the history of NFL draft speculation.

Eight years ago, he said that if Jimmy Clausen – the former Notre Dame quarterback – “is not a successful quarterback in the NFL, I’m done. That’s it. I’m out.”

Kiper had Clausen ranked as the number three player on his board.

Clausen wasn’t drafted until the 48th pick overall during a live show in which Kiper continually whined that everyone else was wrong… and that he would reign supreme as the greatest mind ever in the history of Mock NFL Drafting.

ESPN’s Todd McShay said that he would know his answer in three years.

Kiper said he wanted eight years. America has given him seven so far.

In that time, Clausen has started 14 games, thrown seven touchdowns, 14 interceptions, and has a world-beating passing yardage total of 2,520.

He is currently a free agent and its unclear if he will be signed in 2017.

Mel Kiper everyone.

Proving you too can be an ESPN host if you just shout really loudly and incoherently.

Monday Reading List

Benzinga: How People Choose Hedge Funds: The Importance Of Branding

Bloomberg: Hedge-Fund Manager Crispin Odey Says It's Lonely Being Bearish 

CNBC: Hedge fund legend Paul Tudor Jones says this 'terrifying' chart should freak out the Fed

MorningStar: The SEC Should Muzzle Former Hedge Funds

CoinDesk: Hedge Fund Founder Invests 10% Net Worth into Bitcoin and Ether

WSJ: Big Holders Target Wells


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