Hedge fund managers reveal "best ideas" at event

Reuters News
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Posted: May 18, 2012 4:58 PM
Hedge fund managers reveal "best ideas" at event

NEW YORK (Reuters) - Larry Robbins, founder of Glenview Capital Management, is bullish on Tenet Healthcare Corp. Meanwhile, Jonathan Kolatch, founder of Redwood Capital Management, is recommending buying Argentine government debt.

Once a year, top hedge managers get together at a charitable event to raise money for pediatric cancer research, by sharing their "best ideas" with hundreds of wealthy investors who pay thousands of dollars to rub shoulders with them.

The Sohn Investment Conference, held this year at Avery Fisher Hall at Lincoln Center, features some of the $2 trillion hedge fund industry's best-known managers, including David Einhorn, John Paulson, Bill Ackman, Jeffrey Gundlach and Philippe Lafont.

The event features 14 hedge fund managers and market commentaries who share their best investment views and picks, with no more than 15 minutes on each presentation. The conference honors the memory of Ira Sohn, a trader who died of cancer. The first conference was held in 1996.

In recent years, the conference has become a closely-watched event by traders on Wall Street and hedge funds who often jump on the shares of stocks that get selected as "best ideas." Last year, Twitter was on fire with live tweets from investors and traders attending the conference.

But investors should be mindful that sometimes a manager's "best idea" is nothing more than a one-day trade.

For instance, Einhorn, who called for the ouster of Microsoft Corp Chief Executive Steve Ballmer at last year's conference, is backing away from the giant software company. From the end of last year to the end of the first quarter, Einhorn's Greenlight Capital slashed its stake in Microsoft roughly in half.

A recent analysis by the hedge fund industry publication AR found that roughly half of the 62 stock picks mentioned as "best ideas" at last year's conference are trading lower over the past 12 months.

Here are summaries of "best ideas" offered by some of this year's featured speakers:

KOLATCH

The Redwood Capital founder said he likes Argentine debt because the South American nation "has even less leverage than meets the eye." The specific debt he is buying are euro-dominated Argentine bonds that come due in 2033 with a yield to maturity of 15 percent.

He added, the nation's balance sheet has improved significantly through "rapid growth and a market-imposed fiscal discipline."

ROBBINS

The Glenview Capital founder said he likes some hospital stocks like Tenet. But at the same time he his shorting utilities, specifically mentioning ITC Holdings Corp.

DWIGHT ANDERSON

The Osparie Management founder said he is long Westlake Chemical because he is betting palladium prices will rise more than platinum.

(Reporting By Svea Herbst-Bayliss, Katya Wachtel, Sam Forgione and Aaron Pressman; edited by Jennifer Ablan, Matthew Goldstein and Bernard Orr)