Friday, 31 October 2014
Last updated 14 hours ago
Apr 16 2014 | 2:29pm ET
Hedge fund manager John Hempton wishes he’d never taken that trip to Queens, N.Y.
Hempton, who runs Bronte Capital, was initially skeptical of Herbalife in the wake of Pershing Square Capital Management’s allegation that the nutritional supplements company is a pyramid scheme. Indeed, he called Herbalife “scuzzy.”
But then Herbalife invited him to visit a Queens nutrition club, after which Hempton became a major Herbalife cheerleader and shareholder, and a bitter critic of Pershing Square’s William Ackman.
“The shorts have now been categorically shown to be wrong,” he said in January, after his Herbalife bet helped fuel a 37% gain in his fund. Indeed, he called it his “best stock of the year.”
This year, things have changed. Hempton admitted that Herbalife shares have reacted “very badly” to word of regulatory and criminal investigations, costing Bronte a “few percent.” The fund is down 2.4% this year.
“Things that should work are not working,” Hempton said of his $46 million portfolio.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.