In a video with his Reuters colleague David Gaffen, Felix Salmon says there’s no value in following the Ira Sohn conference, where various hedge fund managers get up and talk their book.He makes some good points:
- Hedge fund managers are consummate salesmen, and if you buy after they speak, you’re basically just a sucker.
- And you really don’t know which ones are worth listening to. Identifying a good fund manager is even harder than identifying a good stock.
You know, it’s the basic argument against buying stocks because some “guru” said to. And as Felix argues, that applies to journos covering all this.
And we’d almost agree, except there is one point of value…
It’s not often that you get to hear the thought process and reasoning employed by these financial professionals. Within the broader scope of financial media, you hear a lot of managers and pundits making their arguments in broad strokes, with lines like “We’re bullish on US banks because of low rates, yada yada yada…“And that kind of stuff really is useless. But these are professionals who usually have portfolios of just a handful of stocks, who have done a tremendous amount of research on each one before pulling the trigger, and frequently they do have original insights.
So you shouldn’t go out and by MBIA just because a manager likes it. But if you’re looking for original thinking on stock selection, the speeches, presentations, and letters of big hedge fund managers is frequently some of the best stuff around.