The 16th annual Ira Sohn Investment Conference in New York City yesterday featured dozens of specific investment ideas from some of the biggest names in hedge funds (See the full list here). It turns out AR has looked at some of the topics before.
Jim Chanos of Kynikos Associates told attendees to short green tech companies First Solar and Vestas Wind Systems. That idea was explored in a March analysis in AR, “Against the wind,” which noted:
You might think rising oil prices would stimulate interest in wind energy stocks, but some hedge fund managers beg to differ. “Wind tends to blow in places where, and at times when, people don’t use power,” says Tim Flannery, founder of Copia Capital, the $528 million energy specialist hedge fund, which has been shorting wind energy companies during the past 18 months. Flannery isn’t alone. Shorting renewable energy stocks, and wind companies in particular, was a popular hedge fund play in 2010.
Mark Hart of Corriente Advisors again explained his China short thesis, recommending long puts on the Chinese renminbi. AR explained Hart’s case in a December 2009 article on the launch of his fund:
Is China home to the world’s next economic miracle or a bubble economy fueled by excessive credit growth? Fort Worth contrarian Mark Hart is betting on the latter. With the December launch of a fund specifically designed to profit from the fall in the renminbi, China’s currency, the Corriente Advisors founder believes he has found an asymmetric return profile similar to the short subprime housing bets that earned him stunning profits in 2007.
Phil Falcone of Harbinger Capital Partners used his presentation to recommend buying Crosstex Energy, but he also promoted Harbinger’s mobile telecom company, LightSquared. As AR noted earlier this month, LightSquared says it is on track to build a unique wholesale-only wireless communications network for later this year by linking satellites and ground antennas for near-ubiquitous high-speed coverage. But the wireless bet has not helped the fund so far:
Harbinger’s assets fell by 11.25% during 2010, leaving it with $7.1 billion on January 1, according to AR’s Billion Dollar Club. Falcone’s flagship fund was down about 12% last year, and he also lost 19% in his side pocket fund, which contains illiquid assets, according to the recent AR Rich List. His assets under management have also shrunk from a peak of $26.5 billion.
As AR noted in September, the bet has rankled some investors:
About 98% of the $3.4 billion flagship fund’s net asset value is in telecom, telecom services and cellular telecom positions, the bulk of which is private. The valuation of those positions is so uncertain that Harbinger could be nursing heavier losses than it is reporting, according to investors.
For more on Ira Sohn, see which tips from 2010 paid off big—and which bombed.
