Today, hedge fund bigwigs Bill Ackman and Carl Icahn delivered the most engaging TV smackdown in recent memory on CNBC.
Here's a story about two hedge funders who hate each other. It's also a story about whether or not a multi-billion-dollar nutrient company is actually a pyramid scheme.
Back in December, activist investor Bill Ackman gave the Powerpoint presentation to end all Powerpoint presentations -- it was 342 slides long -- about why he thought Herbalife, a company better known for weight-loss shakes and other assorted non-goodies, was doomed. The 1-slide version of his argument is that its web of distributors make more from recruiting new distributors than they do from actually selling products, making it less an Amway-style legal pyramid scheme, and more an illegal one. Ackman went short the stock -- in other words, he bet its price would go down by selling high and trying to buy low -- and very publicly said he expected it to go to zero.
Betting against a stock is a bit more involved than betting on it, because you can't exactly bet against something you own. Short-sellers have to first borrow the stock, then sell it, and hope to buy it back later at a lower price before returning it to the original owner. It's a risky game -- the stock can only go down so far, but it can go up an unlimited amount -- and Ackman seems to be playing a particularly risky version of it. He's short roughly 20 percent of the outstanding shares, which means he'll have a lot of stock to buy back that he might have trouble finding if, say, the price goes up and he tries to cut his losses.
That brings us to the billionaire battle. Activist investors aren't always the best of friends, and that's certainly the case when it comes to Carl Icahn and Bill Ackman. The two of them fought a seven-year legal battle over whether Icahn owed Ackman $4.5 million, a relative pittance in the rarefied air of Hedgistan, from the 2004 merger-sale of a real estate company -- a battle that Ackman ultimately won. That bad blood has carried over to Herbalife. Icahn thinks Ackman is just using his big media profile to make an easy buck manipulating the stock down, and that he's doing so in a way that could leave him very exposed. If other investors buy the stock for the express purpose of hurting his trade, Ackman might have to cover his large short position, which would send the stock racing up in a so-called "short-squeeze". Now, it's not clear Icahn is doing this ... but it certainly seems like a good bet.
Another good bet is that watching the two of them got at it on live television would be magical. It was. CNBC had the pair on, as you can see in the video below, and Icahn did not disappoint. This was tough, but here are his seven craziest quotes.
"I want to say what I want to say, and I'm not going to talk about my Herbalife position because you want to bully me ... So let's start with what I want to say. Ackman is a liar."
Discourse even more elevated.
"He wanted to have dinner once with me, and I had dinner with me. And I'll tell you, I laughed. I couldn't figure out if he was the sanctimonious guy I ever met in my life or the most arrogant."
Do these have to be mutually exclusive?
"I wouldn't have an investment with Ackman if you paid me to do it; if Ackman paid me to do it .... As far as I'm concerned, the guy is a major loser. You know, Disraeli once said, Disraeli once said about somebody that spoke in the Parliament, a young guy that spoke in the Parliament, 'Young man, I'd be happy if I could be as sure about one thing in my life as you are sure of everything.'"
"Ackman did it, look at the timing. Ackman did it with a week to go, or a month to go before he had to show his results. His results were bad for 2012, and this got his results up double, so he could get fees for himself. And then he talks about [giving these profits to] charity. That's complete bulls***."
Oops, live TV!
"I never said that I want to be friends with you Bill. I wouldn't be friends with you. And you said to me, you'd like to be friends so we could invest together .... I wouldn't invest with you if you were the last man on earth."
"I appreciate, Bill, that you called me a great investor. I thank you for that. Unfortunately, I can't say the same for you."
Give this man a mic to drop.
Okay, that was fun, but it's time for a serious point. Markets are mostly efficient, except when they're not. As Keynes, who knew a thing or two about picking stocks, pointed out, the market can be a bit like a newspaper beauty contest where you pick the six prettiest faces from a list of 100, and the winner is the one whose picks come closest to the most popular of the combined picks. But this means your optimal strategy is picking the faces you think other people think are the prettiest, not the ones you think are the prettiest. In other words, you're betting based on the crowd, and not the "fundamentals". It's the same with stocks, even before we consider hedge fund billionaires using a nutrient supplement company's stock to settle their grudge match.
Or, as Disraeli might have said, there are lies, damn lies, and efficient markets.
"[Ackman's] like the crybaby in the schoolyard. You know, I went to a tough school in Queens, and they used to beat up the little Jewish boys. And [Ackman] was like one of these little Jewish boys, crying that the world was taking advantage of him."
The long-running cartoon’s representation of Judaism was one of the first on television.
Growing up in south London, and then in the largely Catholic town of Manhasset on Long Island, I didn’t encounter many families who looked, sounded, or behaved like mine. In England, my experiences were limited to either my mother’s family, who were all Orthodox Jews, strictly observing the Sabbath and keeping kosher, and to the families of my classmates, who were invariably all gentiles. In Manhasset, I didn’t even have the Orthodox to relate to. So one of my main comforts in both places came from the Pickles family, who—with its big-haired, neurotic, doting mother and its old-world, Yiddish-mumbling grandparents—instantly made me feel at home. It also helped that I could spend time with the Pickles family whenever I wanted; after all, they were on TV.
The president’s unique approach to the White House Correspondents’ Dinner will surely be missed.
No U.S. President has been a better comedian than Barack Obama. It’s really that simple.
Now that doesn’t mean that some modern-day presidents couldn’t tell a joke. John F. Kennedy, Ronald Reagan, and Bill Clinton excelled at it. But Obama has transformed the way presidents use comedy—not just engaging in self-deprecation or playfully teasing his rivals, but turning his barbed wit on his opponents.
He puts that approach on display every year at the White House Correspondents’ Dinner. This annual tradition, which began in 1921 when 50 journalists (all men) gathered in Washington D.C., has become a showcase for each president’s comedy chops. Some presidents have been bad, some have been good. Obama has been the best. He’s truly the killer comedian in chief.
It’s a paradox: Shouldn’t the most accomplished be well equipped to make choices that maximize life satisfaction?
There are three things, once one’s basic needs are satisfied, that academic literature points to as the ingredients for happiness: having meaningful social relationships, being good at whatever it is one spends one’s days doing, and having the freedom to make life decisions independently.
But research into happiness has also yielded something a little less obvious: Being better educated, richer, or more accomplished doesn’t do much to predict whether someone will be happy. In fact, it might mean someone is less likely to be satisfied with life.
That second finding is the puzzle that Raj Raghunathan, a professor of marketing at The University of Texas at Austin’s McCombs School of Business, tries to make sense of in his recent book, If You’re So Smart, Why Aren’t You Happy?Raghunathan’s writing does fall under the category of self-help (with all of the pep talks and progress worksheets that that entails), but his commitment to scientific research serves as ballast for the genre’s more glib tendencies.
Two scholars discuss the ups and downs of life as a right-leaning professor.
“I don’t think I can say it too strongly, but literally it just changed my life,” said a scholar, about reading the work of Ayn Rand. “It was like this awakening for me.”
Different versions of this comment appear throughout Jon A. Shields and Joshua M. Dunn Sr.’s book on conservative professors, Passing on the Right, usually about people like Milton Friedman and John Stuart Mill and Friedrich Hayek. The scholars they interviewed speak in a dreamy way about these nerdy celebrities, perhaps imagining an alternate academic universe—one where social scientists can be freely conservative.
The assumption that most college campuses lean left is so widespread in American culture that it has almost become a caricature: intellectuals in thick-rimmed glasses preaching Marxism on idyllic grassy quads; students protesting minor infractions against political correctness; raging professors trying to prove that God is, in fact, dead. Studies about professors’ political beliefs and voting behavior suggest this assumption is at least somewhat correct. But Shields and Dunn set out to investigate a more nuanced question: For the minority of professors who are cultural and political conservatives, what’s life actually like?
Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them.
Since 2013,the Federal Reserve Board has conducted a survey to “monitor the financial and economic status of American consumers.” Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?
San Diego police believe they’ve finally cracked the case of a 14-year-old girl murdered in 1984. But what if they’re wrong?
The rapping of knuckles on wood brought Kevin Brown to his front door on the morning of January 9, 2014. The uniformed detectives standing on his doorstep introduced themselves as Michael Lambert and Lori Adams of the San Diego Police Department. Lambert looked familiar to Brown, who had worked for the department as a crime-lab analyst from 1982 until his retirement, in 2002. The detectives said they wanted to discuss an old case with Brown, and he invited them in.
Stepping into the living room, the two detectives sat down in chairs and faced Brown, who perched himself in the middle of a burgundy leather couch. At 61, he was tall, with wire-rimmed glasses and a retreating halo of grayish curly hair. They were briefly joined by Brown’s wife, Rebecca, a teacher at a Catholic high school. The detectives’ visit constituted more excitement than the Browns typically saw of late: Many of the couple’s activities centered on church or Rebecca’s work. Rebecca, who was vivacious and talkative, directed school plays; the more reserved Kevin liked to fish and garden. The two took ballroom-dance classes, traveled abroad, and hiked together. “We were just a standard, boring couple living in the suburbs, tending to our stray cats, roses, and each other,” Rebecca told me.
A professor of cognitive science argues that the world is nothing like the one we experience through our senses.
As we go about our daily lives, we tend to assume that our perceptions—sights, sounds, textures, tastes—are an accurate portrayal of the real world. Sure, when we stop and think about it—or when we find ourselves fooled by a perceptual illusion—we realize with a jolt that what we perceive is never the world directly, but rather our brain’s best guess at what that world is like, a kind of internal simulation of an external reality. Still, we bank on the fact that our simulation is a reasonably decent one. If it wasn’t, wouldn’t evolution have weeded us out by now? The true reality might be forever beyond our reach, but surely our senses give us at least an inkling of what it’s really like.
...isn't something that can be done on campus. It's an internship.
When I was 17, if you asked me how I planned on getting a job in the future, I think I would have said: Get into the right college. When I was 18, if you asked me the same question, I would have said: Get into the right classes. When I was 19: Get good grades.
But when employers recently named the most important elements in hiring a recent graduate, college reputation, GPA, and courses finished at the bottom of the list. At the top, according to the Chronicle of Higher Education, were experiences outside of academics: Internships, jobs, volunteering, and extracurriculars.
What Employers Want
"When employers do hire from college, the evidence suggests that academic skills are not their primary concern," says Peter Cappelli, a Wharton professor and the author of a new paper on job skills. "Work experience is the crucial attribute that employers want even for students who have yet to work full-time."
After the successful Allied invasions of western France, Germany gathered reserve forces and launched a massive counter-offensive in the Ardennes, which collapsed by January. At the same time, Soviet forces were closing in from the east, invading Poland and East Prussia. By March, Western Allied forces were crossing the Rhine River, capturing hundreds of thousands of troops from Germany's Army Group B. The Red Army had meanwhile entered Austria, and both fronts quickly approached Berlin. Strategic bombing campaigns by Allied aircraft were pounding German territory, sometimes destroying entire cities in a night. In the first several months of 1945, Germany put up a fierce defense, but rapidly lost territory, ran out of supplies, and exhausted its options. In April, Allied forces pushed through the German defensive line in Italy. East met West on the River Elbe on April 25, 1945, when Soviet and American troops met near Torgau, Germany. Then came the end of the Third Reich, as the Soviets took Berlin, Adolf Hitler committed suicide on April 30, and Germany surrendered unconditionally on all fronts on May 8 (May 7 on the Western Front). Hitler's planned "Thousand-Year Reich" lasted only 12 incredibly destructive years. (This entry is Part 17 of a weekly
“A typical person is more than five times as likely to die in an extinction event as in a car crash,” says a new report.
Nuclear war. Climate change. Pandemics that kill tens of millions.
These are the most viable threats to globally organized civilization. They’re the stuff of nightmares and blockbusters—but unlike sea monsters or zombie viruses, they’re real, part of the calculus that political leaders consider everyday. And according to a new report from the U.K.-based Global Challenges Foundation, they’re much more likely than we might think.
In its annual report on “global catastrophic risk,” the nonprofit debuted a startling statistic: Across the span of their lives, the average American is more than five times likelier to die during a human-extinction event than in a car crash.
Partly that’s because the average person will probably not die in an automobile accident. Every year, one in 9,395 people die in a crash; that translates to about a 0.01 percent chance per year. But that chance compounds over the course of a lifetime. At life-long scales, one in 120 Americans die in an accident.