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."
She lived with us for 56 years. She raised me and my siblings without pay. I was 11, a typical American kid, before I realized who she was.
The ashes filled a black plastic box about the size of a toaster. It weighed three and a half pounds. I put it in a canvas tote bag and packed it in my suitcase this past July for the transpacific flight to Manila. From there I would travel by car to a rural village. When I arrived, I would hand over all that was left of the woman who had spent 56 years as a slave in my family’s household.
New Orleans Mayor Mitch Landrieu explains to his city why four monuments commemorating the Lost Cause and the Confederacy had to come down.
Last week, the City of New Orleans finished removing four monuments—to Confederate President Jefferson Davis, Generals P.G.T. Beauregard and Robert E. Lee, and the postwar battle of Liberty Place. The removals occasioned threats, protests, and celebrations. On Friday, Mayor Mitch Landrieu explained to his city why he had concluded that the monuments needed to come down.
The soul of our beloved City is deeply rooted in a history that has evolved over thousands of years; rooted in a diverse people who have been here together every step of the way—for both good and for ill.
The condition has long been considered untreatable. Experts can spot it in a child as young as 3 or 4. But a new clinical approach offers hope.
This is a good day, Samantha tells me: 10 on a scale of 10. We’re sitting in a conference room at the San Marcos Treatment Center, just south of Austin, Texas, a space that has witnessed countless difficult conversations between troubled children, their worried parents, and clinical therapists. But today promises unalloyed joy. Samantha’s mother is visiting from Idaho, as she does every six weeks, which means lunch off campus and an excursion to Target. The girl needs supplies: new jeans, yoga pants, nail polish.
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At 11, Samantha is just over 5 feet tall and has wavy black hair and a steady gaze. She flashes a smile when I ask about her favorite subject (history), and grimaces when I ask about her least favorite (math). She seems poised and cheerful, a normal preteen. But when we steer into uncomfortable territory—the events that led her to this juvenile-treatment facility nearly 2,000 miles from her family—Samantha hesitates and looks down at her hands. “I wanted the whole world to myself,” she says. “So I made a whole entire book about how to hurt people.”
U.K. police said at least 22 people are dead and 59 injured following the incident at Manchester Arena.
Here’s what we know on Wednesday, May 23:
—Greater Manchester Police said 22 people are dead and 59 injured following reports of an explosion at the Manchester Arena.
—Authorities say a lone bomber, who was killed at the arena, carried out the attack. Prime Minister Theresa May said authorities believe they know his identity, but are working to confirm it. ISIS claimed responsibility—though the group’s role in the attack is unclear.
—The venue was the scene of an Ariana Grande concert. The singer said she was “broken” at the news.
—This is a developing story and we’ll be following it here. All updates are in Eastern Standard Time (GMT -4).
The office was, until a few decades ago, the last stronghold of fashion formality. Silicon Valley changed that.
Americans began the 20th century in bustles and bowler hats and ended it in velour sweatsuits and flannel shirts—the most radical shift in dress standards in human history. At the center of this sartorial revolution was business casual, a genre of dress that broke the last bastion of formality—office attire—to redefine the American wardrobe.
Born in Silicon Valley in the early 1980s, business casual consists of khaki pants, sensible shoes, and button-down collared shirts. By the time it was mainstream, in the 1990s, it flummoxed HR managers and employees alike. “Welcome to the confusing world of business casual,” declared a fashion writer for the Chicago Tribune in 1995. With time and some coaching, people caught on. Today, though, the term “business casual” is nearly obsolete for describing the clothing of a workforce that includes many who work from home in yoga pants, put on a clean T-shirt for a Skype meeting, and don’t always go into the office.
Isabel Caliva and her husband, Frank, had already “kicked the can down the road.” The can, in their case, was the kid conversation; the road was Caliva’s fertile years. Frank had always said he wanted lots of kids. Caliva, who was in her early 30s, thought maybe one or two would be nice, but she was mostly undecided. They had a nice life, with plenty of free time that allowed for trips to Portugal, Paris, and Hawaii.
“I wasn’t feeling the pull the same way my friends were describing,” she told me recently. “I thought, maybe this isn’t gonna be the thing for me. Maybe it’s just going to be the two of us.”
At times, she wondered if her lack of baby fever should be cause for concern. She took her worries to the Internet, where she came across a post on the Rumpus’ “Dear Sugar” advice column titled, “The Ghost Ship that Didn’t Carry Us.” The letter was from a 41-year-old man who was also on the fence about kids: “Things like quiet, free time, spontaneous travel, pockets of non-obligation,” he wrote. “I really value them.”
The president’s critics are dipping into his vast Twitter archive to find evidence of hypocrisy—and maybe even fortune telling.
Donald Trump doesn’t need a crystal ball, he has a mysterious glowing orb. No, wait. Scratch that. Donald Trump doesn’t need a crystal ball, he has a mysterious clairvoyant Twitter account.
There seems to be, Trump watchers have noticed, a weirdly prophetic tweet in Trump’s past for every new aspect of his presidency—from his weekends golfing at Mar-a-Lago to each new bombshell scoop about the embattled White House and its alleged ties to Russia.
This goes beyond using classic Trump tweets to insult him, though people are doing that, too—the prototypical example comes from June 2014, when Trump tweeted, “Are you allowed to impeach a president for gross incompetence?”
Trump’s critics are now delighting in the ability to criticize Trump by using his own targeted complaints about others. His past tweets underscore stupendous hypocrisy, they say, and perhaps a hint at an epic political downfall. Democrats have been agitating for Trump’s political demise since before he was the Republican nominee, but even the most apolitical observer would acknowledge how uncanny some of Trump’s past tweets have become.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
It may be Trump’s proposal, but his first fiscal blueprint reflects the vision of the House Freedom Caucus co-founder, and the president has left the sales job to him.
The budget proposal the White House will deliver to Congress on Tuesday might carry Donald Trump’s name, but it reflects Mick Mulvaney’s fiscal vision.
The president has been uncharacteristically quiet on the most expansive policy statement of his young administration, ceding responsibility for both its substance and message to his staunchly conservative budget director.
And Mulvaney has certainly run with the assignment. The former congressional spending hawk has affixed the presidential seal to a wish list of ideological budget cuts—to the State Department, the EPA, and the social safety net, among many others—that only a few years ago had been marginalized even in the Republican-led House. “This is, I think, the first time in a long time that an administration has written a budget through the eyes of the people who are actually paying the taxes,” Mulvaney told reporters on Monday by way of explaining the budget’s core philosophy, which he described more succinctly as “Taxpayer First.” “Too often in Washington we only look at the recipient side: How does the budget affect either those who receive or don’t receive benefits.”