Tag: Pershing Square Capital Management

Q1 2017 Performance: Equity/Commodity Trading

In the previous two articles, I wrote about my forex trading and equity investments performance for the first quarter of this year. In this article, I will talk about my 1st quarter performance for equity/commodity trading.

For the first quarter of 2017, my active trading performance for equities and commodities (commodity ETFs) was up 3.51%.

Equity/Commodity Trading Portfolio (Robinhood) P/L
The white line represents the start of the year.

For years, I could not trade equities and commodity ETFs due to commissions. Thanks to Robinhood, I’m not able to trade for free.

My first loss came from the first trade of the year. I thought energy, especially oil would go up over the next few hours, but I was wrong. So I closed my long position on Direxion Daily Energy Bull and Bear 3X Shares (ERX) at 2.13% loss (everything was tweeted out)

A month later, I made another call on oil. This time, short oil. I went long inverse oil ETF. Here’s why I thought oil would drop;

I closed the SCO position a month later at 22.55% gain, the biggest gainer of all positions closed during the first quarter of this year.

My biggest loss came from VelocityShares Daily 2x VIX Short-Term ETN (TVIX). I thought volatility would pick up in the coming month (and it did a little bit). However, after they underwent 1:10 reverse split on March 16th, I did not want to risk having the ETN go to single digits once again, so I indeed closed the position at 17.27% loss.

In nominal terms, the 22.55% gain on SCO is 3 times larger than the 17.27 loss on TVIX.

There are other positions that made and lost money. But overall, my portfolio was up 3.51% in the 1st quarter.

Current Positions:

I can only go long securities on Robinhood. My current positions are SPXS, WFC, LULU, DIS, EXPE, VRX.

I went long on Direxion Daily S&P 500 Bill and Bear 3x Shares (SPXS), which is inverse of S&P 500, because I believe investors are underestimating the negatives of Trump’s policies. Once investors realize the negatives of Trump’s fiscal policies and/or his actual policies are less stimulative as he proposed, the market will take a dump.

A lot of people think tax rate will be reduced to 15%. I have been watching some of Trump’s TV interviews, especially on Fox News, and it seems Trump himself does not believe tax cut will be 15% or lower. He basically said it might have to be little higher, say around 20%.

I also watched Trump’s body language and I believe Trump is not confident in what he’s saying about his fiscal stimulus plan as he was during the campaign.

So when the actual plan is released, investors will be disappointed.

SPXS is also a small hedge for my portfolio as I’m long individual U.S. stocks.

I’m also long on Wells Fargo (WFC), Lulelemon Athletica (LULU). I believe the plunge on LULU is overdone and could fill half of the gap. WFC fell after the earnings report last week. General bank earnings are trending higher and Well Fargo is no different. I went long on WFC also due to technical purposes.

I’m also long on Disney (DIS). I bought just at the start of rumors that Apple (AAPL) would buy Disney.

I’m also long on Expedia (EXPE). See this awesome tweet thread.

And finally, I’m long Valeant (VRX). I went long on the pharmaceutical company the day after Bill Ackman revealed he cut his $4 billion loss.

Valeant recently extended the maturity of their debt until the early 2020s, which gives them about 5 years to restructure their capital and the company. Plus, they have over $5 in cash for each share.

Just because Ackman lost big on VRX does not mean he’s not a great investor. He is a great investor (that’s why he’s rich?). If you watch his presentations and talks, he knows about he’s talking about. He does his research and deeply cares about other people. At least that’s what I think.

The current positions I mentioned above can change at any time or reverse. Thank you.

Legendary Investor Carl Icahn Was Right Next To Me And I Didn’t Even See Him!!! (Video)

As you may know, I met legendary investor Bill Ackman (Short Herbalife) in the first half of this year. He was taller and bulkier than I expected. Ackman speaks in a soft voice (to strangers of course) and has a firm handshake. My tiny hands were nothing compared to the strong hands of Mr. Bill Ackman.

Great meeting with Mr. Bill Ackman, Founder and CEO of Pershing Square Capital Management
Great meeting with Mr. Bill Ackman, Founder and CEO of Pershing Square Capital Management

In case you don’t know, Ackman is one of the world’s most famous hedge fund managers and activist investors. Pershing Square Capital Management net return was 40.4% in 2014, the highest among its peers. Since inception in 2004, Pershing Square posted net gains of 567.1% versus 135.3% return for the S&P 500. The hedge fund’s 1.5% base fee and 16% performance fee is low relative to industry standards.

Last Tuesday (September 13th), another legendary investor Carl Icahn (Long Herbalife) was right next to me at the Delivering Alpha and I didn’t even see him.

Yes, I know!!! Oh my god.

In case you don’t know, Icahn is one of the world’s most famous hedge fund managers and activist investors. As the chairman of Icahn Enterprises LP, Icahn says “Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity” according to his Twitter bio. I love that quote.

How did this happen? During a coffee break before Stephen Schwarzman – Chairman, CEO, and Co-Founder of Blackstone (another legend) – was due to speak in front of investors, press, students (me unfortunately), etc…I lost my focus.

How did I lose my focus? I wanted to be on the cover of Institutional Investor magazine. Well, not the real magazine. There was a photo booth at the conference.

Why was the fake magazine cover so important? Besides being in love with finance, I wanted to get a picture of my handsomeness. Someone who works for NBC even told me I was handsome when I was leaving the event. My response was “I always look handsome” which is a fact.

…So here I am, stepping on the booth while Icahn is just passin’ by!

Baby Boy right to the Crazy Old Man
The legend is on the left. I’m on the right. Is Icahn looking at me?

I was 5-10ft away from the man I admire and I didn’t even see him. I didn’t even notice the cameraman with a strong lighting. I noticed nothing. I was thinking about how I made it to the cover of Institutional Investors magazine and Forbes is next.

Here is the video of me on CNBC for the first time and Carl Icahn on the same screen.

I messed up…for this handsome picture of myself.

Khojinur Usmonov on the cover of Institutional Investors magazine.
Khojinur Usmonov on the cover of Institutional Investors magazine.

Although I didn’t see Icahn there, I did see him on stage after the interview of Schwarzman with CNBC’s Becky Quick.

Schwarzman Interview at the 6th Annual Delivering Alpha:

Great summary of the interview can be found on the Institutional Investor’s website.

BECKY QUICK: I think Blackstone has gone from something around $35 to around $26 over the course of the last year. Why is that? What is that a reflection of?

STEPHEN SCHWARZMAN: That’s a reflection that investors are wrong.

I love the sarcasm.

STEPHEN SCHWARZMAN: I don’t want to be selling an asset that’s gone down because the world has gone down. If it’s a wonderful company, if I want to sell it, I’d sell it after everything goes well.

What Schwarzman is trying to say is…

“Investing is the only business I know that when things go on sale, people run out of the store” – Mark Yusko

Here comes Carl Icahn on stage:

Everybody excited. Their phones are out. Chairs are being moved to get a better angle of the legend.

img_5222
Carl Icahn, Icahn Enterprises chairman during his keynote at the 6th annual CNBC Institutional Investor Delivering Alpha Conference

And no, Bill Ackman did not show up again.

Transcript of the CNBC interview with Icahn can be found on CNBC’s website.

CARL ICAHN: I think Ackman’s a smart guy.

CARL ICAHN: and, again, I think Ackman’s smart

CARL ICAHN: I really think he’s [BILL ACKMAN] a smart guy.

CARL ICAHN: I sort of like him [BILL ACKMAN]. I think he’s smart.

CARL ICAHN: I really believe Ackman being smart

I also think/believe Ackman is smart and so is Icahn.

I didn’t know Icahn was right next to me until I came home. At around 8:40 P.M, I come home. Until 10:24 P.M, I eat my dinner and some snacks, while checking emails and twitter, and reading news.

At 10:24 P.M, I’m scrolling through @CNBCnow twitter and that’s when I saw the video. My reaction was too graphic to describe it here.

The rest is history.

Delivering Alpha 2016 is one of the moments I will forever remember. I really enjoyed the conference and meeting people from the media and hedge fund world.

Although I came late to the conference, at around 1:40 P.M, and missed Ray Dalio, the experience was still amazing. Not just amazing, but also incredible, stunning, astonishing, etc.

Delivering alpha as a concept is all about beating the market. Over the past six years, the investment conference has brought many great investors who got a track record of actually delivering alpha to speak in front of audience.

CNBC and Institutional Investor hosted the annual Delivering Alpha conference at NYC’s Piere Hotel.

I will forever remember this day, September 13, 2016.

What’s Next?

So far I met Ben Bernanke, Marcus Lemonis, Chamath Palihapitiyaa (CEO of Social Capital), Bill Ackman, and Carl Icahn. Who’s the next high-profile person I will meet? Janet Yellen? Mario Draghi? Warren Buffett? Stay tuned.

So far I made it to Bloomberg (for real) and Institutional Investors (literally), what’s next? Forbes? WSJ? Time Person of the Year? Stay tuned.

It’s only matter of time before I’m on stage at the Delivering Alpha and media asks me questions. Stay tuned.