by Travis Johnson, Stock Gumshoe | October 17, 2014 4:01 pm
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This is just what I needed, Travis. as I have been laboring over what to do with cash from recent sales of Durata Theraputics & Lakeland Industries. The last time I met with my accountant, he asked if I am a day trader. Obviously, I need to surrender some of the control as there is plenty of emotion that goes into my trading habits. Have a great weekend!
Thanks Travis. Greenlight recently said that although 2 months ago Einhorn was having difficulty finding new opportunities, now, given the current turmoil in the markets, this is changing quickly, and new positions may be bought. A good example your strategy of having an expert managing money for GLRE holders.
Excellent article, Travis. Thanks for sharing the details of your investment philosophy. Do you think it would be prudent to purchase and hold these lower-turnover (types of) income investments in an IRA account?
I hold some of them in IRA accounts, though they might not get much in the way of a tax advantage in such accounts. To me, usually tax-deferred or nontaxed (Roth) retirement accounts look more appealing for funds or trading strategies with higher turnover and more short-term capital gains tax liabilities, or high current income (like REITs or bonds, not qualified dividends), but everyone’s tax situation and portfolio composition is different.
Speaking of IRAs, I have several BDCs in my account, and they are all down to much less than my purchase price. Can anyone explain this? At first I thought it might be the fear of rising interest rates, but now that seems it would not be the case.
I admit I was a little too lazy to research this in any great depth, but why did Ackman list on Euronext instead of one of the US exchanges? Given the guy’s sophistication, I can’t imagine the US securities regime scared him away from a complexity/cost standpoint. And given the listing, what do you mean by the statement that the shares are intended for accredited investors/qibs? I can’t imagine Euronext can effectively regulate (or more accurately would be willing to regulate) the buyers in the stock. I haven’t poked around to see whether I can buy Euronext shares on my brokerage accounts.
I get the rationale for buying any one of these three, but my concern has always been that these are a pet project for these guys. Financially, there does not seem to be huge incentives compared with their hedge funds / net worth (at least with respect to Einhorn based on his % ownership and the fee structure ). I have been watching GLRE but have not been able to get myself to pull the trigger.
He listed in Euronext because US-listed funds aren’t allowed to charge an incentive fee — London would have been the other viable option.
The tightest connection in reinsurance is with Einhorn, since he’s also Chair of GLRE in addition to investment manager. Loeb is less directly tied to TPRE management.
These vehicles are valuable to the managers because they are permanent capital, but the capital isn’t really treated differently than their other investment capital (with some exceptions to manage insurance claims on the float) they are designed to effectively mimic the hedge fund portfolios so in Ackmans case the fund will just be the same as his other hedge funds … same allocations, no real additional work required.
How do you buy psh.as? Neither Fidelity nor TD Ameritrade appear to recognize the symbol.
It’s not a US symbol — .AS is how Yahoo Finance designates Amsterdam-listed shares on the Euronext exchange. There is no pink sheets symbol for Pershing Square Holdings as of yet to facilitate small investors trading them in the US (there might be a “grey sheets” listing eventually), so these shares can only be traded in Europe. Fidelity can buy them for you in Amsterdam, but unless you’re signed up for the foreign trading services (offered for non-IRA accounts at Fidelity) they offer they won’t let you do it online, and there may be additional commissions if you have to call and have them do it for you.
I used Interactive Brokers for my Pershing Square Holdings buy on the Euronext, that’s my favorite low-cost trading platform for foreign equities, but it’s not as simplified or user-friendly an interface as most US discount brokers — every broker does international trading differently, some don’t offer it at all and others offer it as an add-on or separate service online or as a telephone-only service. Always check on commissions and fees for this kind of international trading, for some brokers they’re huge so it would only make sense if you’re extremely compelled to buy a position or are making large trades that dwarf the fees.
I have the same question as Chris but now there is a pink sheet OTC listing
for Pershing Square Holdings after the Amsterdam IPO. There is Trading Volume
in the thousands.
The ticker is PSHXF.
Travis, Would you recommend it as I cannot buy it on the Euronext ?
THE DUTCHMAN
I’ve bought some both direct and on the pink sheets, as long as you can be patient with a buy order until you get a fair price and don’t ever need to sell in a hurry (which can be hard to predict) the pink sheets are fine by me. I think it’s PSHZF. Do note something I didn’t mention above: this is a PFIC, so if it’s not in an IRA you’ll want to consider making an annual QEF election. Pershing says they’ll give you the info you need to do that, but you’ll have to request it.
Thanks a lot Travis.
You’re right — the ticker is PSHZF.
I will buy some for my IRA.
Oh Travis your knowledge is so invaluable. I recently opened an acct with IB and yes it was somewhat difficult but well worth it. Am doing much better now and it goes faster now. I was able to put in an order for pershing square on euronext and it wasn’t hard at all, quite awesome in fact when you think about it. I see that the Oct ipo was at 22 and is now at 25.15 usd. About 14.3%. And only a $5 transaction fee(est) Not bad, not bad at all. This stuff is awesome, and I’m lovin’ it (many smiles) more every day and mostly thanks to the unhyped info on StockGumshoe. The best investment I ever made
Thanks Alan, I hope it works out for you. I imagine PSH will fluctuate quite a bit, since the portfolio is so concentrated and Ackman such a press-generator, but we’ll see — they just released their October report, NAV on Halloween was $25.35. Herbalife keeps going down, Allergan near new highs, Pershing’s certainly having a good year so far.