Harbinger restricts investor withdrawals
Mon Dec 29, 2008 2:36pm GMT
NEW YORK (Reuters) - Harbinger Capital Partners is limiting year-end withdrawals from investors in its biggest hedge fund, according to Bloomberg, citing people familiar with the matter.
The investment firm, based in New York and run by Philip Falcone, is restricting redemptions in its $10 billion (6.8 billion pound) Harbinger Capital Partners Master Fund to 60 percent to 70 percent of the $3.5 billion requested by investors, the news service reported.
The fund is down 23 percent for the year through November, although at the end of June it was up 43 percent for the year, according to Bloomberg.
Harbinger will also separate the fund's private equity holdings, which make up about 15 percent of assets, into a segregated account to avoid selling them at distressed prices, Bloomberg said.
A spokesman for Harbinger declined comment.
The hedge fund industry is facing its worst year ever with heavy losses prompting large numbers of investors to request their money back.
Harbinger joins an increasing number of funds that have imposed restrictions on investor redemptions.
http://uk.reuters.com/articlePrint?articleId=UKLNE4BS02W20081229
Tuesday, December 30, 2008
Monday, December 29, 2008
Jim Rogers calls bottom for the airlines sector
Jim Rogers calls bottom for the airlines sector
Mon Dec 15, 2008 12:40pm EST
LONDON, Dec 15 (Reuters) - Jim Rogers, one of the world's best known investors, has said the world's publicly listed airlines may have reached a bottom after a prolonged struggle against high oil prices and the economic downturn.
Launching a new airline stock index with Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Rogers said the volume of airline bankruptcies, lower capacity and falling oil prices could see more prominent carriers prosper.
"The airline industry has been a nightmare for several years now, with dozens of airlines going bankrupt ... That is often the sign of a bottom," he said in a statement.
"Capacity is shrinking at some airlines, while there will always be demand for seats. Many managements have now learned the lessons of the past decades," he added.
The Rogers Airlines Index will be composed of 20 global airline stocks.
http://www.reuters.com/articlePrint?articleId=USLF27345620081215
Mon Dec 15, 2008 12:40pm EST
LONDON, Dec 15 (Reuters) - Jim Rogers, one of the world's best known investors, has said the world's publicly listed airlines may have reached a bottom after a prolonged struggle against high oil prices and the economic downturn.
Launching a new airline stock index with Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Rogers said the volume of airline bankruptcies, lower capacity and falling oil prices could see more prominent carriers prosper.
"The airline industry has been a nightmare for several years now, with dozens of airlines going bankrupt ... That is often the sign of a bottom," he said in a statement.
"Capacity is shrinking at some airlines, while there will always be demand for seats. Many managements have now learned the lessons of the past decades," he added.
The Rogers Airlines Index will be composed of 20 global airline stocks.
http://www.reuters.com/articlePrint?articleId=USLF27345620081215
Tuesday, December 16, 2008
Rogers buys oil last week as price drops
Rogers buys oil last week as price drops
Thu Dec 11, 2008 12:49pm EST
By Herbert Lash
NEW YORK (Reuters) - Renowned commodities investor Jim Rogers said on Thursday that he bought oil last week as crude prices collapsed to near four-year lows and that the world is running out of known oil reserves.
Rogers told the Reuters Investment Outlook Summit in New York that he also closed his bets against the U.S. stock market in October, and plans to use the dollar's rally as an opportunity to exit dollar-denominated assets.
Rogers, who spoke via a conference call from Miami, said he is the world's worst market timer and a horrible short-term trader, but a sharp sell-off in oil prices suggested a bottom.
"Oil collapsed last week. Whenever you've had that sort of selling climax throughout any period in history, you are usually well-rewarded to buy it. It may not be the final bottom, but a bottom, so I'm buying oil again," he said.
Rogers, who remains bullish on commodities, estimated known world oil reserves at today's consumption rate are about 16 years, which indicates crude prices will again trend higher.
"We're going to see $200 oil at some point, it may be by 2013. It's a sad fact but the world is running out of known oil," he said.
Many of Rogers's investments reflect a bearish view of the U.S. economy, which he said is poised to enter a period of stagnation, just as Japan suffered during its "lost decade" in the 1990s.
Rogers rose to fame in the investment world as co-founder with George Soros the Quantum Fund in 1970. The fund returned 4,200 percent over the next decade, compared with a 50 percent gain in the S&P 500 index.
"We have unbelievable mistakes every week coming out of Washington, just as Japan did in the 1990s, just as America did in the 1930s," he said. "This could turn into a gigantic mess."
Rogers attributed his grim outlook to worries about the size of the U.S. government's growing deficit and the unwillingness on the part of authorities to let banks fail. He said he expected the U.S. economy to be in bad shape for a considerable time.
"I am most worried about the United States and what's going on," said Rogers, who said he is proud to be American but he has serious doubts about the country's future.
Rogers also said he covered most of his bets that the U.S. stock market would decline in October, when "that too felt like a selling climax," he said.
He also said he plans to get out of U.S. securities he's owned for more than two decades if there is a rally soon.
"The market will probably rally for a while into January or March, and then we'll have more problems next year and perhaps into 2010," he said.
"I plan to get out of all of my U.S. dollars at some time throughout this rally. The dollar is a terribly flawed currency, and perhaps a doomed currency," he said.
Rogers said that he is investing on growth areas in China and Taiwan, such as shares in water treatment, tourism and agriculture.
He is bullish on Asia because the region has savers and thus creditor nations.
"This is where the money is, and throughout history the world has moved to where the money is," he said.
"To me it's incomprehensible that people would lend to the United States government for 30 years at 3 or 4 percent," he added.
Rogers sold his New York mansion in December and has been living in Singapore. He is long-term bull on China, where he first traveled on motorcycle in the early 1980s. He again traveled on motorcycle through China and six continents a decade later, a trip that formed his book "Investment Biker."
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA4HD20081211
(Reporting by Herbert Lash, Editing by Tom Hals)
Thu Dec 11, 2008 12:49pm EST
By Herbert Lash
NEW YORK (Reuters) - Renowned commodities investor Jim Rogers said on Thursday that he bought oil last week as crude prices collapsed to near four-year lows and that the world is running out of known oil reserves.
Rogers told the Reuters Investment Outlook Summit in New York that he also closed his bets against the U.S. stock market in October, and plans to use the dollar's rally as an opportunity to exit dollar-denominated assets.
Rogers, who spoke via a conference call from Miami, said he is the world's worst market timer and a horrible short-term trader, but a sharp sell-off in oil prices suggested a bottom.
"Oil collapsed last week. Whenever you've had that sort of selling climax throughout any period in history, you are usually well-rewarded to buy it. It may not be the final bottom, but a bottom, so I'm buying oil again," he said.
Rogers, who remains bullish on commodities, estimated known world oil reserves at today's consumption rate are about 16 years, which indicates crude prices will again trend higher.
"We're going to see $200 oil at some point, it may be by 2013. It's a sad fact but the world is running out of known oil," he said.
Many of Rogers's investments reflect a bearish view of the U.S. economy, which he said is poised to enter a period of stagnation, just as Japan suffered during its "lost decade" in the 1990s.
Rogers rose to fame in the investment world as co-founder with George Soros the Quantum Fund in 1970. The fund returned 4,200 percent over the next decade, compared with a 50 percent gain in the S&P 500 index.
"We have unbelievable mistakes every week coming out of Washington, just as Japan did in the 1990s, just as America did in the 1930s," he said. "This could turn into a gigantic mess."
Rogers attributed his grim outlook to worries about the size of the U.S. government's growing deficit and the unwillingness on the part of authorities to let banks fail. He said he expected the U.S. economy to be in bad shape for a considerable time.
"I am most worried about the United States and what's going on," said Rogers, who said he is proud to be American but he has serious doubts about the country's future.
Rogers also said he covered most of his bets that the U.S. stock market would decline in October, when "that too felt like a selling climax," he said.
He also said he plans to get out of U.S. securities he's owned for more than two decades if there is a rally soon.
"The market will probably rally for a while into January or March, and then we'll have more problems next year and perhaps into 2010," he said.
"I plan to get out of all of my U.S. dollars at some time throughout this rally. The dollar is a terribly flawed currency, and perhaps a doomed currency," he said.
Rogers said that he is investing on growth areas in China and Taiwan, such as shares in water treatment, tourism and agriculture.
He is bullish on Asia because the region has savers and thus creditor nations.
"This is where the money is, and throughout history the world has moved to where the money is," he said.
"To me it's incomprehensible that people would lend to the United States government for 30 years at 3 or 4 percent," he added.
Rogers sold his New York mansion in December and has been living in Singapore. He is long-term bull on China, where he first traveled on motorcycle in the early 1980s. He again traveled on motorcycle through China and six continents a decade later, a trip that formed his book "Investment Biker."
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA4HD20081211
(Reporting by Herbert Lash, Editing by Tom Hals)
Jim Rogers using rally to exit dollar assets
Jim Rogers using rally to exit dollar assets
Thu Dec 11, 2008 12:08pm EST
By Vivianne Rodrigues
NEW YORK (Reuters) - Investor Jim Rogers said on Thursday he has been using the sharp rally in the U.S. dollar as an opportunity to exit assets denominated in the U.S. currency.
Rogers told the Reuters Investment Outlook Summit 2009 in New York that the rally -- which has pushed the greenback up about 20 percent since July -- is a reversal of a "gigantic short position" accumulated over several years and not a result of a fundamental bet. He added the U.S. currency is likely to weaken sharply again.
"I plan to get out of all of my U.S. dollars at some time throughout this rally," he said. "The dollar is a terribly flawed currency, and perhaps a doomed currency."
"I've driven around the world looking for a sound currency. There aren't any.... but the yen is the only thing that's going to go up for a while," he added.
Rogers, who spoke via a conference call from Miami, also noted that economies and currencies in regions such as Central Europe and Russia are particularly vulnerable.
On Thursday, the Russian central bank allowed the fifth one percent devaluation in the rouble against the dollar/euro basket in a month as data showed a $17.9 billion drop in gold and foreign exchange reserves last week.
"Russia is a disaster that is spiraling down to a catastrophe. I wouldn't put a penny of my money into Russia right now," he said.
Rogers said he expects the economic situation to deteriorate not only in Russia but in Central Europe, which in turn may weigh further on the euro zone.
"Central Europe is a giant fiasco -- hundreds of billions of dollars were floated using the Swiss franc and Japanese yen because rates were so low -- You've got some huge huge problems coming out," he said. "Banks there aren't writing them down yet."
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA57K20081211
Thu Dec 11, 2008 12:08pm EST
By Vivianne Rodrigues
NEW YORK (Reuters) - Investor Jim Rogers said on Thursday he has been using the sharp rally in the U.S. dollar as an opportunity to exit assets denominated in the U.S. currency.
Rogers told the Reuters Investment Outlook Summit 2009 in New York that the rally -- which has pushed the greenback up about 20 percent since July -- is a reversal of a "gigantic short position" accumulated over several years and not a result of a fundamental bet. He added the U.S. currency is likely to weaken sharply again.
"I plan to get out of all of my U.S. dollars at some time throughout this rally," he said. "The dollar is a terribly flawed currency, and perhaps a doomed currency."
"I've driven around the world looking for a sound currency. There aren't any.... but the yen is the only thing that's going to go up for a while," he added.
Rogers, who spoke via a conference call from Miami, also noted that economies and currencies in regions such as Central Europe and Russia are particularly vulnerable.
On Thursday, the Russian central bank allowed the fifth one percent devaluation in the rouble against the dollar/euro basket in a month as data showed a $17.9 billion drop in gold and foreign exchange reserves last week.
"Russia is a disaster that is spiraling down to a catastrophe. I wouldn't put a penny of my money into Russia right now," he said.
Rogers said he expects the economic situation to deteriorate not only in Russia but in Central Europe, which in turn may weigh further on the euro zone.
"Central Europe is a giant fiasco -- hundreds of billions of dollars were floated using the Swiss franc and Japanese yen because rates were so low -- You've got some huge huge problems coming out," he said. "Banks there aren't writing them down yet."
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA57K20081211
Commodities "horribly" hit, not killed: Rogers
Commodities "horribly" hit, not killed: Rogers
Thu Dec 11, 2008 5:09pm EST
By Barani Krishnan
NEW YORK (Reuters) - Jim Rogers, the famous investor and author on commodities, said on Thursday the credit crisis has not killed the bull market in commodities as many imagined, but just dealt it a "horrible setback".
"In 1987, we had a horrible decline in the stock market. Do you think that was the end of that bull market?" Rogers asked a panel of journalists at the Reuters Investment Outlook 2009 Summit in New York.
"Remember: Commodities are essentially based on supply and demand. Now, you have demand declining but at the same time you have supply going down even more. So, we are going to have higher prices, eventually," said Rogers, who is also founder of the Rogers International Commodity Index .
The World Bank predicted in a report this week that the commodities boom of the last few years had "come to an end", and that prices of oil to agriculture will not see the record peaks of this July for at least another three years.
Some market participants say the credit crisis has also exposed the flaw in long-only commodities investing advocated by indexes like Rogers' -- where investors are advised to maintain bullish positions in energy, metals and agriculture futures, regardless of market turns, in order to profit.
The Rogers' index is down almost 40 percent on the year, after posting a 30 percent gain till July. Many of its rivals have suffered similarly, leading to suggestions that investors may be better off with strategies that allow them to also "short" - or go bearish on -- commodities when needed.
Rogers said his success as an investor came almost entirely from finding "cheap" investments and holding them for years, if not decades.
"What you do in times like these is you find and buy the things where fundamentals are unimpaired. The only thing good I know where the fundamentals are unimpaired or where they have actually improved are commodities."
"Farmers are not getting loans to buy fertilizer now. Nobody can get a loan for a zinc mine now. All the mines are either closing and the ones still in production are using their reserves. Nobody can make new oil discoveries because prices are so low."
Rogers likened the correction in commodities to the sell-offs that stocks had seen since the 1987 crash. "There were some horrible setbacks along the way. I see this as just one of those horrible setbacks."
U.S. crude oil jumped more than 10 percent to settle at $47.98 a barrel Thursday after the head of producer group OPEC called for "severe" output cuts and non-OPEC member Russia said it may help contribute to the reduction.
Rogers said it could take longer than OPEC expected for crude to return above the $70 level desired by producers.
"It can sell below the cost of production for two or three years. This is not the first time in history that it has sold below the cost of production.
But Rogers, who bought oil for the first time in 10 years last week as prices were more than $100 a barrel below July's record, admitted he was a "horrible market timer".
"The fact that this has only happened in eight or nine times in the last 150 years and the fact that it's historic does not make it any more fun," he said.
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA75H20081211
Thu Dec 11, 2008 5:09pm EST
By Barani Krishnan
NEW YORK (Reuters) - Jim Rogers, the famous investor and author on commodities, said on Thursday the credit crisis has not killed the bull market in commodities as many imagined, but just dealt it a "horrible setback".
"In 1987, we had a horrible decline in the stock market. Do you think that was the end of that bull market?" Rogers asked a panel of journalists at the Reuters Investment Outlook 2009 Summit in New York.
"Remember: Commodities are essentially based on supply and demand. Now, you have demand declining but at the same time you have supply going down even more. So, we are going to have higher prices, eventually," said Rogers, who is also founder of the Rogers International Commodity Index .
The World Bank predicted in a report this week that the commodities boom of the last few years had "come to an end", and that prices of oil to agriculture will not see the record peaks of this July for at least another three years.
Some market participants say the credit crisis has also exposed the flaw in long-only commodities investing advocated by indexes like Rogers' -- where investors are advised to maintain bullish positions in energy, metals and agriculture futures, regardless of market turns, in order to profit.
The Rogers' index is down almost 40 percent on the year, after posting a 30 percent gain till July. Many of its rivals have suffered similarly, leading to suggestions that investors may be better off with strategies that allow them to also "short" - or go bearish on -- commodities when needed.
Rogers said his success as an investor came almost entirely from finding "cheap" investments and holding them for years, if not decades.
"What you do in times like these is you find and buy the things where fundamentals are unimpaired. The only thing good I know where the fundamentals are unimpaired or where they have actually improved are commodities."
"Farmers are not getting loans to buy fertilizer now. Nobody can get a loan for a zinc mine now. All the mines are either closing and the ones still in production are using their reserves. Nobody can make new oil discoveries because prices are so low."
Rogers likened the correction in commodities to the sell-offs that stocks had seen since the 1987 crash. "There were some horrible setbacks along the way. I see this as just one of those horrible setbacks."
U.S. crude oil jumped more than 10 percent to settle at $47.98 a barrel Thursday after the head of producer group OPEC called for "severe" output cuts and non-OPEC member Russia said it may help contribute to the reduction.
Rogers said it could take longer than OPEC expected for crude to return above the $70 level desired by producers.
"It can sell below the cost of production for two or three years. This is not the first time in history that it has sold below the cost of production.
But Rogers, who bought oil for the first time in 10 years last week as prices were more than $100 a barrel below July's record, admitted he was a "horrible market timer".
"The fact that this has only happened in eight or nine times in the last 150 years and the fact that it's historic does not make it any more fun," he said.
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA75H20081211
Jim Rogers calls most big U.S. banks "bankrupt"
Jim Rogers calls most big U.S. banks "bankrupt"
Thu Dec 11, 2008 1:53pm EST
By Jonathan Stempel
NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.
Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.
Dozens of banks have won infusions from the Troubled Asset Relief Program created in early October, just after the Sept 15 bankruptcy filing by Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz). Some of the funds are being used for acquisitions.
"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.
"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."
Rogers said he shorted shares of Fannie Mae (FNM.P: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.P: Quote, Profile, Research, Stock Buzz) before the government nationalized the mortgage financiers in September, a week before Lehman failed.
Now a specialist in commodities, Rogers said he has used the recent rally in the U.S. dollar as an opportunity to exit dollar-denominated assets.
While not saying how long the U.S. economic recession will last, he said conditions could ultimately mirror those of Japan in the 1990s. "The way things are going, we're going to have a lost decade too, just like the 1970s," he said.
Goldman Sachs & Co analysts this week estimated that banks worldwide have suffered $850 billion of credit-related losses and writedowns since the global credit crisis began last year.
But Rogers said sound U.S. lenders remain. He said these could include banks that don't make or hold subprime mortgages, or which have high ratios of deposits to equity, "all the classic old ratios that most banks in America forgot or started ignoring because they were too old-fashioned."
Many analysts cite Lehman's Sept 15 bankruptcy as a trigger for the recent cratering in the economy and stock markets.
Rogers called that idea "laughable," noting that banks have been failing for hundreds of years. And yet, he said policymakers aren't doing enough to prevent another Lehman.
"Governments are making mistakes," he said. "They're saying to all the banks, you don't have to tell us your situation. You can continue to use your balance sheet that is phony.... All these guys are bankrupt, they're still worrying about their bonuses, they're still trying to pay their dividends, and the whole system is weakened."
Rogers said is investing in growth areas in China and Taiwan, in such areas as water treatment and agriculture, and recently bought positions in energy and agriculture indexes.
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211
Thu Dec 11, 2008 1:53pm EST
By Jonathan Stempel
NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.
Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.
Dozens of banks have won infusions from the Troubled Asset Relief Program created in early October, just after the Sept 15 bankruptcy filing by Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz). Some of the funds are being used for acquisitions.
"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.
"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics."
Rogers said he shorted shares of Fannie Mae (FNM.P: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.P: Quote, Profile, Research, Stock Buzz) before the government nationalized the mortgage financiers in September, a week before Lehman failed.
Now a specialist in commodities, Rogers said he has used the recent rally in the U.S. dollar as an opportunity to exit dollar-denominated assets.
While not saying how long the U.S. economic recession will last, he said conditions could ultimately mirror those of Japan in the 1990s. "The way things are going, we're going to have a lost decade too, just like the 1970s," he said.
Goldman Sachs & Co analysts this week estimated that banks worldwide have suffered $850 billion of credit-related losses and writedowns since the global credit crisis began last year.
But Rogers said sound U.S. lenders remain. He said these could include banks that don't make or hold subprime mortgages, or which have high ratios of deposits to equity, "all the classic old ratios that most banks in America forgot or started ignoring because they were too old-fashioned."
Many analysts cite Lehman's Sept 15 bankruptcy as a trigger for the recent cratering in the economy and stock markets.
Rogers called that idea "laughable," noting that banks have been failing for hundreds of years. And yet, he said policymakers aren't doing enough to prevent another Lehman.
"Governments are making mistakes," he said. "They're saying to all the banks, you don't have to tell us your situation. You can continue to use your balance sheet that is phony.... All these guys are bankrupt, they're still worrying about their bonuses, they're still trying to pay their dividends, and the whole system is weakened."
Rogers said is investing in growth areas in China and Taiwan, in such areas as water treatment and agriculture, and recently bought positions in energy and agriculture indexes.
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211
Wednesday, December 10, 2008
Leucadia's Unmined Potential
Barron's(12/8) Leucadia's Unmined Potential
(From BARRON'S) By Andrew Bary
Leucadia National may be the closest thing to what Berkshire Hathaway was 20 years ago,before Berkshire became so large that Warren Buffett needed investments of severalbillion dollars to move the needle. Run for 30 years by a secretive duo, Ian Cumming and Joseph Steinberg, Leucadia hasinvested in a wide variety of stocks and a diverse group of businesses. It has generatedvery impressive returns and developed a cult-like following among value-orientedinvestorswho like its investment style -- and results. Buffett is a fan of Leucadia,although Berkshire doesn't own the stock. Leucadia's book value, which stood at$23 a share on Sept. 30, is up from just 11 cents in 1979, an annual growth rate of morethan 20%. Leucadia (ticker: LUK), however, has fallen 60% since Sept. 30, to about 17, leaving itway below its May peak of 57 and slashing its market value to $4.3 billion. Investorsfear that Cumming, 68, and Steinberg, 64, have lost their touch, owing to declines inmany of Leucadia's key equity holdings, including Australian iron-ore producerFortescue Metals Group (FMG.AU), securities firm Jefferies (JEF), Canada's InmetMining (IMN.T) and auto-finance outfit AmeriCredit (ACF). Many of the company's other investments are suffering, including Cresud (CRESY),an Argentine agricultural and real-estate company, and Leucadia's 10% stake in ahedge fund run by William Ackman of Pershing Square that owns a single stock, retailerTarget (TGT). Leucadia probably has lost half of the $200 million it put in the fund lastyear. Fans argue that Leucadia is oversold, noting that it rarely has traded below book inthe past decade and in recent years typically has commanded 1.5 to two times book. Thestock could hit $30 in the next year if the company's equity holdings turn aroundand if Steinberg and Cumming take advantage of the current financial distress to displaytheir old stock-picking magic. Says one Leucadia holder: "I don't think thatthey suddenly took stupid pills." Given market declines since Sept. 30,Leucadia's book value has now probably fallen closer to $20 a share. Steinberg and Cumming, who couldn't be reached for comment, focus on minimizingLeucadia's tax bill. The company now has $1.6 billion of deferred tax assets,indicating that it expects to shield some $5 billion of future profits from federalincome taxes. Strip out that tax asset to reflect no future gains, and estimated bookfalls to around $14 a share. "That's a worst-case assumption. You're notpaying much above that for the stock," says a recent Leucadia investor. Book value also may be understated because of conservative valuations for real estateand other assets the company owns, plus a potentially lucrative agreement with Fortescuethat pays Leucadia 4% of net revenues from its Australian iron-ore mine for more than adecade. The deal could produce more than $100 million of annual profits for Leucadia,assuming ore prices don't collapse. Leucadia's operating businesses, including plastics, wood products, pre-paid phonecards, as well as a Napa Valley winery and the Hard Rock Hotel & Casino in Biloxi,Miss., don't generate much profit. Investors tend to value the company on bookvalue, rather than earnings, because most of its worth lies in investments. Leucadia also has invested about $100 million for an 87% stake in a medical start-upcalled Sangart, which is developing a blood substitute now in clinical trials. There havebeen many failures in this field, but Leucadia hopes that Sangart's product,Hemospan, is a winner. Many holders simply view Leucadia as a play on Cumming and Steinberg's investmentacumen. Both intend to stay on the job for a while; their employment contracts run into2015. Some Leucadia watchers believe the company will be liquidated or sold when Cummingand Steinberg leave the scene. Like Buffett, Cumming and Steinberg believe in a strong balance sheet. As of Sept. 30,Leucadia's $8.4 billion in assets significantly exceeded its $2.6 billion in debtand other liabilities. Leucadia had about $500 million of cash and equivalents on Sept.30, down from $1.4 billion on Dec. 31. Dividends certainly aren't a drain on itscash. This year, there will be none; last year, the payout was only 25 cents a share.
Unlike Berkshire, Leucadia lacks significant operating businesses; its focus tends tobe on more speculative companies. It has paid $405 million for 32 million shares -- a 28%stake -- in AmeriCredit, which provides auto loans to those with weak credit. Reflectinga tough economy and tightness in the credit markets, AmeriCredit shares are 40% belowLeucadia's cost.
Cumming, Leucadia's chairman, and Steinberg, its president, may be thelowest-profile leaders of any sizable public company. Outside of their annual shareholderletter and appearance at the annual meeting, they stay out of public view. There are noearnings conference calls, no investor presentations and no financial guidance. There areno photographs of Cumming or Steinberg in the annual report. Hardly any analysts coverthe company because of its complexity and minimal communications. Leucadia invested in Fortescue in 2006, when founder and CEO Andrew Forrest neededmoney to build a giant mine in a remote area that would compete with Australian iron-oretitans Rio Tinto and BHP Billiton to supply the voracious Chinese steel industry.Leucadia, which initially invested $400 million, now owns 9.9% of Fortescue. Theminer's shares got as high as A$13.15 in May, at the height of the commodity boom,making Leucadia's stake worth $3 billion and pushing up Leucadia stock. Since then,Fortescue has slid to A$2.50 still more than double Leucadia's cost. Leucadia also has a close relationship with investment firm Jefferies, reflecting inpart Steinberg's friendship with CEO Rich Handler. Last year, Leucadia took a 50%stake in Jefferies junk-bond trading unit, in return for $350 million, even thoughsecurities firms rarely sell outsiders parts of their trading operations. This year,Leucadia has accumulated a 30% stake -- 48.6 million shares -- in Jefferies itself, at anaverage cost of $16. But the stock has dropped to around 10, less than 80% of book value.
Jefferies isn't immune to Wall Street's troubles -- it laid off about 10% ofits staff last week -- but its losses have been relatively modest because it doesn'ttake big trading positions. Still, its high-yield trading business has lost more than $80million this year. Jefferies, a scrappy niche firm, focuses on equity trading and junkbonds, as well as investment banking. Leucadia now looks like an attractive play on its depressed investments and on theability of Cumming and Steinberg to find new opportunities. Unless the pair has indeedtaken "stupid pills," investors could do well taking a ride with them.
--- For Barron's subscription information call 1-888-BARRONS ext. 685 or inquireonline at http://www.barronsmag.com/subscription/subscription.html.
Click here to go to Dow Jones NewsPlus, a web front page of today's most importantbusiness and market news, analysis and commentary:http://www.djnewsplus.com/al?rnd=3zH%2BT1HmknNr5JebshabcA%3D%3D.
You can use this link onthe day this article is published and the following day. (END) Dow Jones Newswires December 06, 2008 00:07 ET (05:07 GMT) Copyright (c) 2008 Dow Jones & Company, Inc.
Saturday 06 December 2008 16:07:00.000 AEST
(From BARRON'S) By Andrew Bary
Leucadia National may be the closest thing to what Berkshire Hathaway was 20 years ago,before Berkshire became so large that Warren Buffett needed investments of severalbillion dollars to move the needle. Run for 30 years by a secretive duo, Ian Cumming and Joseph Steinberg, Leucadia hasinvested in a wide variety of stocks and a diverse group of businesses. It has generatedvery impressive returns and developed a cult-like following among value-orientedinvestorswho like its investment style -- and results. Buffett is a fan of Leucadia,although Berkshire doesn't own the stock. Leucadia's book value, which stood at$23 a share on Sept. 30, is up from just 11 cents in 1979, an annual growth rate of morethan 20%. Leucadia (ticker: LUK), however, has fallen 60% since Sept. 30, to about 17, leaving itway below its May peak of 57 and slashing its market value to $4.3 billion. Investorsfear that Cumming, 68, and Steinberg, 64, have lost their touch, owing to declines inmany of Leucadia's key equity holdings, including Australian iron-ore producerFortescue Metals Group (FMG.AU), securities firm Jefferies (JEF), Canada's InmetMining (IMN.T) and auto-finance outfit AmeriCredit (ACF). Many of the company's other investments are suffering, including Cresud (CRESY),an Argentine agricultural and real-estate company, and Leucadia's 10% stake in ahedge fund run by William Ackman of Pershing Square that owns a single stock, retailerTarget (TGT). Leucadia probably has lost half of the $200 million it put in the fund lastyear. Fans argue that Leucadia is oversold, noting that it rarely has traded below book inthe past decade and in recent years typically has commanded 1.5 to two times book. Thestock could hit $30 in the next year if the company's equity holdings turn aroundand if Steinberg and Cumming take advantage of the current financial distress to displaytheir old stock-picking magic. Says one Leucadia holder: "I don't think thatthey suddenly took stupid pills." Given market declines since Sept. 30,Leucadia's book value has now probably fallen closer to $20 a share. Steinberg and Cumming, who couldn't be reached for comment, focus on minimizingLeucadia's tax bill. The company now has $1.6 billion of deferred tax assets,indicating that it expects to shield some $5 billion of future profits from federalincome taxes. Strip out that tax asset to reflect no future gains, and estimated bookfalls to around $14 a share. "That's a worst-case assumption. You're notpaying much above that for the stock," says a recent Leucadia investor. Book value also may be understated because of conservative valuations for real estateand other assets the company owns, plus a potentially lucrative agreement with Fortescuethat pays Leucadia 4% of net revenues from its Australian iron-ore mine for more than adecade. The deal could produce more than $100 million of annual profits for Leucadia,assuming ore prices don't collapse. Leucadia's operating businesses, including plastics, wood products, pre-paid phonecards, as well as a Napa Valley winery and the Hard Rock Hotel & Casino in Biloxi,Miss., don't generate much profit. Investors tend to value the company on bookvalue, rather than earnings, because most of its worth lies in investments. Leucadia also has invested about $100 million for an 87% stake in a medical start-upcalled Sangart, which is developing a blood substitute now in clinical trials. There havebeen many failures in this field, but Leucadia hopes that Sangart's product,Hemospan, is a winner. Many holders simply view Leucadia as a play on Cumming and Steinberg's investmentacumen. Both intend to stay on the job for a while; their employment contracts run into2015. Some Leucadia watchers believe the company will be liquidated or sold when Cummingand Steinberg leave the scene. Like Buffett, Cumming and Steinberg believe in a strong balance sheet. As of Sept. 30,Leucadia's $8.4 billion in assets significantly exceeded its $2.6 billion in debtand other liabilities. Leucadia had about $500 million of cash and equivalents on Sept.30, down from $1.4 billion on Dec. 31. Dividends certainly aren't a drain on itscash. This year, there will be none; last year, the payout was only 25 cents a share.
Unlike Berkshire, Leucadia lacks significant operating businesses; its focus tends tobe on more speculative companies. It has paid $405 million for 32 million shares -- a 28%stake -- in AmeriCredit, which provides auto loans to those with weak credit. Reflectinga tough economy and tightness in the credit markets, AmeriCredit shares are 40% belowLeucadia's cost.
Cumming, Leucadia's chairman, and Steinberg, its president, may be thelowest-profile leaders of any sizable public company. Outside of their annual shareholderletter and appearance at the annual meeting, they stay out of public view. There are noearnings conference calls, no investor presentations and no financial guidance. There areno photographs of Cumming or Steinberg in the annual report. Hardly any analysts coverthe company because of its complexity and minimal communications. Leucadia invested in Fortescue in 2006, when founder and CEO Andrew Forrest neededmoney to build a giant mine in a remote area that would compete with Australian iron-oretitans Rio Tinto and BHP Billiton to supply the voracious Chinese steel industry.Leucadia, which initially invested $400 million, now owns 9.9% of Fortescue. Theminer's shares got as high as A$13.15 in May, at the height of the commodity boom,making Leucadia's stake worth $3 billion and pushing up Leucadia stock. Since then,Fortescue has slid to A$2.50 still more than double Leucadia's cost. Leucadia also has a close relationship with investment firm Jefferies, reflecting inpart Steinberg's friendship with CEO Rich Handler. Last year, Leucadia took a 50%stake in Jefferies junk-bond trading unit, in return for $350 million, even thoughsecurities firms rarely sell outsiders parts of their trading operations. This year,Leucadia has accumulated a 30% stake -- 48.6 million shares -- in Jefferies itself, at anaverage cost of $16. But the stock has dropped to around 10, less than 80% of book value.
Jefferies isn't immune to Wall Street's troubles -- it laid off about 10% ofits staff last week -- but its losses have been relatively modest because it doesn'ttake big trading positions. Still, its high-yield trading business has lost more than $80million this year. Jefferies, a scrappy niche firm, focuses on equity trading and junkbonds, as well as investment banking. Leucadia now looks like an attractive play on its depressed investments and on theability of Cumming and Steinberg to find new opportunities. Unless the pair has indeedtaken "stupid pills," investors could do well taking a ride with them.
--- For Barron's subscription information call 1-888-BARRONS ext. 685 or inquireonline at http://www.barronsmag.com/subscription/subscription.html.
Click here to go to Dow Jones NewsPlus, a web front page of today's most importantbusiness and market news, analysis and commentary:http://www.djnewsplus.com/al?rnd=3zH%2BT1HmknNr5JebshabcA%3D%3D.
You can use this link onthe day this article is published and the following day. (END) Dow Jones Newswires December 06, 2008 00:07 ET (05:07 GMT) Copyright (c) 2008 Dow Jones & Company, Inc.
Saturday 06 December 2008 16:07:00.000 AEST
Monday, December 8, 2008
Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says
Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says (Update1)
By Nigel Stevenson and Brett Foley
Dec. 5 (Bloomberg) -- The fundamentals of commodities are “unimpaired” and prices will rebound when a lack of new supply leads to shortages, said Jim Rogers, chairman of Rogers Holdings.
“Commodities will be the place to be if and when we come out of” the downturn, Rogers said yesterday in an interview from Miami. “The only thing where fundamentals are unimpaired are commodities. Farmers cannot get loans for fertilizer now. Nobody can get a loan to open a zinc mine. So we are going to have some serious, serious supply problems before too much longer.”
The Reuters/Jefferies CRB Index of 19 commodities has plunged 53 percent from a record in July on concern that a global recession will sap demand for raw materials. The index almost doubled between its low in 2001 and the end of last year.
Rogers said crude oil and agricultural commodities were the most likely to have shortages and the outlook for zinc and cotton had “improved.” “I haven’t sold any commodities since the bull market began,” he said.
“I own some gold and if gold goes down I’ll buy some more and if gold goes up I’ll buy some more,” Rogers said. “Gold during the course of the bull market, which has several more years to go, will go much higher.”
Gold for immediate delivery has tripled since its low in 2001. It’s still 25 percent below the record $1,032.70 an ounce reached in March.
‘Unfathomable’
Rogers also said that while he owned platinum through index investments, “I’m not buying platinum at the moment.”
Platinum, used mostly in jewelry and catalytic converters for cars, has plunged 64 percent since reaching an all-time high of $2,301.50 an ounce in March.
Central banks and President-elect Barack Obama should be careful in responding to the global economic slump, Rogers said.
“It is astonishing how bad they’re reacting this time. It is unfathomable to me what they’re doing and you think some of them would have read some history,” he said.
To contact the reporters on this story: Nigel Stevenson in London at nstevenson@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net
Last Updated: December 5, 2008 03:21 EST
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoqpN8LQJqAM
mms://media2.bloomberg.com/cache/vxDflc7bPwN0.asf
http://www.youtube.com/watch?v=M3WhlddSBbw
http://c77mxg.bay.livefilestore.com/y1pHp6rIXoWxr4oGjWJvcEpLAmyu0sAryW09CQMoPbtaFO6XN8UJJSXI7t1F360oZApaoI2jWm5SEVBTylvptom8w/JimRogers_Bloomberg_05_12_2008_p1.mp4?download
http://c77mxg.bay.livefilestore.com/y1pQnMjVG9kSWjPHCzT-ZyqbMoRQm3qFLZBcnLgt70v4L3K2x6n2g7y4DV2F45iGFcHgAzPUM8W4xI/JimRogers_Bloomberg_05_12_2008_p2.mp4?download
08/12/2008
tjhinkh: Jim has covered his short on long term US treasury bonds with a loss.
He often enter early. But is willing to admit his mistake and close the trade.
He is still looking to short US treasury bond as he thought that it is in a bubble.
In a bubble, people often get it wrong by going in too early.
Jim also thinks that the Chinese should not be spending so much money in the panic.
He also plan to travel around China with his two daughters. They will be his interpreter.
By Nigel Stevenson and Brett Foley
Dec. 5 (Bloomberg) -- The fundamentals of commodities are “unimpaired” and prices will rebound when a lack of new supply leads to shortages, said Jim Rogers, chairman of Rogers Holdings.
“Commodities will be the place to be if and when we come out of” the downturn, Rogers said yesterday in an interview from Miami. “The only thing where fundamentals are unimpaired are commodities. Farmers cannot get loans for fertilizer now. Nobody can get a loan to open a zinc mine. So we are going to have some serious, serious supply problems before too much longer.”
The Reuters/Jefferies CRB Index of 19 commodities has plunged 53 percent from a record in July on concern that a global recession will sap demand for raw materials. The index almost doubled between its low in 2001 and the end of last year.
Rogers said crude oil and agricultural commodities were the most likely to have shortages and the outlook for zinc and cotton had “improved.” “I haven’t sold any commodities since the bull market began,” he said.
“I own some gold and if gold goes down I’ll buy some more and if gold goes up I’ll buy some more,” Rogers said. “Gold during the course of the bull market, which has several more years to go, will go much higher.”
Gold for immediate delivery has tripled since its low in 2001. It’s still 25 percent below the record $1,032.70 an ounce reached in March.
‘Unfathomable’
Rogers also said that while he owned platinum through index investments, “I’m not buying platinum at the moment.”
Platinum, used mostly in jewelry and catalytic converters for cars, has plunged 64 percent since reaching an all-time high of $2,301.50 an ounce in March.
Central banks and President-elect Barack Obama should be careful in responding to the global economic slump, Rogers said.
“It is astonishing how bad they’re reacting this time. It is unfathomable to me what they’re doing and you think some of them would have read some history,” he said.
To contact the reporters on this story: Nigel Stevenson in London at nstevenson@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net
Last Updated: December 5, 2008 03:21 EST
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoqpN8LQJqAM
mms://media2.bloomberg.com/cache/vxDflc7bPwN0.asf
http://www.youtube.com/watch?v=M3WhlddSBbw
http://c77mxg.bay.livefilestore.com/y1pHp6rIXoWxr4oGjWJvcEpLAmyu0sAryW09CQMoPbtaFO6XN8UJJSXI7t1F360oZApaoI2jWm5SEVBTylvptom8w/JimRogers_Bloomberg_05_12_2008_p1.mp4?download
http://c77mxg.bay.livefilestore.com/y1pQnMjVG9kSWjPHCzT-ZyqbMoRQm3qFLZBcnLgt70v4L3K2x6n2g7y4DV2F45iGFcHgAzPUM8W4xI/JimRogers_Bloomberg_05_12_2008_p2.mp4?download
08/12/2008
tjhinkh: Jim has covered his short on long term US treasury bonds with a loss.
He often enter early. But is willing to admit his mistake and close the trade.
He is still looking to short US treasury bond as he thought that it is in a bubble.
In a bubble, people often get it wrong by going in too early.
Jim also thinks that the Chinese should not be spending so much money in the panic.
He also plan to travel around China with his two daughters. They will be his interpreter.
Monday, December 1, 2008
Thanksgiving brings Rogers family together
Thanksgiving brings Rogers family together
By David Snow (Contact) Demopolis Times
Published Saturday, November 29, 2008
DEMOPOLIS — When one thinks of Thanksgiving, there is the food, of course, but the first image that comes to mind is really that of family. As the first major holiday of the year, it is usually a time to see family members who are too far away to visit with regularly, and it is a cherished time to see them once again.
That holds true for Jim Rogers, a native of Demopolis now lives in Singapore, and his brother, Broughton Rogers, who lives here in Demopolis. Every Thanksgiving, they visit their mother in Birmingham, but this holiday, Jim found the time to come home again for the first time in more than three years.
“Broughton is the only family I have still here in Demopolis,” he said. “Him and Dee Lott, my cousin.
“Broughton and I were in Birmingham (on Thanksgiving. I live in Singapore now, and my wife and two children flew from Singapore to Vienna to New York to Birmingham. My mother is in an assisted living nursing home in Birmingham now. We spent Thanksgiving with her. Broughton drove up, and we all had Thanksgiving together.”
The two brothers decided to come down to Demopolis Thanksgiving night for a hometown visit.
“Thursday night, I came down here to Demopolis, because I haven’t been to Demopolis in a while, and I was really keen to see Demopolis,” Jim said. “We drove around Demopolis that night, and we drove around some (on Friday), and then, I’m going back to Birmingham to be with my mother and two daughters.”
Another reason for the Birmingham visit is so Jim’s 8-month-old daughter can be baptized in church on Sunday.
“Broughton is coming up for that,” Jim said, “and some of my other brothers, as well, for the baptism.”
Broughton enjoyed the visit with his brother, as the two drove around town to relive memories. Jim graduated from Demopolis High School in 1960, while Broughton was a 1967 DHS graduate.
“He took us out to eat (Thursday night),” Broughton said. “We drove around Demopolis and went to the Red Barn and saw some people. Jim saw Roger Roberts, and I saw a couple of people.”
It was a pleasant Thanksgiving for their mother to see her sons together.
“She had not seen the two of us together in a while,” Jim said. “I usually get to Alabama at Thanksgiving. Our mother is 89 years old, and she’s very, very keen and excited when we come over.”
Jim said that two other brothers will be in Birmingham for his daughter’s baptism.
“They have five sons,” he said. “I saw one of the sons, Mabry, Tuesday night when we arrived in Birmingham. Then, he and his wife flew to California on Wednesday to see one of their daughters. I will see all of my brothers at some time or another during this trip, but I will not see all four of them.”
That speaks to the commonality of family members coming home from all over for a chance to get together for however short a time before leaving to tend to other responsibilities and other parts of their lives.
The food is a great part of Thanksgiving, but the key ingredient to any Thanksgiving meal is family.
http://www.demopolistimes.com/news/2008/nov/29/thanksgiving-brings-rogers-family-together/
By David Snow (Contact) Demopolis Times
Published Saturday, November 29, 2008
DEMOPOLIS — When one thinks of Thanksgiving, there is the food, of course, but the first image that comes to mind is really that of family. As the first major holiday of the year, it is usually a time to see family members who are too far away to visit with regularly, and it is a cherished time to see them once again.
That holds true for Jim Rogers, a native of Demopolis now lives in Singapore, and his brother, Broughton Rogers, who lives here in Demopolis. Every Thanksgiving, they visit their mother in Birmingham, but this holiday, Jim found the time to come home again for the first time in more than three years.
“Broughton is the only family I have still here in Demopolis,” he said. “Him and Dee Lott, my cousin.
“Broughton and I were in Birmingham (on Thanksgiving. I live in Singapore now, and my wife and two children flew from Singapore to Vienna to New York to Birmingham. My mother is in an assisted living nursing home in Birmingham now. We spent Thanksgiving with her. Broughton drove up, and we all had Thanksgiving together.”
The two brothers decided to come down to Demopolis Thanksgiving night for a hometown visit.
“Thursday night, I came down here to Demopolis, because I haven’t been to Demopolis in a while, and I was really keen to see Demopolis,” Jim said. “We drove around Demopolis that night, and we drove around some (on Friday), and then, I’m going back to Birmingham to be with my mother and two daughters.”
Another reason for the Birmingham visit is so Jim’s 8-month-old daughter can be baptized in church on Sunday.
“Broughton is coming up for that,” Jim said, “and some of my other brothers, as well, for the baptism.”
Broughton enjoyed the visit with his brother, as the two drove around town to relive memories. Jim graduated from Demopolis High School in 1960, while Broughton was a 1967 DHS graduate.
“He took us out to eat (Thursday night),” Broughton said. “We drove around Demopolis and went to the Red Barn and saw some people. Jim saw Roger Roberts, and I saw a couple of people.”
It was a pleasant Thanksgiving for their mother to see her sons together.
“She had not seen the two of us together in a while,” Jim said. “I usually get to Alabama at Thanksgiving. Our mother is 89 years old, and she’s very, very keen and excited when we come over.”
Jim said that two other brothers will be in Birmingham for his daughter’s baptism.
“They have five sons,” he said. “I saw one of the sons, Mabry, Tuesday night when we arrived in Birmingham. Then, he and his wife flew to California on Wednesday to see one of their daughters. I will see all of my brothers at some time or another during this trip, but I will not see all four of them.”
That speaks to the commonality of family members coming home from all over for a chance to get together for however short a time before leaving to tend to other responsibilities and other parts of their lives.
The food is a great part of Thanksgiving, but the key ingredient to any Thanksgiving meal is family.
http://www.demopolistimes.com/news/2008/nov/29/thanksgiving-brings-rogers-family-together/
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