market folly

Hat tip to Simoleon Sense for this find. Interesting video embedded below featuring a lengthier speech/chat by Dan Loeb of hedge fund Third Point LLC. In the video, Loeb details his background, talks about the investment industry, and gives a lot of great advice. And, since this was pretty recent (June 2009), he details the turmoil his firm suffered in 2008 and walks us through his progress thus far in 2009. A funny quote from the video comes when Loeb talks about his bearish outlook when the new year began, as Third Point was positioned defensively and owned a lot of gold. Loeb said, "if we could have stockpiled guns at Third Point, I probably would have." Good times. But, as we here on Market Folly have already covered, Third Point's gold position was mainly a hedge against uncertainty and they have since moved out of it, as detailed in one of their investor letters.

Third Point is a $2 billion activist and value based hedge fund. Specifically, they deem themselves to be "event driven, value oriented investors." While Loeb actually got his start in private equity, his passion has always been the markets. Loeb founded the firm back in 1995 with $3.3 million in seed capital and is still running the show these days. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb himself is quite well known for his searing and critical letters to management of various companies. Third Point has seen annual returns averaging over 15% since inception (including the crazy year that was 2008), a Sharpe Ratio of 0.9, and a correlation to the S&P500 of 0.4. For some of Third Point's hedge fund movements, we covered Loeb's recent activity here.

Here is the video (RSS & Email readers will need to come to the blog to view it: