Confidence game
"Confidence Game tells the story how hedge fund manager Bill Ackman's warnings regarding bond insurer MBIA's credit rating went unheeded as Wall Street careened toward disaster"--Provided by publisher.
Stats for nerds
2recommend
3mentions
3people
2014–2022years
67% recommend33% neutral
Mentions per year
What Hacker News says
- two from finance:
Confidence Game: How Hedge Fund Manager Bill Ackman Called Wall Street's Bluff // Christine Richard
Fooling Some of the People All of the Time // David Einhorn
- "The Art of Profitability" by Adrian Slywotzky
"The Myth of the Rational Voter" by Bryan Caplan
"Fanatical Prospecting" by Jeb Blount
"Fooling Some of the People All of the Time" by David Einhorn
"Confidence Game" by Christine Richard
"Mouth Matters; How Your Mouth Ages Your Body and What YOU Can Do About It" by Carol Vander Stoep
"Adventures in Stochastic Processes" by Sidney & Resnick
"The Great Deformation" by David Stockman
"Efficient Electrical Systems Design Handbook" by Thumann & Franz
"The Goal" by Eliyahu Goldratt
"Notes on Discrete Mathematics" by Miguel Lerma
"Stochastic Calculus with Infinitesimals" by Frederik S. Herzberg
"Information Theory, Inference, and Learning Algorithms" by David Mackay
"Coming Apart" by Charles Murray
"The Collapse of Complex Societies" by Joseph Tainter
"In Other Words: The Science And Psychology Of Second-language Acquisition" by Ellen Bialystok and Kenji Hakuta
- Whenever big money is at play, there are bound to be players that will try to influence the market on either side of the trade, so I'm not sure why the NYT reporters are being so one sided in their coverage. One of the other big players on the other side of this trade is Carl Icahn (who owns nearly 15% of the stock) so there is pretty much equal influence if not more to negate whatever Bill Ackman can do. Other investors on the other side of Ackman include George Soros as well as William Stiritz, the CEO of Post Holdings, maker of Raisin Bran.
What I would like to add though is that Bill Ackman is extremely thorough before going all out on a bet of such proportions. If he wasn't he wouldn't be in the business any longer than average Joe. Bill Ackman has acknowledged losing $400 million to $500 million on his short position, and I really don't think he is stupid enough to want to lose more money just to stroke his ego.
Here is one thing that the author states in the article:
Mr. Ackman once made a similar bet against the bond insurer MBIA, one that reaped him and his investors a $1.1 billion return. In a book about his MBIA wager called “Confidence Game,” the reporter-turned-financial analyst Christine S. Richard chronicled how he fought with regulators for SEVEN YEARS before his prediction that MBIA stock would “spiral downward” came true.
What this fails to take into state is that if the regulators had been more diligent in following up, they could have helped reign in the massive toxic CDO empire that companies like MBIA enabled that nearly tanked the global economy a couple of years ago. Also MBIA did everything it could to malign Ackman's reputation. He was under investigation for more than a couple of years where he tried to convince the "rating agencies" Moodys, Fitch and the like and the regulators about all that was wrong with MBIA and other such companies. Confidence Game is a good book worth reading to understand how dumb the regulators and rating agencies can be.
So ultimately Ackman probably knows more about this than the reporter or the regulators because he binges on tons of information and is pissed that no one is doing anything about it. Similarly to what happened with MBIA. I'd say that he is going to this extent because he is beyond frustrated that others can't see what he can see and he is trying to get others to do the research, and do what is right. He has stated that he will stick to this as long as it takes and so if there is an investigation, and they (Herbalife) come out clean, it'd still be a losing bet for Ackman as he is mainly concentrating his $$ into this trade.
If I had to put my money, I'd put it with Ackman, unfortunately I'm still grappling with my student debt to be able to afford making these kinds of bets.
In the grand scheme of things, I think Bill Ackman is more like David than Goliath. Sure he has a couple of billion in the bank, but investors like him are why corporate executives aren't partying like they used to in the 50s/60s/70s/80s and are becoming more accountable to shareholders (albeit very slowly).
I'd go so far as to say that if Paul Graham was in the business of funding hedge fund managers, Ackman would be one of his top picks from the applicant pool.
Also to add more context:
Ackman outspent by Herbalife in lobbying battle [1]
Hedge fund manager William Ackman, who is betting $1.16 billion that Herbalife is a fraud, spent $264,000 last year on lobbyists to press his case against the company, according to government documents filed in recent weeks.
THAT AMOUNT IS DWARFED BY THE NEARLY $2 million Herbalife spent in 2013 on federal lobbying as the nutrition and weight loss company fought the billionaire investor's claims it runs a pyramid scheme. In an illegal pyramid scheme members earn more for recruiting new members into the scheme than for selling the products outside the network.
And Ackman isn't alone in thinking that Herbalife is a pyramid scheme [2].
Disclaimer: This is my opinion, and as such all I know about Ackman is from the press, reading his report/book called "Is MBIA Triple A?", the book mentioned in the article "Confidence Game", his talks/interviews/tv reports and second hand articles on the web.
[1] http://www.reuters.com/article/2014/03/09/us-herbalife-idUSB... [2] http://en.wikipedia.org/wiki/Herbalife#Pyramid_scheme_allega...
