Answer to Red's YMB question
Mar 10, 2016 17:58:14 GMT -5
Think2Succeed, qbeing1010, and 4 more like this
Post by holdencf on Mar 10, 2016 17:58:14 GMT -5
"Wouldn't you think they'd be all over Arrowhead from the long side. It could be up an order of magnitude in an instant if a recognizable name became a partner. Guess I'm getting old...know, I'm getting old."
Hedge funds get marked on a monthly or quarterly (a few annual but rare). They care about monthly or quarterly performance because many of their limiteds care about monthly or quarterly performance. So timing counts. Because of that many hedge funds cannot be buy and hold long term investors. Even if it isn't a stated rule, timing is always running the back of an analyst's or PM's head. ARWR is deadmoney until something big happens. Then it's a coiled spring. But If I am a hedgie, I'd rather catch a ride on the bullet train than a falling piano. If I own enough stocks as a PM that aren't working out, doesn't matter how much promise they have, I am going to underperform and get canned. And it can happen fast.
That said, I know of two senior people at two large funds that were present at the ASM. There may have been others. That's a little unusual for a non-financial capital city (unless it's Omaha). ASMs are usually boring and present little new info. Better to wait for a one on one in NYC or SanFran, or visit the company for DD when nobody else is around. Why ask provocative questions that generate answers that other funds can use to make investment decisions. Hedge fund land is NOT the YMB. These funds compete for ideas. Its also why you never hear funds asking questions on CCs. They ask their questions off line. They will share an idea with every one in the world after establishing a position, not before. Particularly in illiquid small cap names. But the presence of two big funds is welcome news because I guarantee that they are not the only one looking. Now is the perfect time to be doing DD and maybe start nibbling at the stock.
Hedge funds get marked on a monthly or quarterly (a few annual but rare). They care about monthly or quarterly performance because many of their limiteds care about monthly or quarterly performance. So timing counts. Because of that many hedge funds cannot be buy and hold long term investors. Even if it isn't a stated rule, timing is always running the back of an analyst's or PM's head. ARWR is deadmoney until something big happens. Then it's a coiled spring. But If I am a hedgie, I'd rather catch a ride on the bullet train than a falling piano. If I own enough stocks as a PM that aren't working out, doesn't matter how much promise they have, I am going to underperform and get canned. And it can happen fast.
That said, I know of two senior people at two large funds that were present at the ASM. There may have been others. That's a little unusual for a non-financial capital city (unless it's Omaha). ASMs are usually boring and present little new info. Better to wait for a one on one in NYC or SanFran, or visit the company for DD when nobody else is around. Why ask provocative questions that generate answers that other funds can use to make investment decisions. Hedge fund land is NOT the YMB. These funds compete for ideas. Its also why you never hear funds asking questions on CCs. They ask their questions off line. They will share an idea with every one in the world after establishing a position, not before. Particularly in illiquid small cap names. But the presence of two big funds is welcome news because I guarantee that they are not the only one looking. Now is the perfect time to be doing DD and maybe start nibbling at the stock.
