How Wall Street titan Leon Cooperman stays on top in investing and philanthropy

SATURDAY, MAY 18, 2013

Cues From Cooperman

By LAWRENCE C. STRAUSS | MORE ARTICLES BY AUTHOR

How Wall Street titan Leon Cooperman stays on top in investing and philanthropy.

Leon Cooperman has never been afraid to blow his stack. In fact, his volcanic tendencies are so well known on Wall Street that almost no one was fooled when the late Barton Biggs, Morgan Stanley’s longtime market strategist, introduced a character named Greg in Hedgehogging, a 2006 investment memoir. “Greg has a reputation of being difficult to work for and a screamer,” Biggs wrote, attempting to disguise Cooperman. “A screamer is a hedge-fund guy who yells at the people who work for him when they are wrong or careless.”

Asked about that description in a recent interview, Cooperman, 70, offered a warm, gentle smile. He is not a screamer, he said, but does take pride in being a “demanding” boss. Just look at it from his investors’ perspective, he said. “If you are paying somebody two and 20, as opposed to 1%, you basically have the right to expect more from that person,” he says. “And that’s what I tell my people: You’ve elected, for better or worse, to be in the two-and-20 game, so you have to be on the balls of your feet at all times.” Read more of this post

The Giant of Shareholders, Quietly Stirring; BlackRock, the world’s largest asset manager, is far from being an activist investor, but it is starting to ask more questions about companies in which it has stakes.

May 18, 2013

The Giant of Shareholders, Quietly Stirring

By SUSANNE CRAIG

Blackrock

AT 11 a.m. on a Wednesday earlier this month, Michelle Edkins and her team began wheeling extra chairs into a cramped conference room in a San Francisco office tower, preparing for the corporate-governance equivalent of speed dating. Once settled, Yumi Narita started describing the disappointing qualities of a big entertainment company she’d been checking out. “I’m inclined not to trust this compensation committee,” she told the group.  “Year-over-year, they pay their C.E.O. more, and the metrics are often questionable.” There were sympathetic nods around the room. Ms. Narita is one of about 20 analysts on the corporate governance team at BlackRock, the world’s largest asset manager. BlackRock’s size is mind-boggling. With almost $4 trillion under management, it is, according to a recent University of Michigan study, the single largest shareholder in one of every five United States companies. It manages money from pension funds and endowments as well as retail investors, controls large stakes in companies like JPMorgan Chase, Wal-Mart and Chevron and owns 5 percent or more of roughly 40 percent of all publicly traded companies in the country.

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Is This the Best Time for Investors? Don’t Bet On It.

Updated May 18, 2013, 8:34 p.m. ET

Is This the Best Time for Investors? Don’t Bet On It.

By BRETT ARENDS

SJ-AG481_LEDE_C_G_20130517163304

These have been good times—surprisingly good times—for investors. Stock prices have hit record highs. The Dow Jones Industrial Average has rocketed above 15000 for the first time, leaving even Wall Street bulls scrambling to raise their year-end forecasts to catch up. Meanwhile, even the normally staid bond market, as measured by the Barclays U.S. Aggregate Bond index, is up about 30% over the last five years. Interest rates on Treasury bonds are near historic lows. Corporate bonds, including those for blue-chip and riskier companies, are booming. Those who stuck with markets through the crisis of 2008, and especially those who held a balanced portfolio of stocks and bonds, are probably feeling very pleased with themselves, and well they might. But there’s a problem at the heart of financial markets. Psychologists would call it cognitive dissonance—the problem of trying to believe two incompatible things at the same time.

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China’s King of All Social Media: Tencent is China’s Facebook, Twitter, Zynga, and Tumblr all rolled into one, and it’s pushing hard into e-commerce. How it stays on top

SATURDAY, MAY 18, 2013

China’s King of All Social Media

By RESHMA KAPADIA | MORE ARTICLES BY AUTHOR

Tencent is China’s Facebook, Twitter, Zynga, and Tumblr all rolled into one, and it’s pushing hard into e-commerce. How it stays on top, and why the shares could climb 20%.

Chinese Internet companies are facing growing pains, as new competitors emerge and new trends like mobile Internet turn their business models upside down. Tencent Holdings (ticker: 700.Hong Kong) is coping better than most, aided by a diversified mix of businesses, among them: China’s dominant, youth-oriented gaming operations; one of the nation’s largest instant-messaging services, QQ; and the wildly popular WeChat, a free mobile social-networking and messaging software that allows users to send photos, videos, and voice messages to each other, walkie-talkie style.

Tencent’s individual businesses put it on par with Facebook (FB), Twitter, Zynga(ZNGA), and Tumblr, but it has more power than these firms because its users, advertisers, and application developers can access them all on a single platform. “Tencent is the winner-take-all social player in China,” says Ravi Sarathy, Citigroup’s head of Asia Pacific entertainment, media, and telecom research. Read more of this post

You Can Do Too Much Due Diligence: The Case of Feedburner

May 132013

You Can Do Too Much Due Diligence

It’s Monday, time for another lesson I’ve learned in the venture capital business. Today I will tell a story that I love telling. It has some of my favorite people in it. Back in 2004, early in my blogging career, I heard about a service that had just launched called Feedburner. It provided a number of useful services for a blog’s RSS feed. So I went and signed up and AVC became one of the first users of the service. I immediately liked the service and the idea. So I contacted the founder/CEO Dick Costolo, who has gone onto bigger and better things. I told Dick that I was interested in making an investment in Feedburner. My friend Brad Feld was also talking to Dick about the same thing so we decided to do the investment together. As part of our investment process, we do a bunch of fact gathering/checking work that is called Due Diligence in the vernacular of the VC business. So my partner Brad Burnham and I put together a list of leading blogs and online publishers who had popular RSS feeds at the time. I think there were a dozen or so publications on that list. It included Weblogs (Engadget), Gawker (Gawker), NY Times, and a bunch more. We know most everyone who ran those operations so we called them. What we heard was surprising. Not one of them was willing to hand over their RSS feed to a third party for analytics and monetization. We were very surprised to hear that and thought a bit about it. But, we decided, we could not invest in something that the big publishers would not support. So regrettably, I called Dick and told him we had to pass and why. Brad Feld went ahead with the investment and Feedburner closed their round without USV. About six months later I ran into Dick at an industry conference. We decided to grab lunch together and during lunch he said to me “you know those dozen publishers you called?” I said “yes, what about them?” He said “every single one of them is on Feedburner now.” I was pissed. How could that be? So I said to Dick, “Would you consider letting us into that last round we walked away from.” He said “No, but I will let you invest at a 50% increase in price”. We did that and became an investor in Feedburner. And that worked out well when Feedburner was sold to Google a few years later. So what did I learn from this lesson? First, trust your gut. I was using Feedburner and knew it was a very useful service. I felt that others would see that too. They did, but it took some time. Second, I learned that a service can get traction with the little guys and in time, the big guys will come along. I have seen that happen quite a bit since then. And finally, I learned that you can do too much due diligence. It’s important to talk to the market and hear what it is saying. But you have to balance that with other things; the quality of the team, the product, the user experience, etc. You cannot rely alone on due diligence, particularly early on in the development of a company and a market.

Adrian Cheng: updating the Hong Kong family empire of Chow Tai Fook/New World for a changing China

Saturday May 18, 2013 MYT 10:05:00 PM

Adrian Cheng: updating a Hong Kong family empire for a changing China

HONG KONG: He has trained on Broadway and been a Wall Street banker.

Now, Adrian Cheng, 33-year-old scion of the world’s largest jewellery retailer and one of Asia’s leading property developers is gearing up for his latest challenge – modernizing his family’s $25 billion empire for what he calls a “new era”.

The grandson of Hong Kong billionaire Cheng Yu-tung, who built up jeweler Chow Tai Fook (1929.HK) and real estate titan New World Development (0017.HK), Cheng is one of a new generation of business leaders in Asia who are taking over the corporate reins from their ageing rags-to-riches forebears. Read more of this post

Meet the man who is betting against China; Muddy Waters’ Carson Block believes that China’s banks hold more toxic assets than Western peers did ahead of the 2008 financial crash

Meet the man who is betting against China

Carson Block, the founder of Muddy Waters Research, believes that China’s banks hold more toxic assets than Western peers did ahead of the 2008 financial crash .

Earlier this month, Mr Block caused shares in Standard Chartered to fall and the cost of insuring its debt to spike after he warned the emerging market-focused lender had more risk on its balance sheet than the market commonly believed and suggested that betting against the bank was a good way to profit from any Chinese downturn. Photo: Bloomberg

By Harry Wilson

10:00PM BST 18 May 2013

He is listened to by institutional investors, regulators and politicians but he rarely speaks publicly. Last week, his analysis of Standard Chartered’s exposure to China caused a tremble in its share price and its backers to leap to the bank’s defence. Carson Block has broken his silence this weekend to reveal his fears for the global economy. The secretive fund manager said the risks within China’s banking system are more severe than those in Western financial institutions before the crisis. Mr Block, founder of Muddy Waters Research, which has gained a reputation over the past three years for its in-depth reports on financial irregularities in scores of Chinese companies, said the country’s banks hold more toxic assets than their peers in the West did ahead of the 2008 financial crash. “We believe that the domestic Chinese banking system is a mess, with an enormous amount of bad loans, or loans waiting to go bad,” he told theSunday Telegraph. Read more of this post

Chinese enterprises’ globalization ‘big in scale but weak’: Accenture

Chinese enterprises’ globalization ‘big in scale but weak’: Accenture

Staff Reporter

2013-05-19

The globalization of Chinese enterprises has been “big in scale but weak,” Claire Yang, head of Accenture’s Greater China talent and organization service line, was quoted May 14 in a report on the caixin.com Chinese business news website.

In terms of business scale, direct overseas investments made by Chinese enterprises touched US$77.2 billion in 2012, posting a growth rate of more than 20 times the levels seen less than a decade ago, the report said.

However, the global percentage of Chinese foreign investments remained at a low level compared with other countries. An Accenture report indicated that in 2011, capital flow involving Chinese direct foreign investment accounted for 16% of that of the United States and 57% of Japan, and was ranked the world’s ninth largest.

The ratio of Chinese enterprises overseas revenue was low. Using Standard and Poor’s 500 index, the average overseas revenue recorded for an enterprise accounted for 27% of the total the enterprise generated in a year. Read more of this post

Dongguan, one of China’s richest cities, suspends free services as debt crisis bites

Dongguan suspends free services as debt crisis bites

Saturday, 18 May, 2013, 12:00am

Charlotte So in Dongguan charlotte.so@scmp.com

In a telling sign of the mainland’s mounting local government debt crisis, some towns in Dongguan – one of the richest cities – are being forced to suspend free public services and infrastructure projects.

In February, Shipai town terminated the free bus services that it introduced with much fanfare about two years ago. Then in March, the township government said it was reviewing a policy of providing free education to all residents aged below 25 because the government’s coffers had dried up.

The town of Zhangmutou – dubbed little Hong Kong because of its popularity as an investment and holiday destination – has scrapped an ambitious plan to build a 100-million yuan (HK$126.4 million) recreational park, leaving a large chunk of empty land in the town centre.

Many local township authorities in Dongguan are struggling to pay the salaries of their employees.

Their problems underline the magnitude of local government debt issues on the mainland. Read more of this post

S&P warns it may lower India rating to junk status

S&P warns it may lower India rating to junk status

India faces at least “a one-in-three” chance of losing its prized sovereign grade rating. -AFP
Sat, May 18, 2013
AFP

NEW DELHI – India faces at least “a one-in-three” chance of losing its prized sovereign grade rating, global ratings agency Standard and Poor’s has warned, in another blow to the scandal-tainted Congress government. The announcement late on Friday comes after finance ministry officials have been arguing for a ratings upgrade, saying the government has been taking strong steps to curb India’s financial deficit and promote investment. India’s BBB-minus investment rating is already the lowest among its BRICS peers Brazil, Russia, China and South Africa, and cutting it to “junk status” would push up the country’s hefty borrowing costs as it would signal higher risk. Read more of this post

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