Source: nasdaq.com
Kyle Bass
purchased 5,644,245 shares of Sealy Corporation (
ZZ
), or 5.9% of the global bedding producer, at the average price
of $2.04 on September 20, according to
GuruFocus Real Time Picks
. Bass is the managing member and principal of Hayman Advisors LP
and primarily invests according to his views on the macroeconomic
environment.
Sealy's stock has declined almost 88% in the last ten years, but
gained almost 35% in the last month. The company's revenue
declined annually from 2007 to 2010, and increased to $1.2
billion in 2011. Earnings had been increasing each year since
Sealy fell to a loss in 2008, but it fell to another loss, of
$5.66 million, in 2011. Sealy's balance sheet contains
approximately $232.2 in cash and $810.1 million in long-term
liabilities and debt.
The company's stock has traded in a range of $1.09 and $2.45 per
share in the last 52 weeks, though it began trading at $17.50
when it held its IPO in 2006.
Sealy has been making operational changes in the last several
years. Most prominently, in the first and second quarters, it
introduced and began to ship two new lines - one premium and one
value priced - and accompanied them with an advertising campaign.
In the first quarter, sales, gross margin and adjusted EBITDA
performance improvement were driven by the success of its Next
Generation Stearns & Foster line, which it began shipping in
the fourth quarter of 2011.
In the fourth quarter of 2010, Sealy divested all of its European
assets and discontinued operations in Brazil and arranged license
agreements with third parties in those markets instead.
In an investor presentation, Sealy says that its outlook is
"strongly tied to macroeconomic conditions" and shows that the
whole industry had double-digit sales growth in the years
following stagnant recessionary periods as U.S. GDP improved.
The company announces its third-quarter financials, which will
contain the results of its new initiatives, on September 27.
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Wednesday, October 17, 2012
Kyle Bass: Investment Ideas For The Apocalypse
Source: valuewalk.com
Europe’s political and monetary union has not got long left, according to Kyle Bass. The Hayman Capital founder made the comments today on CNBC’s Squawk on the Street. The network’s report on the interview can be found here. A video of the interview can be seen here.
During this Summer, we questioned Bass’ future on the basis that his bet on Japan’s default was not playing out as quickly as he might have hoped. Comparing his prospects to John Paulson’s may have been premature, but his unique perspective on macroeconomics often draws criticism.
Bass, who was made famous by his bet against sub-prime mortgages in 2008, thinks the debt accumulation across the world, which he calls “the largest peacetime accumulation of debt in history”, is making it very difficult to make good investment decisions.
The most obvious manifestation of the global debt problem is, of course, in Europe. Bass thinks the continent’s political and monetary union is only “perceived to be staying together”. To highlight his point, he concentrates on the 90% of bond value that has been lost by investors in Greek debt.
Bass also points to European history as support for the inevitability of the continent’s downfall. He suggests that countries known for tearing themselves apart with war for hundreds of years, are unlikely to simply hand sovereignty to some higher power, the European Union, or more cynically Germany.
The logjam caused by mistrust will weaken Europe going forward, and will inevitably result in a collapse of some form on the continent. Bass’ projection is one of the most pessimistic out there, and it leaves investors with very few places to put their money with confidence.
Similar problems are rampant in the United States. The confidence investors appear to have in the federal government is unwarranted, according to Kyle Bass. He sees any success in sealing the large budget deficit and the increasing debt burden as unlikely.
Neither party, if given complete control, would be able to solve the problems in the United States budget. Bass admits having taken a pencil to the budget, and discloses that the changes he had to make to balance would make anyone un-electable.
Because of the volatility he sees coming in future, Bass has been looking for safe investments, guarded from European problems, or the global debt crisis. Bass’ solution to the problem is Mortgage Backed Securities. Despite making his name from shorting the assets, Bass believes they are now relatively safe in the long run.
Half of the maven’s portfolios are made up of Mortgage Backed Securities, and he holds about 1% of the entire market in the assets. Despite his confidence in the asset, Bass doesn’t see the housing market giving great returns any time soon. The important thing for him is that he does not see the market declining again for some time either.
In the grand scheme of things, Bass calls safe any assets that are productive. Those that actually create a product in demand. Examples include natural gas and oil wells, and rented properties.
Gold is relatively safe according to Kyle Bass, but only because it forms a sort of secondary currency. It has no true value in and of itself, but confidence in it appears to be self sustaining, for the time being.
Bass is also confident that inflation is due to come creeping up in the future. He asserted that the initial rounds of money printing by the Federal Reserve, and other central banks around the world, only made up for the losses suffered in money supply during the crisis. The money printing, currently underway, will cause inflation, but it will take time.
Bass does not paint an optimistic picture of the world’s future. If anything, it is one of the most pessimistic portraits from anyone in the investment sector. Bass is betting on disaster.
In summary, Europe will collapse, the United States will not be able to solve its own debt crisis, inflation will hit sometime in the future, and debt problems will continue to plague the world for a long time to come.
In the atmosphere Bass projects, it is a wonder he is investing in anything but reinforced concrete bunkers and automatic weapons. He does have some ideas on what to go for in a doomsday scenario, and as one of the only public investors out there following this type of long term disaster strategy, his picks are certainly worth a look.
Bass has been projecting this sort of disaster for a while now, and, like his Japan picks, it may be less important that something is going to happen, than it is, when it is going to happen. If an investor locks themselves into a low returns but safe from the Apocalypse model, its difficult to choose a time to get out.
Watch the interview in full to get a real understanding of the future according to Bass. It’s a fascinating outlook, though betting on the apocalypse seems silly.
Europe’s political and monetary union has not got long left, according to Kyle Bass. The Hayman Capital founder made the comments today on CNBC’s Squawk on the Street. The network’s report on the interview can be found here. A video of the interview can be seen here.
During this Summer, we questioned Bass’ future on the basis that his bet on Japan’s default was not playing out as quickly as he might have hoped. Comparing his prospects to John Paulson’s may have been premature, but his unique perspective on macroeconomics often draws criticism.
Bass, who was made famous by his bet against sub-prime mortgages in 2008, thinks the debt accumulation across the world, which he calls “the largest peacetime accumulation of debt in history”, is making it very difficult to make good investment decisions.
The most obvious manifestation of the global debt problem is, of course, in Europe. Bass thinks the continent’s political and monetary union is only “perceived to be staying together”. To highlight his point, he concentrates on the 90% of bond value that has been lost by investors in Greek debt.
Bass also points to European history as support for the inevitability of the continent’s downfall. He suggests that countries known for tearing themselves apart with war for hundreds of years, are unlikely to simply hand sovereignty to some higher power, the European Union, or more cynically Germany.
The logjam caused by mistrust will weaken Europe going forward, and will inevitably result in a collapse of some form on the continent. Bass’ projection is one of the most pessimistic out there, and it leaves investors with very few places to put their money with confidence.
Similar problems are rampant in the United States. The confidence investors appear to have in the federal government is unwarranted, according to Kyle Bass. He sees any success in sealing the large budget deficit and the increasing debt burden as unlikely.
Neither party, if given complete control, would be able to solve the problems in the United States budget. Bass admits having taken a pencil to the budget, and discloses that the changes he had to make to balance would make anyone un-electable.
Because of the volatility he sees coming in future, Bass has been looking for safe investments, guarded from European problems, or the global debt crisis. Bass’ solution to the problem is Mortgage Backed Securities. Despite making his name from shorting the assets, Bass believes they are now relatively safe in the long run.
Half of the maven’s portfolios are made up of Mortgage Backed Securities, and he holds about 1% of the entire market in the assets. Despite his confidence in the asset, Bass doesn’t see the housing market giving great returns any time soon. The important thing for him is that he does not see the market declining again for some time either.
In the grand scheme of things, Bass calls safe any assets that are productive. Those that actually create a product in demand. Examples include natural gas and oil wells, and rented properties.
Gold is relatively safe according to Kyle Bass, but only because it forms a sort of secondary currency. It has no true value in and of itself, but confidence in it appears to be self sustaining, for the time being.
Bass is also confident that inflation is due to come creeping up in the future. He asserted that the initial rounds of money printing by the Federal Reserve, and other central banks around the world, only made up for the losses suffered in money supply during the crisis. The money printing, currently underway, will cause inflation, but it will take time.
Bass does not paint an optimistic picture of the world’s future. If anything, it is one of the most pessimistic portraits from anyone in the investment sector. Bass is betting on disaster.
In summary, Europe will collapse, the United States will not be able to solve its own debt crisis, inflation will hit sometime in the future, and debt problems will continue to plague the world for a long time to come.
In the atmosphere Bass projects, it is a wonder he is investing in anything but reinforced concrete bunkers and automatic weapons. He does have some ideas on what to go for in a doomsday scenario, and as one of the only public investors out there following this type of long term disaster strategy, his picks are certainly worth a look.
Bass has been projecting this sort of disaster for a while now, and, like his Japan picks, it may be less important that something is going to happen, than it is, when it is going to happen. If an investor locks themselves into a low returns but safe from the Apocalypse model, its difficult to choose a time to get out.
Watch the interview in full to get a real understanding of the future according to Bass. It’s a fascinating outlook, though betting on the apocalypse seems silly.
Kyle Bass: World Saddled With Too Much Debt Read more: Kyle Bass: World Saddled With Too Much Debt
Source: moneynews.com
The global economy is bogged down with too much debt, giving investors little choice as to where they should put their money, said Kyle Bass, founder of hedge fund Hayman Capital.
“We’ve never been here before,” Bass told CNBC.
“It has been the largest peacetime accumulation of debt in history.”
Investors, meanwhile, are having a tough time planning strategies, he said, adding that his “goal is not to lose money.”
Famed for shorting subprime residential mortgage-backed securities long before the housing bust, Bass told CNBC he now has about half his portfolio in subprime and partly subprime mortgage bonds on expectations that while home prices aren’t set for a noted rebound, they’re not likely to go down anymore, either.
Investors should also look for hard assets such as apartment buildings, oil wells and gas wells —“anything that has a real asset that’s productive,” Bass added.
Central banks have been loosening monetary policies worldwide, slashing interest rates and pumping liquidity into their respective economies, dubbed as money printing by the markets, which has weakened paper currencies and inflated stock prices.
Inflation will sooner or later strike, thanks to such monetary accommodation, which Bass said isn’t going to spark recovery due to the massive amounts of debt.
“We had a hyper-leveraged economy and world going into the financial crisis,” Bass said.
“We lost trillions and trillions of dollars because of that leverage. The first several trillion dollars that were printed just replaced what was lost” and had no net effect on global money supply, although as liquidity levels continue to rise, inflation rates will follow suit.
Other noted investors are making similar calls for hard assets, especially in light of ultra-loose monetary policies in the United States.
The Federal Reserve recently announced it will spend $40 billion a month buying mortgage-backed securities from banks to pump liquidity into the financial system in a way that pushes down interest rates across the broader economy to spur recovery, a monetary policy measure known as quantitative easing.
Side effects to such a policy tool include a weaker dollar, rising stock and commodity prices and mounting inflationary pressures.
Gold performs particularly well under such a scenario, especially in the wake of the two previous rounds of quantitative easing that pumped a combined $2.3 trillion in inflation-fueling liquidity into the economy.
Expect gains to continue as the dollar weakens and institutions stock up on gold as a hedge, central banks especially.
“What they used to be selling into the market now they are clamoring for and are taking off the market,” David McAlvany, CEO of the McAlvany Financial Group, told Newsmax.TV in a recent interview.
Supply constraints will add further upward pressure to gold.
“This is a commodity space where there has been very little expansion in terms of overall production, so expanded demand and minimal increases in supply, I think you have the perfect powder keg for prices going significantly higher for gold and silver.”
The global economy is bogged down with too much debt, giving investors little choice as to where they should put their money, said Kyle Bass, founder of hedge fund Hayman Capital.
“We’ve never been here before,” Bass told CNBC.
“It has been the largest peacetime accumulation of debt in history.”
Investors, meanwhile, are having a tough time planning strategies, he said, adding that his “goal is not to lose money.”
Famed for shorting subprime residential mortgage-backed securities long before the housing bust, Bass told CNBC he now has about half his portfolio in subprime and partly subprime mortgage bonds on expectations that while home prices aren’t set for a noted rebound, they’re not likely to go down anymore, either.
Investors should also look for hard assets such as apartment buildings, oil wells and gas wells —“anything that has a real asset that’s productive,” Bass added.
Central banks have been loosening monetary policies worldwide, slashing interest rates and pumping liquidity into their respective economies, dubbed as money printing by the markets, which has weakened paper currencies and inflated stock prices.
Inflation will sooner or later strike, thanks to such monetary accommodation, which Bass said isn’t going to spark recovery due to the massive amounts of debt.
“We had a hyper-leveraged economy and world going into the financial crisis,” Bass said.
“We lost trillions and trillions of dollars because of that leverage. The first several trillion dollars that were printed just replaced what was lost” and had no net effect on global money supply, although as liquidity levels continue to rise, inflation rates will follow suit.
Other noted investors are making similar calls for hard assets, especially in light of ultra-loose monetary policies in the United States.
The Federal Reserve recently announced it will spend $40 billion a month buying mortgage-backed securities from banks to pump liquidity into the financial system in a way that pushes down interest rates across the broader economy to spur recovery, a monetary policy measure known as quantitative easing.
Side effects to such a policy tool include a weaker dollar, rising stock and commodity prices and mounting inflationary pressures.
Gold performs particularly well under such a scenario, especially in the wake of the two previous rounds of quantitative easing that pumped a combined $2.3 trillion in inflation-fueling liquidity into the economy.
Expect gains to continue as the dollar weakens and institutions stock up on gold as a hedge, central banks especially.
“What they used to be selling into the market now they are clamoring for and are taking off the market,” David McAlvany, CEO of the McAlvany Financial Group, told Newsmax.TV in a recent interview.
Supply constraints will add further upward pressure to gold.
“This is a commodity space where there has been very little expansion in terms of overall production, so expanded demand and minimal increases in supply, I think you have the perfect powder keg for prices going significantly higher for gold and silver.”
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