About

I founded hedge fund manager Prescience Investment Group as an answer to the market events of 2008.  I firmly believe that over a multi-year horizon, trillions more in financial wealth are set to be destroyed in the developed world, but through the heart of my pessimism runs a silver lining: we are embarking on what in retrospect will prove the investing opportunity of a century.  I will elaborate upon our views in the near future.

This blog is a medium through which I’ll randomly muse, intellectually debate, and share ideas and research in an effort to help you in your endeavor to preserve and grow capital.

I am by background a value investor who has worked in the hedge fund industry for several years.  I began by analyzing instruments throughout the capital structures of over-leveraged companies and special situations across numerous industries for a couple of opportunistic distressed/special situations funds  (i.e. invested in the debt securities of distressed companies, high yield bonds, and special situation equities). I later engaged in GARP-style equity investing with another.  With a contrarian tilt, my experience entails going long and short pretty much any layer of the capital structure  in either a directional or hedged manner.

I am not in the camp of value investors that says it doesn’t pay attention to the macro picture.  I do however agree that macro developments are near-impossible to time.  The role of the professional investor then is to identify the most flagrant risks lurking in the system, to conceptualize a realm of possibilities should those risks reproduce and spread, and to position his portfolio to tolerably withstand the disaster scenario should the disease flourish.

What began to unfold in 2007-2008 was to any investor familiar with economic history a scenario clearly within the realm of possibilities (historically tight bond yields and equity risk premiums, historically high bond and loan issuance in the face of deteriorating underwriting standards, household debt levels that had surpassed previous highs set prior to the Great Depression, etc).  We were living the recipe for disaster, and most are now half-baked.  Having another year, or another 2 years, like 2008 is also within the realm of possibilities.  Managing money for absolute rather than relative returns necessitates the bottoms-up investor to worry about and protect his portfolio from top-down risk: And this is the case because the investing environment is adjusting to the turn in the long-term debt cycle.  Hence, the prudent management of a portfolio boils down to managing its duration, shunning risk when excessive and greeting opportunity when abundant.

Consider this blog an open platform.  Is there something in particular you would like to hear about?  Does the hedge fund industry or Wall Street mythology peak your curiosity?  If so, you are likely wasting brainspace and I would love to assist in resolving the issue.  Should you be investing in distressed debt, high yield bonds, or special situation and small-cap GARP equities, let us pool our knowledge and share our resources.  I encourage you to share your ideas and to take to voicing your opinion.

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My journey into this business has been slightly unorthodox:  I had my beginnings in what was once a small country town — Denham Springs, Louisiana — and accompanied by one twist of fate after another and a heavily shaken concoction of effort, made my way to Wall Street.  After several years of working with some very smart individuals, and living amongst and befriending countless others, I have come to develop a true appreciation for money management — a business in which reward remains a function of aptitude, effort, and a chosen level of risk exposure.

But alas, for how long might this be the case?  Things are changing and the investment landscape evolving.   The current period will prove one of uber-regulation, risk aversion and wealth transference on a massive scale.  Who is the beneficiary?  Who will fall, and who will emerge in his place?  Making money make money in light of what I believe an extended down phase of the investment cycle is primarily a question of who will survive and have the dry powder to sift the rubble for opportunity.

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One Response

Good stuff – looking forward to reading more!

I view investing as more “managing risk – both seen & unseen risks – than anything else. Creating a margin of safety with a wide moat is the best way I have found. Would be nice to get your views on this. Have a goood one!

8 responses

12 10 2009
Lance Paddock

Excellent stuff. We need to talk. Could you e-mail me?

2 02 2011
Chet Chhor

Wow! what an concept ! What a concept ! Stunning .. Astounding ? I typically don?t submit in Blogs but your weblog forced me to, amazing get the job done.. lovely ?

8 02 2011
Blogging to the Bank 2010

Thanks a ton for posting this, I discovered it quite informative, and it answered most of the concerns I had.

1 03 2011
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When will you post again ? Been looking forward to this !

2 03 2011
Mammie Schwipps

I’ve been here a few times and it seems like your articles get much more informative every time. Maintain it up I enjoy reading them.

4 03 2011
Karlene Saalfrank

hopefully this comment doesn’t appear multiple times (it appears to freeze once i try to post my comment.. not sure if it’s actually posting), but all I really wanted to say was fantastic post and thanks for sharing.

6 03 2011
huntingt blinds

Great post! Thanks for sharing.

8 03 2011
Tosha Letcher

i believe you have a nice page here… today was my first time coming here.. i just happened to discover it doing a google search. anyway, fantastic post.. i’ll be bookmarking this page for sure.

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