[GASPS]
My 10 is not on. This is too much. I'm still waiting for this. I'm not sure if I can get it. No, you're just a bit late. You're just a bit late.
You're just a bit late. You're just a bit late.
“You're just a bit late with a few things.”
Just a bit of a nightmare. You're just a bit late with your own hands. Okay, that's great. More comfort, craft and dynamic. All of the steps.
All of the steps are just a bit late. Altra, stay out there. Where are the things that are going to happen? And where are the things that are going to happen? Of course, in the Russian European Union.
With the biggest reason in the world. A lot of thousands of things are going to happen with a lack of light and light in the air. The Vivii, the Russian D.E.
The most important thing is the idea.
But let's talk about the program. Why? The Jonas Kaer-E.A.B. on the side of the building sets the idea, quickly and simply patch it on a gabby. On the app, website or digital tool.
The Kaer-E-Bautus and with one click-it-a-slif. Domain and sicheres hosting of European Servan inclusive. Now, turn up 9 Euro-promonahts. On the Jonas.de/app. Jonas, digital and their site.
I'm Nicole Lappin.
“The only financial expert you don't need a dictionary to understand.”
It's time for some money real. (upbeat music) What have I told you, you can actually just let a billionaire do your investing for you. Like, piggyback on Bill Ackman.
Ride shotgun with the guys who have entire research teams and private jets and Bloomberg terminals of 24/7. Well, as of this year, you can pretty much buy a piece of Bill Ackman's brain on the New York Stock Exchange. So today, I'm going to show you how to invest alongside
some very famous hedge funders, which vehicles actually let you do it and the number you really need to pay attention to, if you do. Option one, the closed end fund. A closed end fund raises a fixed part of money once then it trades on an exchange like a stock.
This is a rare option. Bill Ackman, who was on the show just a bit ago, did this with his hedge fund Pershing Square. Basically, launch a fund called Pershing Square USA. Take a simple PSUS on the New York Stock Exchange.
It priced at $50 a share and raised about $5 billion
making it the largest, closed end fund launch in US history. He's simultaneously took the management company itself public under ticker PS.
“The pitch was basically birch your halfway,”
but you get it on the ground floor. 5 PSUS and your money rise alongside Ackman's portfolio. Now, Ackman has had years where his fund had returns over 50%.
But it is not all sunshine and rainbows 24/7. PSUS fell 18% on the very first day of trading. As of mid July, it was trading around $37 a share, while the actual investments inside the fund were worth almost $48 a share.
Bill actually called that out when he was on the show. So why would the same stock sell at a discount? Well, for closed end funds, there's the share price and then there's the value of its underlying investments. That's called net asset value or NA.
These two are different numbers. They float independently based on supply and demand. When the share price is below NA, the fund trades at a discount when it's above it trades at a premium. At the time of recording this,
PSUS is trading at roughly a 22% discount. Ackman's older fund, pushing score holdings, which trades over in London and in Amsterdam, has spent years stuck at a similar discount.
That discount is basically the market saying,
"Cool portfolio bro, but we're not paying full price for the risk that you make a bad call, and we don't love your management fees." Ackman himself pointed out the PSUS discount adds up to something like 11 years worth of management fees.
Option two, buy the manager, not the fund. This is the equivalent of the PS sticker that I mentioned for Pershing Square. You're buying the actual management company. When you buy a listed asset manager,
you're not buying their portfolio, you're buying their fees stream. Every dollar they manage throws off fees, whether they're bets go up or they go down. This is why publicly traded giants like Blackstone
and KKR have been such monsters over the last decade. My hot take care is for most people, owning the toll booth itself is smarter than owning all the cars going through it. Managers get paid no matter what.
In good years and in bad years, but know what you're buying. You're buying a fee machine, not a stockpicking genius. Option three, the insurance flow trick. This one is one of my favorites.
David Einhorn, Legendary Shortseller, the guy who called Lehman Brothers collapse before it actually collapsed, runs a publicly traded re-insurance company called Greenlight Capital Rhee, Picker Symbol GLRE.
An insurance company collects premiums today and pays out claims later on, right? So it's sitting on this giant pile of cash in the meantime called Flow. At Greenlight, the flow gets invested
by Einhorn's hedge fund. So when you buy GLRE, you're getting insurance profits
Plus a side of Einhorn's stockpicks.
This is the exact structure
“worn buffet used to build Berkshire Hathaway,”
insurance flowed as free investment fuel. Speaking of which, option four, V-O-G. Berkshire Hathaway ticker symbol, BRK.B for the version
that normal people can afford. I'm not exaggerating carrot Berkshire Hathaway. Each shares are currently trading at over 768,000 dollars a share. While B shares are trading at just over 500 bucks a share,
and of course you can also buy them fractionally. Buffet officially handed the CEO rolloff to Greg Abel on January 1st, though he is staying on as chairman. Berkshire is now sitting on a record
pile of cash, nearly $400 billion,
which tells you that the world's best investor is having
“a lot of trouble finding cheap things to buy right now,”
just saying. I have done a whole episode on the final Buffet chapter, and I'll link that in the show next to you. And last but not least,
the copy can't ETF. There are funds that actually scraped the required quarterly disclosures that big hedge funds have to submit to the SEC,
then they buy their most popular positions. The global ex-Goor ETF,
Global Group, is the best known one
that's still standing. Now, it sounds really smart, but here's the giant asterix. These disclosures come out up to
45 days after the quarter ends,
“so you're always getting delayed information.”
And they only show long stock positions in the US, not shorts, not options, not hedges, that make a hedge fund a hedge fund. I'm a little bit more skeptical
on this one, but I just want you to know that it does exist. So which one is right for you? Honestly, none of these should be more than a small slice
of your overall portfolio. Investing alongside a famous name is fun, but fun and diversified index fund are not in the same financial group.
But by the way, you can't spell index fund without funds. Just saying, it should be a small slice. The biggest mistake I see people
made is confusing a great investor with a great investment. The people, the price, and how their strategy maps onto orders are all separate questions.
For today's tip, you can take straight to the bank. If you're going to buy a close and fund like PSUS, hunt for a discount and hunt for it
in December. This is a real hot tip here, but closed and the funds routinely trade below the value of what they own,
and that discount gets widest at the end of the year when investors are trying to dump their losers for tax write-offs in what's called tax loss harvesting.
That artificial pressure can push discounts to their deepest point of the year on funds whose actual holdings
haven't changed a bit. Try to swoop in then. And if you do, you're basically buying a dollar of assets
for 80 something cents on the dollar. So you're not just buying the billionaire, but you're buying the billionaire on sale.
