(B)(N) Hippo & Sloth LLC

Hippo & Sloth LLC

Deal Book. Our “family office”, Hippo & Sloth LLC, has been trying to keep-up with Mr. Ackman and his hedge fund, Pershing Square Capital Management, but we’ve run into a cash flow problem.

We bought the short on Herbalife for $7 million and 200,000 shares at $35, but we’re now out-of-pocket for a similar amount because the shares were trading at $70-$80, for a while, and we dread the day that Herbalife might declare a dividend or a rights offering.

And we’re waiting for some “action” on our Allergan holdings, although we wonder how the acquirer, Valeant Pharmaceuticals, can turn-on the lights every day, let alone raise $40 billion to buy the company, which doesn’t want to be bought.

Fortunately, our investment in CP Canadian Pacific is way-up, but Mr. Ackman has been reducing his rather large holdings, to buy other things, although he seems to be happy with their management, now.

Mr. Ackman also thought that J.C.Penney was ripe for a turnaround at $15 and we’re out-of-pocket at $10 per share, right now, but what can we do? Maybe we should just sell the stock, too, or buy a “tie” to help them out (The Street, August 18, 2014, Sozzi: J.C. Penney’s Surprise).

The “family” thinks that an IPO is a good idea – we’re pretty close to the curb, but it is our middle-name, with two p’s (New York Times DealBook, August 13, 2014, Ackman’s Sales Pitch for His Hedge Fund, and His I.P.O.).

They also thought that “dividend rights” was a good idea (Reuters, August 14, 2014, Pershing Square sues U.S. over Fannie Mae, Freddie Mac) but we convinced them that taking-up a collection at the office was a better one.

For more information on real “risk management” and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“; we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class action, La Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in America, Big Oil, Shopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond™
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.