One Familys Blog: 01/12

Tracking Soros Fund Mangement Holdings

George Soros is the founder (1969) and Chairman of Soros Fund Management, a hedge fund management firm. In the four decades through 2010, the fund posted exceptional returns, averaging a 20% annual rate. With an estimated Assets Under Management [AUM] of $25B, the fund currently operates as a "family office" -- in July 2011, outside investors were informed their money would be returned. Read more at Seeking Alpha...

Short Selling Strategy for Value Investors

The perils of short-selling can be summarized in a simple statement: “Upside is limited to 100% but downside is unlimited”. Some of the famously successful short-sellers such as George Soros are known to use strategies that limit the downside risk to less than the size of the initial short position while increasing the upside potential over 100% by using variations on the following strategy:

Set up stops at higher prices to close parts of your position, if the stock moves against you. The amount to close should be such that the size of the position remains at ~1%.
Set up entry points at lower prices to add to your short position, if the stock goes down. The amount to add should be such that the size of the position remains at ~1%.

An example follow:

Say your portfolio size is $100K and you want to start a 1% short position on XYZ stock priced at $10. So, you short 100 shares at $10.
If the stock doubles, close the short position and your loss will be $1K, or 1% impact to your portfolio. So, your losses are capped at 100% of your initial position. The same strategy can be used to close parts of the position at more granular points rather than waiting for the stock to double before closing. That can reduce the downside risk even more. In our example, if you dispose 50% of the position when the stock increased by 50% ($150) and disposed the rest when the stock doubled, your total loss is 75% of your initial position.
If the stock drops 50%, increase the short position so as to keep the size of the position relative to the portfolio size constant at 1%. This ensures that the portfolio impact will be more than 1%, or more than 100% of your initial short position. In our example, if the stock drops by 50% to $5, sell short another 100 shares so that the size of your short position remains at 1% of your portfolio (200 shares * $5 = $1K or 1% of your portfolio of $100K). At this point, you netted a total of $1.5K by selling short the 200 shares. Now, if the stock goes to zero, your profit would be $1.5K or 150% of your initial short position for a 1.5% overall portfolio impact. The strategy can be used in a more granular fashion to increase the return potential even further.

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Last Updated: 04/2012.

Tracking Bill Ackman's Pershing Square Holdings

Bill Ackman, a New York hedge fund manager, is the founder and CEO of Pershing Square Capital Management LP. Currently, he operates three funds: The Pershing Square, Pershing Square II, and Pershing Square International. The inception date of the flagship fund Pershing Square is Jan. 1, 2004, while that of the latter two funds are a year later at Jan. 1, 2005. Cumulative returns for the funds as of Q3 2011 stood at ~300%, ~200%, and ~160%, respectively, compared to the low-double-digit returns that most indices returned during the period. Read more at Seeking Alpha...

Munnar Trip Report

Munnar, a hill-station in the Western Ghats,

ranked high in our list of must-visit places for our first summer vacation back in Kerala. Located at 1600 meters above sea level, it is considered among the most beautiful hill-resort towns in Southern India.

Munnar is less than 120 km east of Kakkanad but the trip can take upwards of three hours – it will be lot longer for first timers, as stopping by the many vista points along the way is a given. Our visit was during the first week of May: August to May is considered high-season as the monsoons are light or non-existent during those times. A minimum of three days is required to relax and enjoy everything Munnar has to offer.

Munnar boasts a large array of hotels and resorts that vary in pricing from below

Rs 1000 for budget cottages like JJ Cottage in Old Munnar to those as high as Rs 15K for a 1000 square foot villa at Windemere Estate. We chose to stay at the Marthoma Retreat Home (Rs 2200 regular, Rs 1800 with discount), a mid-priced place run by the Marthoma church group who manage a number of charities for the locals including a nursery school – as service levels are slightly below par, it cannot be strictly classified as a resort hotel. Nevertheless, the location is perfect – nice view and only a kilometer away from Munnar city area on Mattupetty Road.

Our first stop on the way there was

Cheeyappara Falls located between Neriamangalam and Adimali on NH49 (about 75 km from Kakkanad). The falls feature seven steps and there is a short-hike up to a vantage location behind the falls. Facilities are very limited and a certain amount of garbage dumping affects the beauty of the place, but overall it is a good stopover option. Bathing is prohibited as falling rocks pose a danger. Around 10KM from Munnar town is the detour to Pallivasal Hydroelectric Project. On both sides of the road are giant pipes that run down to the power station area and tagging the pipes are a hiking option. Tea estates blanket the area surrounding Chithirapuram.

Eateries catering to all budgets are aplenty in and around Munnar. At the low-end of the spectrum are places such as Saravana Bhavan (meals on leaves for around Rs 50) and the smaller, less crowded and a slight step-up alternative Annapoorna Restaurant. Several lunch buffet options in the Rs 200 vicinity are also available as mid-range options. At the high end are major resorts with exclusive restaurants that feature fancy buffet fare.

The first of our two road-trips in Munnar was on the Mattupetty Road to the Dam and Top Station. Top Station, located 37 km away on the Kerala-Tamilnadu border with panoramic views of the Western Ghats, is a good hiking spot.

About 10 km into the road-trip is Mattupetti Dam with street vendors hawking their ware on either side of the road past the bridge. Speed boat rides are on offer here at about Rs 300/- for 15 minutes (4-5 people max).

Nearby is an Indo-Swiss farm where the Kerala Livestock Development Board (KLDB) rears more than 100 varieties of high-yielding cattle. Unfortunately, visitors are no longer permitted to enter the farm. Further on this route a few kilometers apart are Echo Point and Elephant Arrival Spot – two attractions worth a stopover. The former is a scenic spot beside a small lake – any sound produced is echoed back from the surrounding hills and hence the name.

The latter is a spot from which wild elephants can be viewed occasionally – an elephant ride is offered sometimes for around Rs 350/- pp. The best spot in the entire road-trip is Kundala Lake, whose access is via an unassuming approach road in dire need of maintenance. This stunningly beautiful lake is a great picnic spot. Boating on the lake is a major tourist activity and all kinds of boats are available for rent including the Kashmiri Shikara – pedal boats are the easiest to handle.

A few yards from our retreat on Mattupetty Road is KFDC Floriculture center, an exquisitely maintained botanical garden. Entrance Fee is very nominal (Rs 10) and is open from 9AM to 5:45PM – as with many government run properties in Kerala, pricing is bizarre for certain things – professional camera use is an exorbitant Rs 500/- while regular or mobile cameras are just Rs 20. The facility houses a huge display of regional flowers and other exotic items. Local spices are also available at the counter for reasonable prices – the star attraction is sandalwood from the famous Marayoor area, the only place in Kerala where sandalwood trees grow naturally.

Our second road-trip was on the Marayoor road. Marayoor is 40 km away.

Major attractions en route include Tata Tea Museum and Eravikulam National Park (2 km and 15 km from Munnar).

Eravikulam National Park has the reputation of being the cleanest park in India and is the site of Nilgiri Tahr, an endangered species of mountain goat. By Indian standards, Eravikulam National Park is a great facility with a well-organized setup. The place is however very popular and so it is best to try and reach there by around 7:30 AM – technically the place opens at 8 AM, but the ticket counter is usually functional only by 8:15 AM or so. A mini-bus transports the ticket holders (Rs 45 for Indians and Rs 230 for foreigners) to the park entrance (~2 miles up).

The main entrance area has a nice building with a curio shop (stocked with themed T-shirts, caps, books (such as The Book of Indian Birds by Dr. Salim Ali), local honey and chocolate, and a snack bar. The best place to see the Nilgiri Tahr (Varayad) is a mile away and is a good trek.

Plenty of Neelakurunji (a plant species that blooms every twelve years turning the entire Rajamalai blue - next flowering expected in 2018 between July and December) can be seen here – ask a park ranger to point out this unassuming plant species, when not blooming. Anamudi Peak, the highest peak south of the Himalayas is inside Eravikulam National Park – trekking in the area is possible, but advance planning is of essence. The natural sandalwood forest in Marayoor (25 km from Eravikulam National Park) is well worth a visit, which unlike most places in Munnar is not at all commercialized – a children’s park extending 2.5 acres under the canopy of a single banyan tree is a prime tourist spot.

Last Updated: 9/2016.

Tracking Bruce Berkowitz's Fairholme Fund Holdings

Bruce Berkowitz, a Miami fund advisor, is the founder and managing member of Fairholme Capital Management, LLC. He is the advisor for three mutual funds: Fairholme Fund (FAIRX), Fairholme Focused Income Fund (FOCIX), and Fairholme Allocation Fund (FAAFX). Read more at Seeking Alpha...

Holyland Trip - Gotchas to avoid

Holyland trip was our first time traveling with an organized tour group. Undoubtedly the biggest edge such arrangements have is the ability to provide the vacationer the opportunity to experience much more compared to when going solo. However traveling with a group has numerous catches too. Below is a list – not all applies to everyone as some are specific to the tour group we traveled with while others are more generic:

1. It will be a while before folks used to western way of traveling get the hang of local tour operators in Kerala. Training for the tour company personnel is usually lax. When seeking information, the cardinal rule is to check with those holding managerial positions. We tripped up several times not knowing this modus operandi:

Upon contacting over the phone, it is the norm for the representative to mention they will get back to you. While this is probably uttered in good faith, they never get around to actually placing that call – the client is expected to call back. Prior to booking our trip, we had numerous concerns and almost every time we called, this was the pattern we experienced. The irony was that in order to get us to sign up, they even offered a house call to furnish us with all the details of the tour which was again a no-show.
During our initial contact with the tour personnel, it was mentioned that fare price was inclusive of food, although lunch will generally be snacks in order to save time. While we were fine with this, it was a pleasant surprise to have proper buffet lunch everyday.
The price was quoted as Rs 59.5K (~$1320) per person when we paid the advance. About two weeks before the trip, we went to the office and paid the rest of the amount. Couple of hours later they called to inform they had omitted to inform the trip cost has increased to Rs 60.5K (~$1345). To say we were irritated with them for not mentioning this fare hike while we were in the office was putting it mildly.
We had signed up for the 11-day tour that included two days in Syria. The advance amount was quoted over phone as Rs 10K (~$220) per person. But, at the time of paying this amount, the person at the desk informed the advance for the trip with Syria is Rs 25K (~$555). When we hesitated, they were fine with Rs 10K – unprofessional.
There was a mention of Rs 5K discount for kids between ages 5 and12, and we specifically asked whether the accommodation for the four of us (two adults and two kids) were going to be in a single room with extra beds or pull-aways. The staff vaguely said we should be provided adjacent rooms with a common door - the vagueness should have clued us on the reality. Had we known this, we would probably have paid the extra to get an extra room – with just one shower, getting ready on days when wake up calls were very early was indeed a challenge.
The tour company promised an orientation session a month before the actual trip. Four weeks prior to the departure date, we called to inquire about this. To our chagrin, they flippantly told the tour might be postponed by three weeks. They promised to call back the same day with details but never did. Since we were bent on getting the facts, we stopped by their office - the staff reiterated their words and offered various reasons for this change. Difficulty in confirming the flight tickets – lack of people signing up for the trip – election dates clashing – and others along similar lines featured in this laundry list. At that point, we asked to initiate cancellation procedures. After some internal discussion we were connected with the manager who explained how they had to accommodate a Syria tour request three weeks out. Hence they had to compromise on the Syria leg of our tour group. A Holyland tour (excluding Syria) on our promised dates was still ON and if we wished we could be part of that group. As we had scheduled our vacation around these dates, we decided to go with that and got everything in writing. It took a while to get over the half-baked responses of the admin.
In-spite of having photocopies of our passports, they forged ahead with the process for optional medical insurance only to refund that money after they realized the medical insurance company insures Indian passport holders only. This is another instance where lack of training shone through.

All in all, our takeaway was that the tour company staff was incompetent – not only were they tightfisted in providing information but also unreliable on the information given out. Hence it was mind blowing that they pulled-off an almost perfect trip.

2. Travel companions are an unknown when traveling with a group unless you are going in your own group (tour operators generally require more than 40 people in a group to facilitate this - common-interest group of some kind will work well - church members going together is common with Holyland tours). Either way, it is worthwhile to consider the following when booking a Holyland tour:

Surprisingly, Christian faith beliefs are all over the map and is highly influenced by the sub-group they belong to. Some have conflicting views on certain aspects of the religion. The way of praying can also be diametrically opposite. It is best to be aware of these differences and if at all possible be with a compatible group. Otherwise, it is conflict in waiting as there will be different views on what is worth seeing and for how long. An ecumenical approach (though not always reciprocated) will certainly help in promoting harmony if you end up with a diverse group.
Tour operators with offices in different states in India sometimes combine clients from different states on the same tour. In general, this is not ideal as a lot of communication happens in one of the local languages and folks from other parts of India will have a hard time interpreting what is said.
Proprietors of tour companies generally have personal-level contacts with local businesses in the Holyland. For those who are flexible with dates, it is certainly advantageous to book for a tour when the proprietor is traveling – for then the tour operators at the host countries they employ, hotel staff, and restaurant staff aim to impress the proprietor by putting in extra effort.

3. Keralites generally rate their table manners and hygiene levels as good, which is generally not true. At the very minimum the following should be observed to avoid embarrassment for you and fellow travelers:

Keeping the mouth closed while eating.
Avoid using the soiled plate for seconds in a buffet setting.
Use utensils instead of relying on bare hands at the table.
Use de-sanitizer before and after using the toilet (restroom).

4. General information to be aware of include:

It is a widely-held notion that Holyland tours from Kerala are geared towards older folks. Hence it is usual to find a significant percentage of retirees on such tours of which a small minority is not all that mobile. Tour reps usually have processes in place to accommodate their inability while making sure the rest of the group is not slowed down. This is something to keep in mind for in certain situations prodding the rep may be necessary.
Most of the places visited have souvenir shops and the tour reps usually allot time for shopping at certain shops. In general, such shops generally do not have the best bargains. For those with good bargaining skills, street vendors provide the biggest bang. Bethlehem, old Jerusalem, and Cairo are better places to shop in terms of value compared to other parts of Palestine, Israel, and Egypt.
Water shortage is real and many restaurants do not serve complimentary water. Tour operators generally supply limited amounts of bottled water. It pays to label the bottles and keep them around for the length of the day.
Most parts of Israel religiously observe Sabbath from a few minutes before sunset Friday evening until a few minutes after the appearance of three stars on the Saturday night sky. Religious areas see very little activity during this period. Tourists need to be aware that Jewish hotels run Sabbath elevators which automatically stops at all floors – they are specifically marked and allow religious Jews to circumvent the Jewish law which prevents them from operating switches.
Unlike most churches in Kerala, the holy places in Israel permit footwear. Tourists need to heed this as the exit is usually different from the entrance.
As it is a long 9-day trip, folks assume they would be seeing most of the sights the area has got on offer. Nothing could be further from the truth. It is important to realize that many tours take upwards of nine days to cover each of the three major countries in this tour (Jordan, Egypt, and Israel) as a single tour. Understandably this tour covers less than 20% of the tourist spots – hopefully, the best parts important to you are included. Our tour did a good job covering the important Christian sites and also tried to accommodate as much other sites of common interest as possible.

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Last Updated: 12/2012.

Basutoland - Travel/Philately/Numismatics/Memorabilia Profile

Basutoland was an independent native state in

South Africa which was annexed to the Cape Colony in 1871. In 1881, control was transferred to the British Crown and a separate British Crown Colony was established in 1884. Following independence from the United Kingdom on October 4, 1966, Basutoland was renamed the Kingdom of Lesotho. It has a total land area of just over 12,700 square miles and a population of over two million. The area is surrounded by the Republic of South Africa.

Philatelic Profile:

The area of Basutoland used stamps of Cape of Good Hope during the period from 1871 to 1910.

From 1910 to 1933, it used stamps of the Union of South Africa. The first stamps of Basutoland were a set of ten stamps released on December 1, 1933 showing a crocodile and river scene along with a portrait of King George V (KGV) in different colors and denominations. The set (Scott #1 to #10) catalogs for around $245 MNH and around $345 Used. A very similar design with the KGV head portrait replaced with a KGVI portrait was used in a set of eleven stamps in 1938. That set (Scott #18 to #28) is more affordable at around $75 MNH and around $60 for Used.

Common design types along with a several original designs in short sets formed the stamp issues of Basutoland during the period till 1966.

Most of the sets are not that valuable cataloging well under $10 for MNH or Used. The Queen Elizabeth (QEII) local scenes set of October 18, 1954 is however valuable and sought after. The set (Scott #46 to #56) catalogs for around $75 MNH and around $55 Used. The designs show Qiloane Hill, Orange River, Mosotho Horseman, Basuto Household, Malet-sunyane falls, Herdboy with lesiba, Pastoral scene, Plane at Lancers Gap, Old Fort Leribe, Mission Cave House, and Shearing Angora Goats. Basutoland adopted a new currency (100 Cents = 1 Rand) in 1961. A few surcharge overprints along with varieties of some earlier sets using the new currency appeared during the period from 1961 to 1963. The issues have valuations in a similar range to that of the original issues. Stamps of Lesotho replaced stamp issues of Basutoland in 1966.

Last Updated: 12/2015.