Barton Biggs wrote columns to allow for people to help understand how he was seeing the world. For many years he was connected with Morgan Stanley helping to run its research, investment management division and the firm; later he left to manage his families money and others in a hedge fund. His columns from 2010 to 2012 were put together in the book Diary of a Hedgehog, John Wiley & Sons, 2012

One of the columns dealt with two titans in the industry – Paul Tudor Jones of the Tudor Funds and Steve Cohen of SAC. Both have and continue to be successful, Mr. Jones offers insights on his website which makes good reading. Mr. Cohen typically operates at a low public profile. SAC has 100 portfolio managers and 150 analysts, they report to 10 sector heads. The firm closely monitors the Portfolio Manager’s hit rates and when they make big money when they are right and lose less when they are wrong. Mr. Cohen wants good, big ideas and each week starts with phone interrogations Sunday afternoon, and after listening Mr. Cohen picks the best ideas.

When a big idea is selected, a significant bet of 10% and it is made quickly. It takes about 20 days for the process to run and although charts are used, fundamentals override technical. SAC used to have shorter attention spans but now looks for 3 to 6 months, during that time do not fuss with the gainers, but spend most of the time on the positions that are not doing well and listen to what the market is telling you. There are always people out there who know more than you do, if a position is not doing well it is sold quickly. The three things that can kill your business are leverage, excessive concentration and illiquidity.

Linking to dividend paying stocks, it is good to know what the large players are doing,  for they have an effect on the markets. However, if you own profitable dividend paying companies, the price is less important for your holding range is greater than three years, it could be 20 years. For holdings of this length of time as long as the company continues to earn profits and pays a dividend, the stock price will invariably go up (likely will have split) and you will be wealthier.

There are more questions than answers, till the next time – to raising questions