Going to industry conferences has been part of my job as a financial journalist. My calendar is highlighted by a few personal favorites: January's World Economic Forum in Davos, April's Berkshire Hathaway's annual meeting in Omaha. Then, there is the Sohn Conference Hong Kong in June.
But after writing about the stock picks shared by top hedge fund managers for the past two years (read those here and here), I'd like to instead share some personal observations about the annual gatherings of a roomful of alpha males.
A hedge fund crowd sends off a very different energy compared to other groups of professionals, including their close peers in private equity. During the five hours of the annual event, the Hong Kong Jockey Club Hall at the Asia Society was filled with dapper-looking young professionals, over 80% of whom were males.
Everyone was either engaged in heated discussions or hastily swiping on a mobile phone. The testosterone-filled room emits exclusivity. A group of elite high achievers form tight social circles impenetrable to outsiders.
But why do hedge fund managers adhere to these peculiar social cues? Compared to technology investment events where sandal-strutting entrepreneurs may have far more wealth than some of these intense-looking Rolex-wearing suits, the atmosphere surrounding many hedge fund events seems dinosaur-like and filled with pretension.
There is a valid reason why the industry needs to operate with some kind of secrecy. Trading ideas can be easily stolen, copied and manipulated. People feel they must show a poker face as well (many hedge fund managers are great card players), because being careless will get them killed. It's important to put up walls and hedges.
Yet I see no reason why alpha males can't be more open or friendly even at a very shallow social level. A sense of humor would be a wonderful start, but perhaps that's just being naive?
I've met many interesting hedge fund managers in my reporting career. They tend to be veterans and founders of successful hedge funds. Perhaps after such a long time in the industry, they can afford to look beyond the cut-throat competition that's the norm within the industry. They can relax. They can let down their guard because they are truly confident in their abilities.
So with that sense of confidence, let's share some stock tips coming out from this year's Sohn Conference Hong Kong 2016 presented by the Karen Leung Foundation. Here is a quick list, but do remember to conduct your own research:
1. Short TYO:6971
2. Long offshore debt of HK:1638
3. Short HK:03823
4. Long NSE:SKSMICRO
5. Long CNGO:OTC US
And a footnote on BFAM Partners' Benjamin Fuchs' bet on single B-rated Chinese property developer bonds from last year's conference. It was my favorite, and it turned out to be a good trade after all. A diversified basket of this debt yielded returns of 16%.
Let's see how this year's bets perform in June 2017. Stay tuned, and smile!