Muffie on Markets

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

I must admit that I feel a little guilty that I have been so absent and neglectful of my many fans. To make it up to you, I know my many fans will be thrilled to learn that it is now quite easy to show your love and support for me at home or in the office with this new Muffie Benson-Perella Luxury Tea & Coffee Mug (hereinafter “LTCM”). Emblazoned prominently with your humble author’s morning office-recovery ritual, it is an ideal gift to yourself, a reward for permitting yourself the finer things in life, particularly in times of trouble and when resentment has grown to absurd levels. Perfect for engineering your own Monday morning office-recovery after a bit of well-deserved Sunday night self-indulgence with the BFFs!

Though I know none of my fans would even dream of microwaving your tea or coffee, but it happens to be microwave safe anyhow, just in-case jealous co-workers or family members should “borrow” your perfect beverage container for extended periods without first asking.

Reward yourself today, because the Muffie Benson-Perella LTCM won’t be around forever!

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

Investing is hard work. It requires a certain kind of dedication. It is not for everyone and there are any number of temptations to lure one’s focus away from the important tasks at hand. That’s why invitations like this just break my heart:

From: “xxx xxxxxxx” <xxxxx@FOXbusiness.com>
Date: April 14, 2008 8:10:28 AM CDT
To: <muffie@muffmarkets.com>
Subject: Fox Business

Hi,

I work for the 5pm show on Fox Business called Happy Hour and we would love to have you as a guest on the show. The show is live from 5-6pm at the Bull and Bear in the Waldorf Astoria (49th and Lexington). I look forward to speaking to you soon.

Best,

xxxxx
Fox Business Network

212-xxx-xxxx

I really don’t even know that I have the heart to tell her that I am too busy to attend. Especially because cocktails at the Waldorf Astoria sounds like so much fun! Plus, I’ve always wanted to meet Cody Williard!

Cody runs his own hedge fund, you know. I guess it started really small, like $15,000 AUM (that’s “assets under management”) or something really small. But that’s just what I heard. I’ve never met him.

I guess he must not get along with his parents very well or something if he didn’t start with more. That must be connected to the whole songwriter and musician thing he has going on with his band and all. Still, I can’t figure why his uncle or his grandfather didn’t help him out. Uncles and grandfathers (but particularly uncles) are great sources for capital when parents are in a mood. The sibling rivalry really kicks in and smart investors will use any advantage they can to leverage this for themselves.

I will have to think before I reply to Fox Business. I mean, I think I would look fantastic on the show, and I really think my particular brand of investment wisdom would really fit with the young, “on-the-go” Fox Business viewer, but, you know, focus focus focus.

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

I used to think that being a generalist was a good idea, since it is hard to come up with investment ideas, and I wanted to have the most opportunities available to me without annoying restrictions. For my entire life I have found restrictions annoying and burdensome. But recently, I’ve realized that I have a deep expertise in financial services, particularly given my experience in the area.

So I have started to look at the prestigious investment banks. I found some interesting things. For example, Bruce Wasserstein, who runs Lazard, went to Harvard Business School and Harvard Law. Reputation and expertise being as important as it is in investment banking, it seems pretty clear to me who is worth betting on. Then I did some more analysis.

Bruce has surrounded himself with good looking executives who have more than a passing resemblance to Hollywood stars. That’s foresight in hiring.

Bruce Wasserstein and company

And so, with a market order at the open MuffCap added LAZ today @ $36.75

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

Muffie on Markets has been asked to join the Forbes family! How’s that for appreciation?

Hi Muffie!

You are invited to join the new community of the high quality business and financial bloggers from Forbes.com. Our community - the Business and Financial Blog Network, will launch shortly.

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

So I promised weeks ago that MuffCap’s first trades would go up on these pages. Things got really busy, however. Putting together a hedge fund is hard and difficult work. Be this as it may, I have launched operations.

Keeping abreast of markets requires a lot of work, and it is also a very trying process. I set up CNBC on my new flat panel in my new “study” and bought a new desktop with four flat screens to run my trades and do research. It’s a different schedule for my life, that’s for sure.

Then, of course, there is the issue of deciding on a strategy, and the initial entry. I decided on a very general and broad strategy (daddy says flexibility is key in investment) without particular investment horizons or holding periods. That all seemed so restricting and I really didn’t want to decide on anything more specific.

I spent most of last week and the week before trying to do research and come up with trade ideas.

Of course, it is hard not to hear about the “credit crunch.” Everywhere I looked it was on the front page. So I felt like it was time to get involved.

To me, the entire mortgage fiasco is overblown. No one, and I mean no one, I know has had any problems paying their mortgages, or (for those people who already own their estates outright) paying the upkeep and expenses requirement to manage the property. Of all the expert property owners I surveyed, none had problem mortgages.

Given this, I really wanted some exposure to the “panic” so that I can take advantage of the subsequent “melt-up.” The two best holdings, at least if you take the frequency of their mention in the financial press are Bear Stearns (BSC) and Lehman Brothers (LEH).

Before I could get into Bear Stearns, it blew up badly because of liquidity fears, but Lehman not only hasn’t blown up, but is a huge bargain. The reality is that Lehman has always had better presence, better brand name and better people than Bear. That is worth a lot to me. Plus, you can’t sneeze at a firm that has one of the girls as a CFO. (Of course, she’s a Harvard grad too).

Erin Callan

True, we might have to work on the hair a little, but I know Erin won’t let her Crimson sisters down. Lehman it is.

Had I tried to pick it up last week I would have paid in the range of $50 a share. This morning I picked it up for $44.63 and I’m already sitting on a 2% gain! Off to the races!

The rest of this week will be about trying to put more of MuffCap’s money “to work.”

Feel free to email me or IM me with investment ideas!
muffie AT muffmarkets.com
AIM: muffiehbs05

via: lolstreet.

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

Setting up a hedge fund can be a daunting task. Of course, the first issue is the money. Seed capital is used to pay attorney’s fees to form the underlying entities. Accountants have to be retained. Brokerage accounts opened. Dinners to be consumed with people important to business development. All that sort of thing. Only after all that has been completed and everything is in place can you work on putting together a strategy for investment. A few of the attorneys whined about this since the strategy discussion had to go into the placement memorandum, but we solved that by keeping it very vague and open. In any event, just because I like a particular strategy doesn’t mean Bess, my other portfolio manager, is going to adopt the same one.

This strategy part has been the most difficult, actually. But, after long consideration, I have elected to adopt a long-short equity strategy. Over and above that, I have elected to avoid particular holding periods, particular concentration (or diversity) requirements and particular sector, market capitalization or other restrictions on potential investments. I really don’t want any restrictions that will prevent me from capitalizing on a good opportunity.

After having some strategy discussions, I have elected to put $1.25 million of the original seed money into Bess Levin’s portfolio. She has a deeper insight into the media and entertainment worlds than I do. Going along with Jim Cramer’s “Invest in what you know,” advice, that will be her focus.

And so, things begin. This week will mark MuffCap’s initial entry. Stay tuned!