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 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