By: Regal Point Capital
Source: Seeking Alpha
One of the best ways to uncover investment ideas is to pay attention to the smart money—investors with proven track records and outsized returns. Even Warren Buffett, arguably the world’s most celebrated investor, welcomes ideas from other smart investors knowing that it’s impossible for one person to cover the entire universe of investment opportunities. In fact, when John Paulson made billions for himself and his partners shorting subprime mortgage bonds in what would be called “the greatest trade ever ,” it was an idea he learned about from another fellow investor.
About a month ago, Kyle Bass of Hayman Capital, announced a significant stake in General Motors claiming, “GM equity represents one of the most compelling risk/reward situations of any large cap in the world today.” Incidentally, Mr. Bass was also a beneficiary of the short subprime trade and he too learned of the idea from another investor.