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Post by mnholdem on Nov 27, 2017 11:38:12 GMT -5
David Shaw Pours More Money Into Valeant Pharmaceuticals Intl Inc (VRX), MannKind Corporation (MNKD)
One of the world's top fund managers is backing volatile healthcare stocks VRX and MNKD.
Harriet Lefton -November 27, 2017, 10:18 AM EDT
David Shaw, founder of the wildly successful D.E. Shaw hedge fund, has made some risky moves in the last quarter, according to just-released 13F forms filed with the SEC. He revealed a bullish sentiment on controversial healthcare stock Valeant Pharmaceuticals International, Inc. (NYSE:VRX) and MannKind Corporation (NASDAQ:MNKD).
For Q3, Shaw also increased the fund’s holding in volatile biopharma MannKind. The massive 3050% rise translates into 1,188,996 additional shares for the fund worth $2,665,000.
Source: www.smarteranalyst.com/2017/11/27/quant-king-david-shaw-pours-money-biotech-valeant-pharmaceuticals-intl-inc-vrx-mannkind-corporation-mnkd/
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Post by bill on Nov 27, 2017 12:01:54 GMT -5
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Post by centralcoastinvestor on Nov 27, 2017 13:03:19 GMT -5
David Shaw Pours More Money Into Valeant Pharmaceuticals Intl Inc (VRX), MannKind Corporation (MNKD)
One of the world's top fund managers is backing volatile healthcare stocks VRX and MNKD.
Harriet Lefton -November 27, 2017, 10:18 AM EDT
David Shaw, founder of the wildly successful D.E. Shaw hedge fund, has made some risky moves in the last quarter, according to just-released 13F forms filed with the SEC. He revealed a bullish sentiment on controversial healthcare stock Valeant Pharmaceuticals International, Inc. (NYSE:VRX) and MannKind Corporation (NASDAQ:MNKD).
For Q3, Shaw also increased the fund’s holding in volatile biopharma MannKind. The massive 3050% rise translates into 1,188,996 additional shares for the fund worth $2,665,000.
Source: www.smarteranalyst.com/2017/11/27/quant-king-david-shaw-pours-money-biotech-valeant-pharmaceuticals-intl-inc-vrx-mannkind-corporation-mnkd/
It's very encouraging to see smart money flowing into Mnkd. IMHO, it's just a matter of time now before we see more institutional buying. |
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Post by sportsrancho on Nov 27, 2017 13:17:18 GMT -5
David Shaw Pours More Money Into Valeant Pharmaceuticals Intl Inc (VRX), MannKind Corporation (MNKD)
One of the world's top fund managers is backing volatile healthcare stocks VRX and MNKD.
Harriet Lefton -November 27, 2017, 10:18 AM EDT
David Shaw, founder of the wildly successful D.E. Shaw hedge fund, has made some risky moves in the last quarter, according to just-released 13F forms filed with the SEC. He revealed a bullish sentiment on controversial healthcare stock Valeant Pharmaceuticals International, Inc. (NYSE:VRX) and MannKind Corporation (NASDAQ:MNKD).
For Q3, Shaw also increased the fund’s holding in volatile biopharma MannKind. The massive 3050% rise translates into 1,188,996 additional shares for the fund worth $2,665,000.
Source: www.smarteranalyst.com/2017/11/27/quant-king-david-shaw-pours-money-biotech-valeant-pharmaceuticals-intl-inc-vrx-mannkind-corporation-mnkd/
It's very encouraging to see smart money flowing into Mnkd. IMHO, it's just a matter of time now before we see more institutional buying. Exactly, and once that happens the shorts will start stampeding toward the door. |
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Post by mytakeonit on Nov 27, 2017 13:39:23 GMT -5
Then we should lock that door ... buy more shares longs !!!
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Post by sportsrancho on Nov 28, 2017 6:29:49 GMT -5
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Post by promann on Nov 28, 2017 7:52:29 GMT -5
Hey sports where can we find that he put millions down on MNKD last week? I think that's wishful thinking with no evidence. The filing reported said he purchased shares in the 3rd Q for all we know he has sold them since. |
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Post by sportsrancho on Nov 28, 2017 9:46:02 GMT -5
Hey sports where can we find that he put millions down on MNKD last week? I think that's wishful thinking with no evidence. The filing reported said he purchased shares in the 3rd Q for all we know he has sold them since. I don’t know off hand but CNA finances has got a article on it to. |
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Post by agedhippie on Nov 28, 2017 11:41:41 GMT -5
It's very encouraging to see smart money flowing into Mnkd. IMHO, it's just a matter of time now before we see more institutional buying. Exactly, and once that happens the shorts will start stampeding toward the door. There needs to be institutional investment buying for there to be a stampede. DE Shaw isn't going to do it because it's a hedge fund so nobody will see this as a vote of confidence. The problem is that with a hedge fund you only see the long side of the hedge (half the equation). Also given how long ago the filing was for I would expect the position to have been closed by now. |
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Post by esstan2001 on Nov 28, 2017 13:42:11 GMT -5
Exactly, and once that happens the shorts will start stampeding toward the door. There needs to be institutional investment buying for there to be a stampede. DE Shaw isn't going to do it because it's a hedge fund so nobody will see this as a vote of confidence. The problem is that with a hedge fund you only see the long side of the hedge (half the equation). Also given how long ago the filing was for I would expect the position to have been closed by now. Aged, how do you reconcile the 9/30/2017 filing with the following which is indicative of them holding an idea until fruition D.E. Shaw....explains its key principle thus: “Our firm has been built in part by attempting to do what other companies might consider impossible, or never imagine at all. A single transformative idea that ultimately works—for a new business, a new trading model, or an improved back office process—is worth a dozen ideas that lead nowhere.” |
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Post by mnholdem on Nov 28, 2017 15:31:53 GMT -5
Touché!
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Post by agedhippie on Nov 28, 2017 16:06:54 GMT -5
There needs to be institutional investment buying for there to be a stampede. DE Shaw isn't going to do it because it's a hedge fund so nobody will see this as a vote of confidence. The problem is that with a hedge fund you only see the long side of the hedge (half the equation). Also given how long ago the filing was for I would expect the position to have been closed by now. Aged, how do you reconcile the 9/30/2017 filing with the following which is indicative of them holding an idea until fruition D.E. Shaw....explains its key principle thus: “Our firm has been built in part by attempting to do what other companies might consider impossible, or never imagine at all. A single transformative idea that ultimately works—for a new business, a new trading model, or an improved back office process—is worth a dozen ideas that lead nowhere.” I worked for one of their competitors and there were a lot of ex-DE Shaw people there - it's a small community  DE Shaw is a quant firm (the original actually). They make their money by building complex models that capture alpha in the market. These models involve a lot of different stocks going long and short to achieve a particular result. I have no idea what they are trying to achieve but here is a made up example: Assume they think that a scare in a particular drug is going to push people away for a period - SGLT2 and amputations for example. You can either short pharmas with SGLT2 exposure, or you can pare away the SGLT2 element away from the pharmas other products by hedging out the products (short the SGLT2 pharmas, go long the other components they make). What happens is that you are now short SGLT2 only (you are both short and long everything else so it cancels out) hugely multiplying your gain as you now capture only the SGLT2 move. Mannkind is a good proxy for the insulin component in this hedge since that is all Mannkind make, so they will go long Mannkind as part of the bigger hedge. That's a fairly random example and nobody except DE Shaw knows what the real model was and why they bought Mannkind as part of it, but that's how it works. DE Shaw would likely be using something hugely more complicated and their computers would do all the work modeling and trading. |
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Post by esstan2001 on Nov 28, 2017 16:45:37 GMT -5
Aged, how do you reconcile the 9/30/2017 filing with the following which is indicative of them holding an idea until fruition D.E. Shaw....explains its key principle thus: “Our firm has been built in part by attempting to do what other companies might consider impossible, or never imagine at all. A single transformative idea that ultimately works—for a new business, a new trading model, or an improved back office process—is worth a dozen ideas that lead nowhere.” I worked for one of their competitors and there were a lot of ex-DE Shaw people there - it's a small community DE Shaw is a quant firm (the original actually). They make their money by building complex models that capture alpha in the market. These models involve a lot of different stocks going long and short to achieve a particular result. I have no idea what they are trying to achieve but here is a made up example: Assume they think that a scare in a particular drug is going to push people away for a period - SGLT2 and amputations for example. You can either short pharmas with SGLT2 exposure, or you can pare away the SGLT2 element away from the pharmas other products by hedging out the products (short the SGLT2 pharmas, go long the other components they make). What happens is that you are now short SGLT2 only (you are both short and long everything else so it cancels out) hugely multiplying your gain as you now capture only the SGLT2 move. Mannkind is a good proxy for the insulin component in this hedge since that is all Mannkind make, so they will go long Mannkind as part of the bigger hedge. That's a fairly random example and nobody except DE Shaw knows what the real model was and why they bought Mannkind as part of it, but that's how it works. DE Shaw would likely be using something hugely more complicated and their computers would do all the work modeling and trading. Not so sure today's AI and neural nets are up to the task of doing all the work modeling and trading... They require immense training data and are good at a specific task. Models (except runaway) are still only as good as the underlying assumptions and the data programmed into them- there have to be a lot of variables that they are factoring in, tight monitoring...and I don't think they generate the model on a whim in a reactionary manner- they have to be thinking about a certain trend or scenario for a while, model it, tweak the model, watch it, & then once there is some confidence in the model, the data and the assumptions, let it run and potentially recommend / execute the trades... My point is why couldn't it now finally be the case that all indicators at this point look to a long position considering that this insulin's glucose control characteristics appear revolutionary, adverse event risks appear low, and now it is a matter of a new drug transforming to a nascent / early cycle product with insurance coverage coming on stream, and for that behavior, I can see them having some mature drug ramp / adoption models to depend on... As you also point out, this can be part of a larger hedging strategy, and hedging activity can tend to involve a long term plan. |
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Post by pantaloons on Nov 28, 2017 17:21:19 GMT -5
I worked for one of their competitors and there were a lot of ex-DE Shaw people there - it's a small community DE Shaw is a quant firm (the original actually). They make their money by building complex models that capture alpha in the market. These models involve a lot of different stocks going long and short to achieve a particular result. I have no idea what they are trying to achieve but here is a made up example: Assume they think that a scare in a particular drug is going to push people away for a period - SGLT2 and amputations for example. You can either short pharmas with SGLT2 exposure, or you can pare away the SGLT2 element away from the pharmas other products by hedging out the products (short the SGLT2 pharmas, go long the other components they make). What happens is that you are now short SGLT2 only (you are both short and long everything else so it cancels out) hugely multiplying your gain as you now capture only the SGLT2 move. Mannkind is a good proxy for the insulin component in this hedge since that is all Mannkind make, so they will go long Mannkind as part of the bigger hedge. That's a fairly random example and nobody except DE Shaw knows what the real model was and why they bought Mannkind as part of it, but that's how it works. DE Shaw would likely be using something hugely more complicated and their computers would do all the work modeling and trading. Not so sure today's AI and neural nets are up to the task of doing all the work modeling and trading... They require immense training data and are good at a specific task. Models (except runaway) are still only as good as the underlying assumptions and the data programmed into them- there have to be a lot of variables that they are factoring in, tight monitoring...and I don't think they generate the model on a whim in a reactionary manner- they have to be thinking about a certain trend or scenario for a while, model it, tweak the model, watch it, & then once there is some confidence in the model, the data and the assumptions, let it run and potentially recommend / execute the trades... My point is why couldn't it now finally be the case that all indicators at this point look to a long position considering that this insulin's glucose control characteristics appear revolutionary, adverse event risks appear low, and now it is a matter of a new drug transforming to a nascent / early cycle product with insurance coverage coming on stream, and for that behavior, I can see them having some mature drug ramp / adoption models to depend on... As you also point out, this can be part of a larger hedging strategy, and hedging activity can tend to involve a long term plan. Interesting insight. I wonder if a volatile company with a number of upcoming binary events would be a good fit for these aforementioned models by D Shaw and the like? |
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Post by agedhippie on Nov 28, 2017 23:47:05 GMT -5
I worked for one of their competitors and there were a lot of ex-DE Shaw people there - it's a small community DE Shaw is a quant firm (the original actually). They make their money by building complex models that capture alpha in the market. These models involve a lot of different stocks going long and short to achieve a particular result. I have no idea what they are trying to achieve but here is a made up example: Assume they think that a scare in a particular drug is going to push people away for a period - SGLT2 and amputations for example. You can either short pharmas with SGLT2 exposure, or you can pare away the SGLT2 element away from the pharmas other products by hedging out the products (short the SGLT2 pharmas, go long the other components they make). What happens is that you are now short SGLT2 only (you are both short and long everything else so it cancels out) hugely multiplying your gain as you now capture only the SGLT2 move. Mannkind is a good proxy for the insulin component in this hedge since that is all Mannkind make, so they will go long Mannkind as part of the bigger hedge. That's a fairly random example and nobody except DE Shaw knows what the real model was and why they bought Mannkind as part of it, but that's how it works. DE Shaw would likely be using something hugely more complicated and their computers would do all the work modeling and trading. Not so sure today's AI and neural nets are up to the task of doing all the work modeling and trading. They require immense training data and are good at a specific task. Models (except runaway) are still only as good as the underlying assumptions and the data programmed into them- there have to be a lot of variables that they are factoring in, tight monitoring...and I don't think they generate the model on a whim in a reactionary manner- they have to be thinking about a certain trend or scenario for a while, model it, tweak the model, watch it, & then once there is some confidence in the model, the data and the assumptions, let it run and potentially recommend / execute the trades... My point is why couldn't it now finally be the case that all indicators at this point look to a long position considering that this insulin's glucose control characteristics appear revolutionary, adverse event risks appear low, and now it is a matter of a new drug transforming to a nascent / early cycle product with insurance coverage coming on stream, and for that behavior, I can see them having some mature drug ramp / adoption models to depend on... As you also point out, this can be part of a larger hedging strategy, and hedging activity can tend to involve a long term plan. Neural nets and AIs are hard to use in these environments because of the training aspect and the risk of curve fitting. They may use them now but I am not sure. What they did do was use arrays to optimize the blend of stocks to get a particular model at the minimum cost. The compute then continually traded to keep the model stable. Think of it as fly-by-wire for hedge funds. And you are quite right, they don't generate model on whim because there are finite resources, but you have teams looking for the situations that will generate alpha. Your point is valid - however just because there is an opportunity it does not mean they will take. In this case they would be almost certain not to take it since the trade is not of the type they would do - the position would be a single speculative stock and long lived. That's just not their territory, they use modern portfolio theory to build optimally hedged portfolios. Then they use their computers to make sure they remain at the optimal curve for the portfolio. Either DE Shaw has ceased to be a hedge fund, or this is part of a bigger hedge. |
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