Opinion
Collins: Citadel's pod shop model is risk management, not actual investing
“No one has done it better than Ken Griffin. But one of the things that really struck me was that it's not investing. There's actually no part of investing to it. It's managing a bunch of tickers within a risk framework.”
Opinion
Collins: Discretionary investors cannot beat Citadel analysts or automated quantitative machines
“Because we can't beat the machines. You cannot beat the Citadel analysts. There's 50 of them all looking at the same name and back book behind it, and it's hard to beat that.”
Prediction Not checkable as stated
Collins: US banking system won't recover until Fed cuts rates 400 bps
“Nothing's going to change until the Fed cuts rates, 400 basis points.”
Assertion Not checkable as stated
Collins: FrontPoint risk managers opposed entering the famous subprime short trade
“The extent of the risk management that occurred at Frontpoint, there were two risk managers, lovely guys, but the only thing that they really pushed back against us was on getting in the subprime trade because they said, well, you'll never get out of this thin…”
Insight
Collins: Sophisticated analytical investing does not reconcile with QE-flooded markets
“Being a sophisticated, analytical investor to markets flooded with QE doesn't quite reconcile.”
Disclosure
Collins: Seawolf Historically Shorted Banks for 15 to 20 Years
“And as long as I've been an investor and doing banks, I've hated banks, and there's been a lot of bad management teams, and so we historically, for 1520 years, had been short banks along other parts of financial services.”
Disclosure
Collins: Seawolf shorted First Republic, SVB, Signature, and Silvergate to zero
“We saw pretty clearly what was happening at First Republic and Silicon Valley and Signature and Silvergate, and we were short all those essentially to zero.”
Opinion
Collins: Ares Management is a vastly superior underwriter compared to commercial banks
“Aries just simply, they're way better underwriters than any bank out there, and they have much more flexibility, they have everything you want, and the banks are just in cement shoes.”
Opinion
Collins: Passive investing in fixed income is one of the stupidest ideas
“Fixed income is a little bit different, and I think I've said this many times, passive is one of the stupidest ideas ever in fixed income.”
Assertion Not checkable as stated
Collins: FrontPoint anticipated the subprime credit crisis years early
“Everyone likes to talk about the big short trade. We knew this was happening. We'd talked about this for two, three years of waiting for this credit cycle to happen. It was not a surprise to us, and we were really ready for it.”
Assertion Not checkable as stated
Collins: Few Hedge Funds Have Made Money on Shorts Over Past 15 Years
“Part of the problem with hedge fund business as of the last 1015 years has been the short side because not many people have made money on the shorts.”
Disclosure
Collins: Seawolf holds long gold as short against US balance sheet
“One of the things that looks like a short, but isn't is our long gold position.”
Disclosure
Collins: Seawolf bought Petrobras at 2x earnings for a 30% dividend yield
“We've been big holders of Petrobras recently, and that's one of our better stocks is that it was selling it again, one to two times earnings and giving yourself a 20 to 35% dividend yield.”
Disclosure
Collins: Seawolf gained over 150% in 2022 despite a 30% drawdown
“Last year, we obviously were pretty decently plus 150% or a little higher than that, but we had a 30% drawdown at one point in the year.”
Assertion Not checkable as stated
Collins: Steve Eisman uniquely called out crooked CEOs when others stayed silent
“One of the things that Steve did, and there's really not many other people that do this, is call out CEOs. And he did it one after the other, and he was not afraid to do it.”
Disclosure
Collins: FrontPoint returned 200% on the subprime short without heavy leverage
“Even on one of the things that we got wrong about the subprime trade is that we didn't put a lot of leverage on it. And that's why we made, what, 200%.”
Disclosure
Collins: Seawolf fell apart after down 8% year and losing anchor investor in 2016
“It was our worst year we'd ever had, and we were down eight percent, and we had a very small, tight investor base, and the biggest one pulled, and then everyone got nervous, and then Danny decided to retire, and the whole thing fell flat.”
Disclosure
Collins: Seawolf Capital's current portfolio trades at an average P/E of three
“I think now our average P.E. Is three.”
Assertion Not checkable as stated
Collins: Steve Eisman required five weeks of reading before hiring him
“And he said, before you even start working for me, you have to spend five weeks reading, knowing about who I am, what I like, and the books I like.”
