As a municipal bond professional, no on ever pissed me off more than Meredith Whitney, with her smarter than thou attitude that cost investors who listened to her many hundreds of millions, while enriching people who did not. Cost state and local issuers, too.
Her commentary on the muni market was simply filled with incompetent analysis and incomplete logic. So, while admitting I am feeling a certain amount of schadenfreude, I also am not the slightest bit surprised that the Emrpess's empire is crumbling.
She made a "good call" on banks that I am confident was fed to her by the hedgies, and this convinced her as to how great/smart she was. So, rather than relying on her gains from that enterprise, she tried to convince investors that she would find lots and lots of new "opportunities." Well apparently she didn't.
Whitney, 45, gained Wall Street renown during the financial crisis for correctly predicting Citigroup Inc.’s dividend cut. Then, on CBS Corp.’s “60 Minutes” in December 2010, she predicted hundreds of billions of dollars of municipal-bond defaults.
She later told Bloomberg News it had been “a guesstimate” involving “fifth-derivative dimensions.” Instead of collapsing, municipal bonds became a star performer. More recently, she predicted that growth in states including Arkansas and South Dakota will be twice the national average.
She also started her own advisory firm, deregistering its brokerage unit, Meredith Whitney Securities LLC, in August 2013 after three unprofitable years, industry records show. |
Now, her employees are leaving, and her investors want their money back.
Bye, Meredith, we hardly knew ye....
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She just wasn't one of them.
I tend to think he's right, but I'm unsure why he went after Herbalife and not Nu Skin, which seems to have more salient issues than Herbalife.
And it hasn't gotten any easier given the market environment (crushed by long only bull market) and the surplus of competition.
Eisman, her mentor who was short bank stocks at the time, fed her a lot of that information. Once it became apparent she had good marketing skills and was picking up momentum, more hedge funds shorting bank stocks began to feed her their research.
As a bank analyst, I can tell you even in those years, even with hedge funds feeding her ideas, her "research" was still pure crap. There was nothing analytical about it.
As Mara once said "it's great to see arrogance humbled" Cant blame her for trying to strike while the iron was hot, but IMO we should all know our strengths & weaknesses... hers is her marketing prowess, not her fundamental research or business acumen. She should have stayed with a big brokerage firm.
By and large i think the market's pretty efficient... very few people out there (includes myself) are worth what they're paid. IMO industry, at least large banks, need to cut salaries across the board -- and this coming from someone that works at a large bank. Markets businesses dont earn cost of capital, here or in Europe (5% last i checked)... why comp isnt cut 20-25% i have no idea.
I saw Eisman present at Ira Sohn last year. Everyone sounds smart in a 15 minute presentation, though. Of the people I've met, I've been most impressed by Ackman and Einhorn.
I'm sure they were equally impressed with me.