Marc Cohodes didn't come to Dallas to mince words.
In short order, the legendary 58-year-old short seller who's been vilified as the "scourge of Wall Street" attacked three companies and placed one on a pedestal Tuesday at the 12th annual GIBI Investment Symposium.
Far from seeing himself as corporate pariah, the former managing partner of the Copper River Management hedge fund believes he's holding back barbarians at the gate.
"I don't even know what scourge means," Cohodes said before his talk. "I'm a truth-to-power person. I can't stand it when companies rip off people, rip off governments or do bad things."
Cohodes was among a slate of 11 celebrity investors who came to the Winspear Opera House to raise $1 million in an afternoon for the Michael J. Fox Foundation for Parkinson's Research and the Vickery Meadow Youth Development Foundation in Dallas.
Wearing a pink sports jacket, jeans, designer glasses and white leather clogs, Cohodes exuded California laid-back.
He's anything but.
He's intent on hammering Badger Daylighting, a publicly traded Canadian environmental services company that he claims illegally dumps toxic waste in California, North Dakota, Wyoming and, yes, Texas.
Badger, which has a hydrovac company in Dallas, has called Cohodes' claims libelous and sought unsuccessfully in August to use Canadian courts to silence him.
"Truth is the ultimate defense," Cohodes said. "I live in Sonoma County, California, and I take the environment seriously. So when people dump toxic products in the waterways and people's fields, that's a big deal."
Also on Cohodes' attack list: the Atlanta biomedical company MiMedx Group Inc., which announced in July that its founder and CEO, Parker "Pete" Petit - whom Cohodes calls "Petite Parker the Barker" - had resigned amid a Securities and Exchange Commission investigation into the company's accounting practices.
"I think he wears a wig," Cohodes said of Petit. "In my lifetime, I've encountered 15 CEOs who wore wigs. I've shorted them 14 times with great success."
Then there's Stamps.com, which provides internet-based mailing and shipping services.
"The funny thing about them is the post office is losing a billion-plus dollars a year, and Stamps.com has higher margins than Google," Cohodes said. "If President Trump wants to help out the Postal Service, he should look very deeply at the business practices of Stamps.com."
If you want to deploy your investment dollars toward something worthy, Cohodes suggests Intec Pharma Ltd., headquartered in Israel and traded on the Nasdaq.
"They're coming out with the Accordion Pill that cuts back the number of pills that Parkinson's patients take from up to 30 down to 2. I think a lot of other drugs could be dispensed this way, especially extended-release drugs."
For the risk-averse
Jim Grant, founder and publisher of Grant's Interest Rate Observer, suggested that retirees wanting more income on savings without taking on too much risk should look at a half-dozen New York Stock Exchange-traded closed-end bond funds that hold municipal bond securities.
"They're yielding between 4.5 and 5 percent, tax exempt and they're trading at a 15 percent discount to net asset value, meaning that these securities are on sale," he said. "These are the steepest discounts since the great financial crisis."
Municipal bonds have fallen from favor with companies and banks because of changes in the corporate tax rate that make them less advantageous, he said.
"These bonds may never mature, at least not in the portfolios of the funds that currently hold them, so you could suffer a capital loss. You can't just wait to get back 100 cents on the dollar as you can with an ordinary bond," he said. "But if you need income, and many people do, one way to obtain it is to look at these now-unwanted securities."
When it comes to predicting rates: "At 72, I don't dogmatize," Grant told me.
He gave one of my favorite suggestions: shorting Matthews International, a "senior citizen" giant in the casket business that's been around since 1850.
He thinks the company's accounting is suspicious - as, apparently, do the regulators. Cremation is on the rise. And Costco sells caskets at half the price.
Reading the tea leaves
Steve Smith, president and CEO of Smith Capital Markets LLC in Dallas, was pressed by the moderator to forecast where interest rates will be a year from now.
"Twelve months is a long time, and the world is a really dangerous place. A lot of things could go wrong," he said. "I have a hard time seeing the U.S. economy, which is very strong, continuing its growth rate in a world where there are a lot of issues.
"You want a prediction? The fed funds rate will peak at 3 percent, maybe. The 10-year (Treasury) will peak at 3.5 percent. And then we'll go through another easing cycle. I don't think we're going to a 6 or 7 percent yield. But I can tell you this. If we do, you're probably not going to want to own common stocks."
Playing the long game
Ray Nixon Jr., executive director and portfolio manager of Barrow, Hanley, Mewhinney & Strauss, gave his case for long-term investing.
"Nervous energy is one of the destroyers of wealth," he said. "I tell my people, 'You don't have to make a trade today to prove you came to work.' "
He showed a photo of Orville Rogers, who is about to turn 101 and is famous at the Cooper Clinic for his centenarian athleticism. The former pilot retired at 60, having had cumulative lifetime income of $1.5 million. Yet, he and his wife had given away more than $35 million as of two years ago.
"When I asked how he's done it, he said: 'You make savings automatic. You make compounding work. And you invest for the long haul.' "
He pointed out that of the Forbes 400 richest Americans named in 1982, only 24 were still on the list 20 years later.
"One of the top reasons that they dropped off the list was leverage got them into trouble," Nixon said. "If you haven't heard (Warren Buffett partner) Charlie Munger's saying before, 'There's only three ways to go bankrupt: ladies, liquor and leverage.' "
As for his long-term stock pick, Nixon recommended General Electric, admitting that it was a "highly controversial" choice, given the company's mounting woes.
But Nixon is banking on a 126-year-old brand because it has a spinoff plan, leading-edge technology and a new CEO, Larry Culp, who turned things around at Danaher Corp.
"It's not going broke like everybody thinks it is," Nixon said. "This is going to be a home run. Over the next 10 years, you're going to make a lot of money."
Go electric, but not Tesla
Lisa Hess, president and managing partner of SkyTop Capital Management LLC in Rutherford, N.J., is big on electric vehicles - not on Teslas but on the things that make them possible.
"Soon we will no longer be driving cars that have 12,000 moving parts, but we'll be driving cars that have 12. And imagine," she said. "We'll no longer be belching hydrocarbons into the air."
Two years ago, she recommended Constellium, a global maker of lightweight aluminum hoods, doors and other car parts. It's up 55 percent since then and still has growth potential, she said.
She also likes Aumann, a German company that makes coil-winding machines for electric motors, and the distressed debt of Toronto-based Sherritt International, which mines cobalt and nickel used in batteries.
"The real story here is that there are so many ways to invest in the supply chain for electric vehicles," Hess said. "This is a real revolution."
What about Tesla?
"There are so many great opportunities for investing in electric vehicles," she said. "Tesla is a religion, not a stock."
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