jeudi 14 juillet 2016

Valeant dumped by Sequoia Fund

Two days ago, Sequoia Fund released a letter stating that:

1- They dumped entirely their position in Valeant, Idexx Laboratories, Allergan and Cabela's;
2- They trimmed their positions in TJX, Fastenal and O'Reilly;
3- They initiated a position in Carmax, Chipotle Mexican Grill, Charles Schwab and Wells Fargo.

First, I didn't know that they had a position in Allergan. Second, I never understood why they invested in Cabela's in the first place (that business has always been so-so). Third, while Carmax and Wells Fargo are surely good business, I don't think that CMG and Charles Schwab are the best ideas they could have find.

I still admire Sequoia. They made so many great investments in the past that it's hard not to consider how they manage their fund. But they made one of the worst mistakes in the recent history of investing by putting a huge amount of money in Valeant. And now, they sell it all, making us understand that they didn't know what they were doing with about 25% of their portfolio. That's fucking scary. And it's a scar that Sequoia will keep for a long long time. They deserve it.

At the same time, we learn that Michael Pearson, the mastermind behind that fucking Valeant scam has made about 100 millions $ (US) by selling shares in the last weeks. Fuck him.

And Andrew Left, Citron's leader, told once again some bad comments about Valeant too. So, VRX shares were down a lot yesterday. Now, it really looks like VRX is heading pretty pretty low.

The people that knew the business more than anybody else don't want to be associated with it anymore.

VRX is truly toxic now.

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