13-F Filings: Are They Valuable to Investors?

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Aug. 15 (Bloomberg) –- Columbia University Professor of law John Coffee and Bloomberg’s Julie Hyman discuss the importance of 13-F filings, Berkshire's adding a Charter Communications stake and John Paulson taking a stake in Allergan. They speak on “Street Smart.” (Source: Bloomberg)

It is columbia law professor and julie hyman.

Julie has been following all of these filings for us.

Carl icahn out with his news yesterday.

They already made the change trade that is what is so interesting about this.

Carl icahn is used to amassing the stakes, and then trying to push for changes.

This is what he was going to do.

Given that it already announced it was doing this, spinning off its publishing from its tv business -- he said he still wants to talk to them.

They said, we are happy to talk to any of our shareholders.

It is interesting.

Make a profit from the move without actually having to push them to do anything.

It turned out well for him.

How would you characterize these 13-f's? are the instrumental enough in terms of people being able to make good decisions?

Are they of value to investors?

An army of analysts look at these.

Probably 100 more analysts were studying them.

You could find out things only from the 13-f. the williams act only requires a bidder to disclose if it goes over 5%. here a fund manager has to disclose if it has a 2% or 3% stake in the company.

A company might find out hedge fund activists are requiring 2% or 3% stakes.

From there there is a wolf pack forming and you will see an activist campaign.

That is the kind of thing you can learn from this.

The real pros know it is going to be discovered, so they will make their males -- their move [indiscernible] what is your thought on what hedge funds should be required to do in terms of their short positions or derivative place?

That is even more important under the williams act, where you have to disclose if you're starting a control fight.

Currently, you don't have to disclose swaps, other derivative positions.

Ideally, that should both be disclosed and should be disclosed earlier.

There you get a 10 day window.

10 days is a long time.

There is a strong case for earlier disclosure, but the hedge fund community wants the ability to accumulate significant positions.

We did hear from another company, berkshire hathaway.

Tell us about that.

Berkshire hathaway coming out and saying it is getting rid or at least cutting to some extent its stake in direct tv, and on the flip side, building up a stake in charter communications.

That is the new bet in a similar industry.

This investment is being led by warned buffett and ted weschler, sort of turning over the strategy here at least to some extent to new folks there.

John paulson aching a nearly $1 billion stake in allergan.

Allergan notable because bill ackman has teamed up with valiant, and also amassed a stake in allergan.

It illustrates on wall street how everyone seems to be against akerman on the herbalife question, but other investors have put money behind him when it comes to allergan.

Paulson has invested.

Have you seen any overall trends in going through these filings?

There have not been as many as you sometimes see.

It is not like years ago, when everyone was piling into gold etf, although paulson still has that position.

On apple, for example, you saw some people cutting their stakes and some people increasing their stakes.

A final question to you.

Overall, are these patterns that sometimes emerge -- and to julie's point -- maybe less so this time around -- are they valuable?

If you see that all of the activist hedge funds are piling into a stock, you know what is going to happen.

If you see that all of the other major investors are going to one industry, that is also good news for that industry.

Yesterday's filing by polson tells you something very specific.

It means that pershing square is going to be able to win the vote coming up shortly under which they need to get 25% of the stock to call a meeting and vote out the directors.

Paulson joining them, that is an important ally.

There are things to be learned here.

Thank you so much, professor.

We appreciate you being here.

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