The Tech King's Defiant 'Sell'
The biggest technology-stock investor in the hedge-fund world is getting clobbered betting against tech. Either Dan Benton has lost his touch, or he's seeing something the market is missing.
Mr. Benton's $9 billion hedge-fund company, Andor Capital Management LLC, is down a hefty 11% this year while the tech-heavy Nasdaq Composite Index is up nearly 30%. "We know we screwed up the quarter," Mr. Benton told his investors on a July 14 conference call, before asking them to stick with the fund, predicting a second-half rebound.
Mr. Benton built his reputation, and his fortune, on tech stocks, the very stocks leading the nine-month-old market rally. A former Goldman Sachs personal-computer analyst, he racked up big gains with early wagers on tech, telecommunications and Internet stocks during the bull market of the 1990s when he was president, and co-founder, of giant hedge-fund Pequot Capital Management Inc.
Then, after the tech-stock bubble burst in 2000 but before most investors were aware of how deep and sustained the downturn would be, he dumped tech shares, sidestepping most of the brutal losses of the bear market. Mr. Benton started Andor after a high-profile split in 2001 with Art Samberg, Pequot's other co-founder. In the past two years, he has developed his investment vehicle into the largest U.S. hedge-fund firm that sticks to stocks, thanks to prescient bets against the market.
Like other hedge funds, which have jumped in popularity as investors claw for a way to beat the market, Andor is an investment pool for institutions and the wealthy that is able to take risks with only light regulation. For example, unlike many mutual funds, it bets against the market by "shorting" stocks.
It is those short bets, born from Mr. Benton's continued skepticism about a sustained turnaround for earnings, that now are haunting him. After slight gains in this year's first quarter, Mr. Benton's eight funds were crushed in the second quarter, according to his investors, falling 11.9% on average. Mr. Benton's short positions have been bigger than his bullish bets for much of the past year. In a short sell, an investor sells borrowed shares, aiming to profit by replacing them later with shares bought at a cheaper price.
His Andor Tech Aggressive fund tumbled almost 17% during the second quarter, while Andor Health dropped 4%. That compares with second-quarter gains of 21% for the Nasdaq index, and 12% for the Dow Jones Industrial Average.
To be sure, other hedge funds are trailing behind the market, also due to heavy short selling. Through June of this year, hedge funds overall were up 8%, according to the CSFB/Tremont Hedge Fund Index. That compares with a gain of 11% for the Dow industrials.
Still, Mr. Benton's poor recent performance, and contrarian stance, are the talk of the hedge-fund world because of his stellar track record. His average hedge fund rose 15.4% in 2002, 13.4% in 2001 and 42% in 2000 -- all after hefty management and incentive fees and during the vicious bear market for stocks. Funds managed by Mr. Benton are up 40% annually on average since 1994.
A spokeswoman for Mr. Benton wouldn't comment.
So why don't Mr. Benton and his team believe the rally is for real?
They see no evidence corporate spending is reviving, in the tech world and in the rest of the economy. Earnings have been good, but mostly due to cost cutting, they argue. Stocks such as Nokia Corp., Applied Materials Inc., Siebel Systems Inc., Lucent Technologies Inc., Motorola Inc., Texas Instruments Inc. and Oracle Corp. may have climbed, but these companies' operating results haven't impressed Mr. Benton, who sees challenges ahead. The outlook for cellphones is poor, he argues, as it is for semiconductors.
Low interest rates, a weak dollar and tax cuts have provided only a short-term fuel for the rise, Mr. Benton told investors. But the market often guesses wrong on economic turns, and it is doing it again this time, he says.
"The second quarter was a sentiment-driven market and we got caught on the wrong side," he told investors. "With the full benefit of hindsight, there's nothing we could have done to make money in the second quarter without abandoning our fundamental-driven stock-selection process."
Despite the losses so far this year, which come as Mr. Samberg's funds at Pequot are up 7%, people close to Mr. Benton say the fund manager has been surprisingly upbeat. He told one person: "It's halftime. The second half of the year has just begun."
One possible reason for such confidence: This isn't the first time Mr. Benton has lagged behind the market badly. That's because markets often move ahead of evidence on the ground, throwing off an investor like Mr. Benton who is so research-driven.
And in the past, he's quickly made up lost ground. For example, Mr. Benton held many Internet and tech stocks in the spring of 2000, sticking with them through the summer of that year even after the market cracked. His Andor Tech Perennial fund dropped a staggering 42% in a one-month period that spring. But when telecom earnings turned down, Mr. Benton quickly reconfigured his portfolio, selling short the very stocks he had been holding. The fund finished the year up 39%.
"Our process will always cause us to lag turns, but it keeps us invested during the false starts," Mr. Benton told investors.
His funds do own some tech stocks. The biggest holding: eBay Inc., up more than 60% this year, though it has slipped lately.
The danger for Mr. Benton, as with any investor, is sticking too long to a stance, missing a changing environment. While Mr. Benton's research doesn't agree, various surveys of corporate-technology spending have been positive lately. Just last week, a report by Goldman Sachs analyst Laura Conigliaro said that "2003 results show fragile improvements across most of tech's major end markets, and a sharp drop in the number of downward [capital expenditure] revisions."
Meanwhile, Mr. Benton manages so much money that it can be hard for him to change on the fly. (Andor is the second-largest hedge-fund firm overall, after Caxton Associates, according to Institutional Investor magazine; Caxton invests in everything from currencies to bonds.) And the longer his losing streak continues, the harder it is for him, because, like other hedge funds, Andor doesn't collect a so-called incentive fee until it recovers losses for investors.
His hedge funds are a bit less negative on the market than they were a few months back, but Mr. Benton isn't ready to get bullish. "You're going to take us out on our shields if the market is changed forever and fundamentals and stock prices are now disconnected," he told investors. "It has worked for us for 10 years. We're not going to change now."
科技股王牌投资者执意卖空
作为对冲基金业界科技股最大的投资者，达恩?本顿(Dan Benton)由于看跌这一类股而蒙受巨大损失。然而，他的损失是既成事实，还是仍有挽回的余地？
本顿的对冲基金公司Andor Capital Management LLC旗下管理90亿美元的资金，今年迄今为止，该基金已大幅缩水11%，然而那斯达克综合指数同期却飙升近30%。本顿在7月14日召开的电话会议上对投资者表示，该公司第二季度表现差强人意，但他同时恳请投资者继续持有该公司的基金，并预计该基金今年下半年的业绩将会有所改观。
过去9个月的时间内，科技股引领美国股市稳步上扬。本顿就是通过科技股发家及扬名的。 他曾经是高盛(Goldman Sachs)的个人电脑分析师。上世纪90年代的美国股市尽显强势，本顿当时为对冲基金巨头Pequot Capital Management Inc.的总裁兼共同创始人，他抢占市场先机，通过投资科技股、电信股及互联网类股，积累了大量的财富。
科技股泡沫于2000年破灭，在大部分投资者还无从了解该轮股市的下跌幅度及持续时间之前，本顿已开始抛售科技股，从而基本上避免了由于股市暴跌而造成的巨大损失。本顿于2001年与Pequot的另一名共同创始人阿特?桑贝里(Art Samberg)分道扬镳，此事当年备受市场关注。过去2年的时间内，由于奉行看跌股市这一投资策略，Andor已成为业内最大的专门从事股市投资的对冲基金。
与其他对冲基金类似，Andor也是因投资者寻找对抗股市下跌的金融工具而一举成名。Andor为各家机构及富人阶层提供资金管理服务，该基金面临的监管较为宽松。与共同基金不同，Andor借助卖空股票来应对大市下跌。
本顿对美国上市公司业绩的持续好转始终抱有怀疑态度，他因此采取了卖空股票的投资策略，但这一策略目前使本顿陷入了困境。本顿管理的8只基金虽然在今年第一季度实现小幅盈利，但第二季度出现大幅亏损，据相关投资者透露，这8只基金当季平均缩水11.9%。去年大部分时间内，本顿卖空的股票规模始终大于买进的股票规模。卖空股票，即指投资者卖出借入的股票，希望随后以低价买回这些股票来实现盈利。
本顿的Andor Tech Aggressive基金第二季度大幅缩水近17%，而Andor Health缩水4%。当季那斯达克综合指数飙升21%，道琼斯工业股票平均价格指数上涨12%。
毫无疑问，进行大规模的卖空交易，也是导致其他对冲基金表现弱于大市的原因。据瑞士信贷第一波士顿(CSFB)/Tremont对冲基金指数(CSFB/Tremont Hedge Fund Index)显示，今年头6个月，对冲基金业绩总体增长8%，同期道琼斯工业股票平均价格指数上涨11%。
本顿以往业绩璀璨无比，因此，他今年上半年的糟糕表现及逆大市而动的投资策略成为对冲基金业的谈资。本顿管理的对冲基金2002年度平均升值15.4%，2001年升值13.4%，2000年升值42%。这些骄人业绩都是在股市走低的情况下通过精专的管理而取得的，并且因此收取了巨额激励费。自1994年以来，本顿管理的基金平均每年增值40%。
本顿发言人没有发表评论。
本顿及其基金管理团队为何不相信股市会走高呢？
他们认为，没有迹象表明科技公司及其他公司的支出开始复苏。他们辩称，尽管公司利润出现好转，但这主要归功于成本削减。诺基亚(Nokia)、应用材料(Applied Materials Inc.)、Siebel Systems Inc.、朗讯科技(Lucent Technologies Inc.)、摩托罗拉(Motorola Inc.)、德州仪器(Texas Instruments Inc.)及甲骨文(Oracle Corp.)等公司的股价可能确实出现走高的情况，但上述公司的营运收益未能给本顿留下深刻印象。他表示，移动电话及半导体的行业前景依旧黯淡。
本顿对投资者表示，利率水平较低、美元走软以及减税方案，这些仅能为股市提供短期的上行动力。他说，市场通常对经济走势判断错误，这一次市场再次犯了相同的错误。
他对投资者称，市场人气驱动第二季度股市走势，Andor不巧站错了队。而总结经验教训，他们认为，除非第二季度放弃了一贯奉行的以基本面作为选股依据的投资方式，否则Andor当季必定蒙受损失。
尽管Andor今年迄今大幅缩水，而桑贝里管理的基金Pequot升值了7%，但熟悉本顿的人士表示，本顿对此出奇地乐观。他曾对一位朋友说，这仅仅是上半年的情况，下半年才刚刚开始。
本顿如此自信的理由可能在于，本顿管理的基金表现远落后于同行，这种情况并不是第一次发生。市场往往较经济基本面先行一步，导致本顿这类以研究结果为导向的投资者遭受损失。
以前的情况是，本顿迅速弥补了先前的损失。比如，本顿曾在2000年春季大量持有互联网及科技股票，甚至在股市暴跌后，在随后整个夏季的时间内，他还坚持持有上述股票。他旗下的Andor Tech Perennial在2000年春季一个月的时间内就大幅缩水42%。电信公司的利润出现下滑后，本顿迅速调整投资组合，卖空一度持有的股票。该基金当年年末最终升值39%。
本顿旗下基金确实持有部分科技股，持股比例最大的为eBay Inc.，该股股价尽管最近有所回落，但该股今年迄今已飙升60%以上。
对本顿及任何投资者而言，风险在于长时期奉行一种投资理念，因而不能适应迅速变化的市场环境。诸多调查报告显示，公司科技支出近来出现好转。高盛(Goldman Sachs)分析师劳拉?康尼哥利亚罗(Laura Conigliaro)上周在分析报告中指出，2003财政年度已经公布的公司业绩报告显示，科技领域主要终端市场的情况出现微弱改善，而资本支出的下降幅度大幅减小。但本顿的研究报告对此并不赞同。
然而，由于本顿管理的资金规模巨大，让他改弦更张绝非易事。（据机构投资杂志，Andor位居Caxton Associates之后，为全美第二大对冲基金；Caxton投资领域广泛，涉及外汇及债券等诸多领域。）由于Andor在弥补客户亏损以前，不能收取所谓的激励费，因此该基金蒙受损失的时间越长，本顿的处境就愈发困难。
本顿旗下对冲基金对股市的看法较数个月以前略有改观，但他并不看涨股市。
