James Dinan Quotes
107 James Dinan Quotes (York Capital Management, Jamie Dinan, James Gerard Dinan)
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[In February 2012.] There is no such thing as having diversified, non-correlated portfolio’s.
James Dinan
[In February 2012 on liquidity and it being worth a premium especially when investors suddenly want to redeem their money like in December 2008.] The worst most scary thing in the world as an investor is when you realize I can’t get out. I can’t get out. And then you’re stuck. That is a very sobering position to be in.
James Dinan
[In December 1999.] The most important thing one can do, in my opinion, is understand what you are long. Understanding that you are not long a stock, you are long a business.
James Dinan
[In December 1999.] It has to meet the test every day: ‘If we didn't own it, would we buy it today?’ And if the answer is no, we say maybe we should get out.
James Dinan
[In February 2012.] The ability to really analyze information, synthesize all the facts you can find and really develop logical conclusions as to what this means, is still I think the hallmark for successful investing regardless of the asset class.
James Dinan
[In February 2012 on his view on margin loans.] By not having leverage you’ll always be in charge of your own destiny.
James Dinan
[In February 2012.] Liquidity is really worth the premium that I think investors attach to it.
James Dinan
Winners take care of themselves, make sure losers don't kill you.
James Dinan
Whatever you do, make sure you're around tomorrow.
James Dinan
So many people lose money by giving a trading limit - if you want to get out, get out!
James Dinan
[In December 1999.] I founded York Capital in 1991 with $5 million in equity capital. Today we have approximately $580 million under management. From inception we've followed the same investment strategy, which is an opportunistic approach toward the three main sectors of eventdriven investing. One is merger arbitrage. The second is distressed-securities investment. And the third, for lack of a better term, is special-situation equity investing. They are primarily value- and event-oriented, as opposed to just value-oriented.
James Dinan
[In December 1999.] You are looking for situations where the status quo is not going to stay in place and you can profit from the extraordinary change that is embedded in a particular security. Things like spinoffs would be a major special - situation play, as would proxy fights and other efforts to maximize shareholder value.
James Dinan
[In December 1999.] In recessionary times in the early 'Nineties, we did primarily bankruptcy investing. The firm was probably two-thirds invested in bankruptcies at that point and only about a third in equities. Over the last few years the firm has been focused primarily on merger arbitrage, for two reasons: One, the arbitrage business is booming; merger activity is at record high levels. No. 2, the returns are very, very good, particularly this year after the demise of Long Term Capital Management, about as attractive as they have been, in my opinion, since 1988.
James Dinan
[In December 1999.] In risk arbitrage… we believe it offers a way to make money taking less market risk. Usually you are going long one security, short another. It's a good business, particularly if you think, as we think, that the U.S. equity markets are certainly rich in price.
James Dinan
[In December 1999.] The U.S. equity markets are certainly rich in price. I've given up saying they are overpriced, because I've been wrong for so long.
James Dinan
[In December 1999.] Stocks certainly are not cheap.
James Dinan
[In December 1999.] We have not been that active in distressed securities for quite some time, although we try to always have a little bit of our capital in it. We stay on top of it, keep the skills sharp, the contacts fresh. The special - situation category is actually my favorite. It offers the best risk-adjusted returns. Unfortunately, you also have more market exposure when you do it.
James Dinan
[In December 1999.] The beauty of short-term, event-driven investing, arbitrage investing, even distressed investing, is that the life cycle of the investment horizon is normally three to nine or 12 months. You can pretty much afford to take a snapshot approach as to what the company is worth.
James Dinan
[In December 1999.] One of my favorite areas of risk arbitrage is hostile takeovers. Believe it or not, the main component of trading hostile takeovers is usually legalistic. How vulnerable is the target? Can you go after it, can you go around it? We've done a tremendous amount of analysis in hostile takeovers since the 'Eighties. We've become extraordinarily well-informed nonlawyers. In many ways, I think, with all due respect to members of the bar, my knowledge of takeover law was often superior to almost any lawyer in the country. With bankruptcies it was very much the same way, very legalistic.
James Dinan
[In December 1999.] One of the things I think has really made us good is that we have not just done very well picking stocks, but we've done a great job of avoiding losers.
James Dinan
[In December 1999.] I think we do a great job at cutting losses. If something goes against us when the market is not going down, we basically assume something is wrong and we made a mistake. Once it reaches a certain threshold, usually 10% or 20% below our cost, we just cut the loss.
James Dinan
[In December 1999.] When we consider a trade, we ask ourselves, ‘How much do we want to risk in this thing? How comfortable are we with it?’ We normally would start to have anywhere between 1% and maybe 3% in the portfolio. In a nice friendly stock-for-stock merger with no thorny issues we can put 5%-10% of our capital in, but you'll be making a lesser return. In a more dicey corporate spinoff, you really can't hedge out anything; that's going to be a much smaller position. Once a position goes on the sheet, it has to earn the right to stay on the sheet almost on a daily basis. In other words, it has to meet the test every day: ‘If we didn't own it, would we buy it today?’ And if the answer is no, we say maybe we should get out.
James Dinan
[In December 1999 on how many positions he normally carries at once.] It's 30-40 positions at any given time. And those positions generally range from as small as maybe a half- percent to as large as 10% of our capital base. We go both long and short. The larger positions tend to be primarily the merger-arbitrage spreads. The smaller positions are mostly distressed because of the lack of liquidity. This year, we had only an average net long exposure of about 40%. At any given point in time, 1520 positions probably comprise 80% of the firm's portfolio.
James Dinan
[In December 1999.] We are not big leverage users. Our target for leverage is somewhere between 15% and 30%. We've probably averaged about 20% leverage in the course of the firm's history. We have gotten as much, as 40%-45% leveraged maybe a handful of times.
James Dinan
[In December 1999.] We think Leonard Green is probably the best investor out there, from the standpoint of troubled retail companies.
James Dinan
[In December 1999.] We like the risk-reward. If Qwest does nothing, we still make over a 20% return by being long US West. If Qwest goes down almost 20% we still make the 20, return. Qwest has to go down almost 30% before we begin to lose money on the trade.
James Dinan
[In September 2006.] I’d like to see this firm live on after me.
James Dinan
[In September 2006 on the Dow Jones tumbling 432 points in 15 days on concern rising interest rates will throttle the U.S. economy.] I’m having a terrible week. That’s why they pay me a lot of money.
James Dinan
[In September 2006 on Sears stock and doubled his money in six months.] We found we were buying a $30 billion-a-year retailer for zero.
James Dinan
[In September 2006 on being teased as kid due to hearing loss caused from being given the antibiotic streptomycin for a fever as an infant.] It sucked a lot growing up.
James Dinan
[In September 2006 on Black Monday the 19th of October 1987 when the Dow plunged 508 points or 22.6% when he had his entire savings in the market thereby losing about $600,000 as well as him having also been reassuring his mother that her own investments were safe.] I remember crying the night the market crashed.
James Dinan
[In September 2006 looking back on him having money invested in share and bonds of Adelphia Communications Inc, WorldCom Inc and Tyco – three companies that would later be rocked by accounting fraud.] You had this cascade of corporate fraud. We were in things where you couldn’t believe the numbers.
James Dinan
[In September 2006 on looking back in 2002 on clients pulling money out of York Capital as the value of his investments sank and then the redemptions forcing him to sell into a falling market thereby exacerbating his losses and creating a vicious circle of losses.] What was cheap became cheaper and cheaper.
James Dinan
[In September 2006.] Dan [Schwartz] just said, ‘I’m stone cold. Everything I buy I’m losing money on.’
James Dinan
[In September 2006 on his 33.3% return in 2003.] The money began to rush in.
James Dinan
[In September 2006 on him sending in 2004 each of his 19 original investors a letter thanking them for their years of support, along with a small, Steuben glass apple. Which he’d gotten at a discount from the Museum of the City of New York store which was selling the apples in connection with a Steuben exhibit.] I got 20 percent off and cleaned out the inventory.
James Dinan
[In June 2008 on RCN.] Some of the large shareholders who were hedge funds got caught in the subprime market meltdown and decided to exit the stock. [He boosted his position during the selloff because] We believe in management’s ability to deliver long-term value.
James Dinan
[In April 2009.] When I started, most of my friends thought I was nuts. If you graduated from Harvard Business School as I did, you worked as a banker, not as a low-class trader. I figured that if things went well I might one day net some $200,000 annually from my management and performance fees. I never dreamed this.
James Dinan
[In April 2009.] You know the children’s books ‘A Series of Unfortunate Events.’? Horrible, horrible things happen in those books. That’s how I feel about last fall.
James Dinan
[In May 2010.] People adapt, markets adapt and animal spirits prevail.
James Dinan
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