Pay more attention to the newer guys at the Ira Sohn Conference

The Ira Sohn Conference is going on today. This is a charity event where top fund managers pitch trade ideas to attendees who spend (donate) thousands of dollars for the right to attend. Looking at the performance of last year's picks gives some clues to the incentives the presenters have. 

The big names, people like Bill Ackman, David Einhorn, Jeffrey Gundlach, Kyle Bass* and Jim Chaos, can push their largest positions or trades that have been doing well recently. They can impress investors just by the media and market reaction to their views. The common stock of Fannie Mae and Freddie Mac, two companies whose stock might go to zero without extensive lobbying efforts, shot up today after Bill Ackman talked about them. And given that these managers are already well known, the marginal value of additional positive press is relatively small.

It's the smaller investors who need to make their name. The exposure from the conference gives many of these managers more media exposure than most of them have had in the past. A big win that was widely publicized ahead of time can help their funds gain a lot of exposure and make it much easier to raise assets. We know that the best ideas of fund managers are often be good ideas - so when lesser known managers are pitching their best ideas it makes sense to take a closer look.

*Apparently his fund makes money for investors, but every time his views are expressed in the news (Japan hasn't gone bankrupt yet!) it seems like following those views would lose a lot of money so I'm genuinely curious as to how that happens.