Winner: Donald Trump
Love him or hate him (most people fall within those two categories), billionaire businessman Donald Trump is the most consequential candidate in the 2016 presidential race. He has defied the conventional wisdom about running a campaign (has barely spent a dime and never misses a chance to insult his opponents) and underscored key issues important to the GOP base, like immigration control, that have been largely ignored by the establishment. Trump may yet flame out, but even his allegedly most noxious comments, while reviled by the media and the left of this country, contain enough kernels of truth (and lack of political correctness) on important issues that he has continued to poll at the top of the GOP field. Not bad for a guy who just 20 years ago was broke and considered a tabloid punch line for his high profile divorce and underwater real estate business.
Winner: Steve Cohen
It wasn’t so long ago that hedge fund impresario Steve Cohen was the prime target in the government’s crackdown on insider trading, facing both a lifetime ban from the investing business and possibly some jail time. What a difference a year makes. The criminal case against Cohen —who created maybe the most profitable hedge fund ever in SAC Capital — never materialized, and now because of an appellate court decision that reversed several insider trading convictions (and setting new more stringent guidelines for prosecuting insider trading), Cohen may soon find himself back in the securities business, managing not just his own fortune (estimated at $12 billion), but once again money from outside investors.
Winner: Adena Friedman
Recently named COO of the Nasdaq, Friedman is in line to be the company’s next CEO when Bob Greifeld retires, as expected, in 2017. The move would be historic: Friedman would be both the first woman to run a major stock exchange, and also the first woman to become CEO of a major Wall Street firm. The job is Friedman’s to lose, Nasdaq sources say, which means she likely won’t get the job if she appears on my loser’s list for 2016.
Winner: Evan Greenberg
Unlike his father, former AIG Chairman and CEO Hank Greenberg, Evan Greenberg doesn’t attract much press attention, but that doesn’t mean he hasn’t made an impact in the insurance business, particularly in 2015. Evan runs Insurer ACE Ltd, and after its $28.3 billion acquisition of Chubb Corp. in the summer, he now runs one of the world’s biggest property and casualty insurance companies. Hank left AIG in 2005 under pressure from then New York Attorney General Eliot Spitzer on civil charges he continues to fight. Under Evan, ACE had its own Spitzer issues, agreeing to pay a small fine to settle civil charges in 2006. But now nearly 10 years later, Evan still runs the company and sources say he is poised to make it even bigger. Rumor has it that Evan will snap up his dad’s new insurance outfit, Starr Companies, when and if his 90-year-old father ever decides to retire.
Winner: Hedgeye Risk Management
Maybe one of the most controversial research outfits on Wall Street, Hedgeye is best known for the Twitter brawls and ostentation of its outspoken founder, Keith McCullough (Disclosure: McCullough is a frequent guest on FBN). But that would be selling the company short, particularly after its initially derided, but ultimately prescient call on Kinder Morgan Inc., an energy company that benefited from both Wall Street touts and fellow lackeys in the business media. In 2013, Hedgeye’s Kevin Kaiser labeled the company a “house of cards” for offering investors a rich dividend at the expense of improving its infrastructure. He predicted the stock would crash, and this year it did. A great call made in the face of criticism from the Wall Street and financial-media establishments. Kudos.
Loser: The GOP Establishment
When was the last time a group of such credentialed politicians -- all from big important states and with great records in their many years in office -- have failed so miserably at their main task, which is to get voters to vote for them? That in a nutshell is the plight of the GOP establishment candidates running for the party’s 2016 nomination. Just look at every national poll and the names Jeb Bush, John Kasich, and Chris Christie barely register. The rising star of the bunch, Florida Senator Marco Rubio, still gets trounced when he faces either Trump or the other maverick in the race, Texas Senator Ted Cruz. After years of ignoring concerns of the GOP base on issues like immigration and trade, the establishment is losing its once formidable grip on the presidential nominating process.
Loser: Martin Shkreli
It’s hard to find something positive to say about Martin Shkreli (maybe he’s nice to his dog?), but the same guy who earned infamy by snapping up a pharma company and then jacking up the price of its life-saving drug 5,000%, was recently indicted by the feds for running an alleged Ponzi scheme while a hedge fund manager. Among his accomplishments: He’s paid $2 million for a Wu-Tang Clan album; he went on a much-publicized Twitter tirade against Democratic presidential candidate Bernie Sanders; at one point, he live-streamed his life on YouTube (playing chess, etc.), and he is worth an estimated $100 million. All that by the age of 32! Shkreli, of course, is innocent until proven guilty; he denies the government’s charges, and being a jerk isn’t a crime. And who knows, maybe he’ll beat back the feds’ charges and make it to my 2016 winners list.
Loser: New York Stock Exchange
The “Big Board” as it is known on Wall Street is hardly the only stock exchange to be hampered by faulty technology, but the one the NYSE faced in July -- which essentially meant no stocks could trade through its floor brokers for about four hours -- was particularly damaging to its reputation. Stocks that didn’t trade on the NYSE simply traded elsewhere, and without a glitch. In the old days, such an outage would mean stocks that listed on the exchange couldn’t trade, period. Now because of new regulations, they can trade in other exchanges, not to mention on so called dark pools. In other words, the Big Board was made to look pretty small.
Loser: Bill Ackman
Bill Ackman’s Pershing Square hedge fund didn’t just flame out like most hedge funds in 2015, it flamed in in monumental style. The brash hedge fund manager who has made it his life mission to take down nutritional supplement company Herbalife (he’s shorting the stock) because he says it’s a massive pyramid scheme, recently told investors Pershing Square may have its worst year ever. Not only is Herbalife still around (its stock is up 44% over the past year), Pershing Square is down nearly 20% through November. Ackman was up 40% in 2014, and was the darling of the financial media. Most notably, his profile appeared on various magazine covers that year, which is usually the sign of a market top.
Loser: David Barse
The manager of one of the market’s most prominent mutual funds, Third Avenue Management, David Barse was ousted from his post earlier this month, the highest-profile casualty of the implosion of junk bonds, which he specialized in. Making Barse's departure even more controversial: it came just a day after he and his team took the unusual step of barring investors from pulling money of out one of the company’s mutual funds—a move that sent shock waves through the junk-bond market. Barse has been with Third Avenue since 1991, when he was hired by the firm’s founder and legendary investor and stock picker, Marty Whitman. He took top job at the company in 2002 and by 2006 Third Avenue had $26 billion under management as the firm diversified into junk bonds and distressed debt, Barse’s specialty. But since the financial crisis, Third Avenue has been squeezed by less than stellar performance and investors yanking their money. Tensions grew between Barse and Whitman over their respective management styles. With the implosion of the junk market, David Barse lost his job. He hasn’t been heard from publicly since.
Take a look at the stock market (the S&P 500 barely budged) and you would think 2015 was a boring year. It wasn’t. A businessman/reality show star led the crowded GOP 2016 presidential field; a controversial, 32-year old pharmaceutical executive bought a rare Wu-Tang Clan album and was arrested for securities fraud; and the government’s prime target in its insider trading probe made a comeback. Junk bonds imploded, as did some careers. In other words, there have been plenty of winners and losers to choose and learn from in 2015 from the world of business and politics. Here’s my list: