March 24, 2009

The Long Awaited Return of Duke & Duke

Posted by JSpur at March 24, 2009 10:33 AM

Carl: Good morning and welcome to this edition of Squawk Box. I'm Carl Quintanilla and I'm joined this morning by Joe Kernen. Becky Quick has the morning off.

Joe: With us in the studio today are Mortimer and Randolph Duke, of Duke & Duke Strategies, LLC. Good morning, gentlemen.

Mortimer: Good morning.

Randolph: Morning.

Carl: Thanks for being with us. So, catch us up on what you've been up to.

Mortimer: Well, as you may remember, our portfolio was substantially wiped out by the Great Concentrated Frozen Orange Juice short squeeze on the first day of trading in 1983.

Joe: We all remember that. They had to carry you off the trading floor on a gurney, didn't they Randolph? How's your health now?

Randolph: Oh, much better, thanks. I went to Pritikin. Lost some weight. Got into yoga. That sort of thing.

Carl: And as I understand it, you guys have been back in the business for a few years?

Mortimer: That's right. We started a hedge fund in the late eighties.

Joe: How would you characterize your strategy? Is it long-short? What?

Randolph: We don't really care to discuss it. All we're prepared to say is, it is a variation on split-strike trading.

Carl: Uh-huh. How much capital do you all have under management? From what kind of investors?

Mortimer: Oh, north of $10 billion. Our investors are a very select group of high net worths and endowments. Only the best people, who are extermely high class. It's in the blood, you know, that kind of quality. Like racehorses.

Randolph: They all come from two parent households. Were read to as toddlers. Eat a balanced diet. No smokers. Environment is as important as genetics, Mortimer. Don't forget that.

Joe: How has your performance been?

Mortimer: Very steady. Our annual returns have not deviated from a 10%-12% range since inception.

Carl: Not one down year? Through all those market cycles?

Randolph: That's right.

Joe: Wow. That's incredible. Do your investors conduct a lot of due diligence before they commit their capital?

Mortimer: They're not permitted to ask any questions other than about our golf handicaps.

Joe: That's it?

Randolph: Well. We do send them quarterly statements, after all. And a Christmas card. And did we mention they are part of a very select group? We only allow people who we know and trust to invest with us. You have to be very highly recommended. We turn away many, many accounts.

Carl: I assume your books are audited by a Big Four firm.

Mortimer: Actually, no. Our books are done by a firm the lead partner in which is our housekeeper's nephew. Based in Hackensack, New Jersey. Clarence Beeks, CPA.

Joe: I hope you don't mind if I say so, but this has kind of an eerie ring to it. The Madoff situation sort of comes to mind.

Randolph: (Laughing) Oh, please. The SEC has been into see us three times.

Mortimer: They mostly wanted to know if we could get them Eddie Murphy's autograph. Strange request, but we did our best to accommodate them.

Joe: Well, I guess if what I was suggesting were really true, there's no reason to get upset. The first big wave of redemptions will bring the scam to light and then the "in-crowd" investors will start crying that they're innocent victims and it's all the government's fault and they should be bailed out like everyone else. Whereupon their Congressman will go scrambling to hold a press conference to bleat about the unfairness of it all.

Mortimer: You said it, we didn't.

Joe: But then you guys would go to jail, right?

Randolph: Not if we die first.

Carl: Good point. Well, thanks for coming in fellas. Be sure and tune in tomorrow when we will be interviewing Billy Ray Valentine and Louis Winthorp about how they are trading this market.

Tags:
Comments

sxIPmO

Posted by: Igxilwkh | July 13, 2009 12:54 PM

g0jABz

Posted by: Nfhxflva | July 13, 2009 4:01 PM
Post a comment