20 Million Nickels

Does anyone have any idea what 20 million nickels look like?

J. Kyle Bass of Hayman Capital does. The coins are wrapped and stacked on pallets at a Brink's vault, and when his bank asked him why so many damn nickels, he simply responded, "I just like nickels."

Truth be told, Kyle Bass likes making money, stupid amounts of money. Since his bet on the housing market and Europe's sovereign debt crisis paid off, Hayman Capital has claims to have a ROI of 65,000%. Now, that number may be exaggerated just a tad, but at least we know who was on the other end of MF Global's stick...

To WSO the man might be an anomaly. His hedge fund is in Dallas. He became Bear Stearns' youngest MD without an MBA, or degree from a target university, mind you. And besides a thorough understanding of the derivatives market, he interconnects it almost too brilliantly with global economics. Now isn't that a novelty.

Many have already heard of his next short on Japan. With a grossly aging population and interest payments closing in on the amount of tax collections, Japan's population-owned-debt model may cease to function. In fact, Bass is so sure that he reportedly financed his 40,000 sq ft Dallas abode in Yen in order to later pay back in dollars.

But the Japanese are certainly praying that one man cannot always be so right. Foreteller Peter Schiff has somewhat died out after his media rampage on the dollar's impending collapse. Similarly, Meredith Whitney's call on full out chaos in the municipal bond market proved false, even with the city of Harrisburg defaulting on its trash fueled debt. But let me ask you: Can golden boy Kyle Bass be right about Japan as the next big domino to fall?

Comments (16)

Nov 4, 2011 - 2:38pm
chitownanalyst, what's your opinion? Comment below:
sk8247365:
he simply answered back, "I just like nickels."

Not a good enough answer for me. Really..why $1M in nickels? There has to be a reason.

The metals in the nickels are worth more than 5¢ or something to that affect. Read it in an interview with him recently.

Nov 4, 2011 - 2:41pm
Dr Joe, what's your opinion? Comment below:
chitownanalyst:
sk8247365:
he simply answered back, "I just like nickels."

Not a good enough answer for me. Really..why $1M in nickels? There has to be a reason.

The metals in the nickels are worth more than 5¢ or something to that affect. Read it in an interview with him recently.

But melting them down would be a felony...
  • 1
Nov 4, 2011 - 3:04pm
JeffSkilling, what's your opinion? Comment below:

Kyle Bass is an absolute baller. Don't think he's made 65,000% on Europe yet, but apparently he stands to if it all goes to shit (http://www.dailymail.co.uk/news/article-2044363/Kyle-Bass-Meet-Texan-investor-millions-credit-crunch.html). He's also the main character in the intro to Michael Lewis's new book Boomerang.

He personally made $500mm on subprime: http://www.dmagazine.com/Home/2008/03/13/Cashing_in_on_Subprime.aspx

One of the best interviews ever: http://www.youtube.com/watch?v=WWgtzwqWh60

Nov 4, 2011 - 3:05pm
GoodBread, what's your opinion? Comment below:

I'm not entirely sure what to think about this guy. The nickel play is silly considering that when you factor in the costs of lobbying for the right to melt nickels, there's no value at all unless you do this in huge (read impossible) size. The fact that his background actually is equities in Dallas is pretty funny/awesome but something does seem a little off about him. From the Gumball 3000 stories to the 40,000sqft mansion in Dallas, there's something a little douchey/flashy about this guy you don't see with the really big macro players (PTJ's video was made 1986, can't blame the guy). I wouldn't be surprised he ends up being another Thiel/Falcone/Paulson.

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Nov 4, 2011 - 4:22pm
total, what's your opinion? Comment below:
GoodBread:
I'm not entirely sure what to think about this guy. The nickel play is silly considering that when you factor in the costs of lobbying for the right to melt nickels, there's no value at all unless you do this in huge (read impossible) size. The fact that his background actually is equities in Dallas is pretty funny/awesome but something does seem a little off about him. From the Gumball 3000 stories to the 40,000sqft mansion in Dallas, there's something a little douchey/flashy about this guy you don't see with the really big macro players (PTJ's video was made 1986, can't blame the guy). I wouldn't be surprised he ends up being another Thiel/Falcone/Paulson.

Maybe the government will try to buy his nickels from him >5 cents but less than what it costs them to make it.

Nov 4, 2011 - 5:18pm
GoodBread, what's your opinion? Comment below:
total:
Maybe the government will try to buy his nickels from him >5 cents but less than what it costs them to make it.

Right... I really wonder what will happen to all the die-hard gold-bugs and perma-bears out there when the "d-process" (thanks Dalio) is over. Some will be rich but a lot more will have gotten crushed due to poor timing/risk management.

Bass has balls and this whole CDS being circumvented thing wasn't an issue many could have foreseen back when sovereign debt CDS were cheap. But that's the problem, you can't build an entire career focused solely on the big moves, because you're bound to catch one the wrong way eventually. For all I know, this guy may be incredible at running a position. But the vibe I get is that he's an analyst who's made two great calls and had the rocks to go all in.

Nov 4, 2011 - 4:25pm
UFOinsider, what's your opinion? Comment below:
GoodBread:
I'm not entirely sure what to think about this guy. The nickel play is silly considering that when you factor in the costs of lobbying for the right to melt nickels, there's no value at all unless you do this in huge (read impossible) size. The fact that his background actually is equities in Dallas is pretty funny/awesome but something does seem a little off about him. From the Gumball 3000 stories to the 40,000sqft mansion in Dallas, there's something a little douchey/flashy about this guy you don't see with the really big macro players (PTJ's video was made 1986, can't blame the guy). I wouldn't be surprised he ends up being another Thiel/Falcone/Paulson.
Culture difference between NYC and Texas?
Get busy living
  • 2
Best Response
Nov 4, 2011 - 4:39pm
M Friedman, what's your opinion? Comment below:

Alright sorry, i've been holding out.... as mentioned, Bass pretty much is betting on the collapse of the developed worlds balance sheet (massive transfer of private debt to public debt). The nickels play is because he believes the metal worth in the nickel is 6.4 cents. Put the prior two points together and i think he plans to profit off nickels if there is an all out armageddon-esq fall out of the US/ developed world.

Keep in mind, Michael Lewis reported that this guy has an arsenal of sniper rifles and more or less has fortified his mansion in dallas (own water supply etc). But maybe thats the standard of texans, idk?

Nov 4, 2011 - 4:44pm
UFOinsider, what's your opinion? Comment below:
mfriedman:
Bass pretty much is betting on the collapse of the developed worlds balance sheet [...] and i think he plans to profit off nickels if there is an all out armageddon-esq fall out of the US/ developed world.

...this guy has an arsenal of sniper rifles and more or less has fortified his mansion in dallas (own water supply etc). But maybe thats the standard of texans, idk?

That sounds about right.
Get busy living
  • 1
Nov 4, 2011 - 5:10pm
slickrick773, what's your opinion? Comment below:

Gentlemen, wake up! The dollar and US is on its way out. When the dollar dies and the world is in complete chaos this guy will melt down the nickles and trade.

Nov 4, 2011 - 8:30pm
GoodBread, what's your opinion? Comment below:

Non velit et quia quisquam. Eveniet tempora ex qui perferendis qui adipisci perferendis nam. Et explicabo ab repellendus vel.

Esse eum veritatis at laboriosam nisi molestias aspernatur. Ea perspiciatis culpa eum vel. Quia sequi dolor dolorum et veniam voluptatem itaque soluta. Dicta delectus mollitia reprehenderit id ut expedita maxime.

Tenetur qui est harum odio. Itaque pariatur nam sit quia. Commodi quis est suscipit dolorem.

Start Discussion

Career Advancement Opportunities

August 2022 Investment Banking

  • Jefferies & Company (▲04) 99.6%
  • Lincoln International (= =) 99.2%
  • Bank of America Merrill Lynch (▲03) 98.8%
  • RBC Capital Markets (▲08) 98.4%
  • Houlihan Lokey (▲05) 98.0%

Overall Employee Satisfaction

August 2022 Investment Banking

  • Lincoln International (▲06) 99.6%
  • Jefferies & Company (▲11) 99.2%
  • Greenhill (▲07) 98.8%
  • PJT Partners (▽02) 98.4%
  • Macquarie Group Limited ABN (▲22) 98.0%

Professional Growth Opportunities

August 2022 Investment Banking

  • Lincoln International (▲04) 99.6%
  • Jefferies & Company (▲05) 99.2%
  • Bank of America Merrill Lynch (▲06) 98.8%
  • RBC Capital Markets (▲11) 98.4%
  • Houlihan Lokey (▲05) 98.0%

Total Avg Compensation

August 2022 Investment Banking

  • Director/MD (10) $613
  • Vice President (37) $394
  • Associates (201) $256
  • 2nd Year Analyst (121) $162
  • 3rd+ Year Analyst (17) $156
  • 1st Year Analyst (386) $150
  • Intern/Summer Associate (79) $147
  • Intern/Summer Analyst (301) $92