“Valeant was a sewer, and those who created it deserved the opprobrium they got.”

That’s Charlie Munger speaking Saturday at the Woodstock for Capitalists… the annual Berkshire Hathaway shareholder meeting.

DealBook was live-blogging from the event, and Michael Merced offers a blow-by-blow account of the question and answer session with Warren Buffett and Vice Chairman Munger.

Whoosh… they do not like Valeant Pharmaceuticals, and they had some pointed words for Sequoia Fund, which has fallen off a cliff after shares of VRX fell 67% in a year.

According to Buffett, Berkshire was “asked to take a look at” Valeant as an investment.

It didn’t.

And then Buffett essentially called the firm a fraud by comparing it to “chain letter” companies.

"In my view, the business model of Valeant was enormously flawed," said Buffett.

Here’s the breakdown.

The other interesting statement from Buffett?

His animated swipe at hedge funds in general.

This shouldn’t be a surprise though given that he has been anti-hedge fund over their performance and overhead fees for years.

But after 2015’s bad year for the industry, I suppose he gets to take his victory lap.

“If the ideas are good, they will happen. If they are bad, they won’t get support. It is hard for activism to be harmful.”

That’s Bill Ackman, responding to the political scrutiny surrounding efforts by some members of the Senate to change the rules again and curb certain efforts of activist hedge funds.

Here’s the most important passage from the article… because it’s evidence that whatever is happening in the minds of these Senators… it isn’t reality.

“A pathbreaking study in 2015 led by Lucian Bebchuk at Harvard Law School found no evidence that activist investors take a “pump and dump” approach to investing, and the performance of the company often improves in a manner consistent with the activist’s initial goals in buying the stock.”

So it’s all in their head. Shocking. But they’ll still move ahead with their regulatory fire drill.

Don’t expect reality to trump feelings… don’t ever expect results to trump intentions.

This is the U.S. Senate we’re talking about.

The new issue of Modern Trader – which will be available at Barnes & Noble in less than two weeks – centers on the hedge fund industry as we prepare to head to the SALT Conference next month.

I wrote a long defense of activist investors… and I’m not apologetic for calling Senators Tammy Baldwin’s and Jeff Merkley’s “Brokaw Act” a terrible piece of legislation that will fuel a wealth of unintended consequences.

Only 25% of Congress has any background in economics. The Brokaw Act is living proof.

“Long-term is often defined as the next election cycle, an attitude that is eroding the economic foundations of the country.”

There are a lot of things that I don’t know… but there are few things that really surprise me.

On Sunday evening I learned three things. And all three surprised me.

First, I realized that the hero of the film Hoosiers – Jimmy Chitwood – only had four lines of dialogue in the entire movie… What!?!

Second, I learned that because Detroit Tigers superstar Miguel Cabrera is off to such a lackluster start – he is in danger of falling out of the Top 50 for all-time MLB career batting average.

That’s important because he is the only active player in the top 50 for career batting average.

Third, I completely missed this big story, and I usually read everything.

There’s rumblings that if Hillary Clinton wins the presidency, BlackRock’s Larry Fink is a favorite to become Treasury Secretary.

In fact, he’s already got a “Washington Ready” team, according to Intercept.

Fink has long said that he wants to become Treasury Secretary. To each their own I guess, but that’s like me saying that I would want to be the White House Press Secretary one day…

No thanks. (If you want to know why, here’s self-described lyrical genius Kanye West.)

Here’s pretty much all you need to know when it comes to the “Why Larry Fink”:

“Fink has in recent months stressed an end to “short-termism” in the financial markets. For example, he wants to limit share buybacks that pump up stock prices, and encourage investors to hold stock longer, to focus on long-term corporate performance.”

It was curious where all this “quarterly capitalism” chatter was coming…

10 Qs have been mandatory since 1970, and the idea of quarterly updates are rooted in the 1934 Securities Act. It looks like we’re going to be turning away from the overwhelming amount of earnings reports in the future… And, yes, this is from Zero Hedge.

(For the record, I made a mistake in the upcoming Modern Trader article and referred to it as the 1934 Banking Act… my error... The 1933 Banking Act and the 1934 Securities Act are two distinctly different, distinctly misguided, and distinctly outdated pieces of financial legislation).