Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Gold Seek – Risk has quickly regained its status as a four-letter word.
No one wants to hear about it and no one wants to think about it. But those willing to take it on (pragmatically, mind you) will likely earn greater rewards than they would have at any other point in the past twenty years.
Right now, the herd is absolutely afraid of any risk at all…even good risks. My case in point is when the bond market went upside-down again yesterday. Investors were buying up the “safest” assets in the world as fast as they could.
At one point in the day, T-bills were yielding less than zero. Essentially, someone was willing to lend the government money for nothing, absolutely zero, in return.
It’s like selling dollar bills for 99 cents. It just doesn’t make any sense, but it does prove one thing; practically no one is willing to take on any risk right now. No one knows what’s going to happen next and the sidelines are a cozy, warm, and safe place to be. I can hear the beaten down hedge fund managers (that still has a job) now, “I may not get ahead, but I’m not going to fall behind either.”
Pittsburgh Tribune Review – On Oct. 5, philanthropist and hedge fund billionaire Stanley Druckenmiller sat in his New York den, watching the Steelers play in Jacksonville.
Two weeks before, he yanked an offer worth more than $800 million to buy the fabled Pittsburgh franchise, and now the quarterback of his beloved Black and Gold was scrambling to escape the clutches of the Jaguars, en route to a narrow 26-21 victory in Florida.
But during every commercial, Druckenmiller scrambled to a nearby room, where computer screens tracked the daytime tumult of Asia’s financial markets — Tokyo’s Nikkei 225 average crashing more than 11 percent, Hong Kong’s Hang Seng index tanking, the Bombay Sensex plummeting.
Tacoma News Tribune – Changes in winning and losing investments have come so swiftly of late that you might not have realized your favorite approach has backfired lately.
International funds – the hot funds of the last few years – have turned more disappointing than U.S. stock funds. Gold has lost its luster or, more precisely, more than $200 since reaching more than $1,000 an ounce a few months ago. Oil is in a bear market – a decline of 20 percent or more. Small-cap funds, which typically would be shunned during rough economic times, have been on a roll.
The last few weeks have shown why financial planners try to discourage clients from loading up on a few winners while discarding everything else. They know that changes in cycles can come quickly, and without warning, turning winners into losers and vice versa.
Many analysts are confessing their surprise at the twists of the last few weeks. It now appears that the globe is not immune from U.S. economic problems, although that was a favorite theory until a couple of months ago.
