Monthly Archives: August 2009

Why do you buy an asset?

“We construct portfolios the way theory says one should, which is different from the way many, if not most, construct their portfolios.  We do it on a risk-adjusted rate of return.” – Bill Miller, legendary investor Why do you buy an asset? Because you believe that it is worth more than what you are paying for it. Assume you can […]

Hedge Funds Try to Keep Pace With Equities Market

Hedge fund manager consultant, Hennessee Group LLC, reported that managers benefited as international equities rallied in July, while the unpredictability of government intervention continues to be one of the greatest concerns for hedge funds. “We have expected greater scrutiny and new regulation for the financial industry, and specifically for hedge funds, in 2009,” commented Charles Gradante, Co-Founder of Hennessee Group. […]

Learning To Trust Real Estate Again * Ally Bank * California’s Ongoing Challenges

Once Bitten: Learning to Trust Real Estate Again The housing bust burned real-estate investors. Even more frightening, many investors were blindsided by the bust because “credible” officials as high up as then -Federal Reserve Chairman Alan Greenspan were convincing them housing was immune to speculative bubbling. At some point, however, investors will be wise to forgive the real-estate market and […]

Five Interesting Topics on the HedgeCo Q & A Board

 The HedgeCo Q & A Board provides a forum for parties interested in the hedge fund industry to share information. Questions range from people trying to understand what makes hedge fund different from mutual funds to how to calculate complex statistics for portfolio performance. Here is a summary of five of the most popular questions.  Every industry has its excesses. […]

HFT “flash” Trade Fallout, Goldman Sachs Connection, Nasdaq Admission, Earnings of Interest: LINC, LOPE

We have been following this “flash” trading story closely and need to remain vigilant. The fallout from a clampdown on High Frequency Trade (HFT) could be far reaching and is difficult to predict. However, I’ll take a stab at a couple of results that seem like obvious issues: 1) If HFTs are banned we should witness a disturbing collapse in […]

Revolution from Economic Tyranny

I define my coined term, “Economic Tyranny” as: The forced determination of an entity’s funds controlling its supply and demand. Are we being blinded by a strong market run fueled by the monetization of massive debt spending? The public market is just a financial intermediary, a derivative of a sort of the underlying actual commerce of the company.  That is, […]

Market Neutral Mutual Funds

  With last year’s market-wide slump, mutual funds are trying to take a play out of the hedge fund playbook. One of the more common strategies employed by hedge-like funds is market neutrality. By taking off-setting positions in equities, fixed-income securities, options, etc., managers can eliminate market risk. Market neutrality conceptually works like this: If a fund manager believes that […]

Geithner’s Rant, Obama Administration’s Desperation?, Ramifications of the Clunker Plan

This story is quite disturbing. The Obama administration is sliding down a slippery, or should I say, slimy slope. In Q4 of last year fear mongering was the tactic of choice to push policy (e.g. auguring global financial ruin if senators didn’t quickly pass questionable legislation.) In Q1 & Q2 of this year financial market manipulation was the potion incorporated […]

Hedge Fund Regulation: It’s Back!

Reposted from “Hedge Fund Regulation: It’s Back” on the Intralinks.com Blog. And this time it’s taking private equity and venture capital with it. First, let’s quickly rewind to 2006, when hedge funds throughout the U.S. were completing their ADV and implementing technology to retain their e-mails and documents. At the time, they were anticipating having to register with the SEC […]

There’s A Czar For That Too * Our Trade Deficit Answer * California’s Mortgage Protection Plan

Yeah, There’s a Czar for That It is beginning to appear that the job of high-up elected officials is simply to hire others to oversee the issues we elected them to solve. President Obama has appointed a czar for nearly every significant issue that faces his administration. According to a recent article in the Chicago Tribune, “Republican Sen. John McCain […]