Category Archives: Not Categorized

Bill Ackman and the Current State of Activist Hedge Funds, Part I

Bill Ackman, the forty-three-year-old founder of hedge fund firm, Pershing Square Capital Management, has had a rough go of late. Readers may recall that in 2007 he raised $2 billion from private investors in order to start a new hedge fund, Pershing Square IV.   Employing a highly-leveraged mix of common stock and call options,  Ackman invested the proceeds in […]

Leading Hedge Funds Making a Case for Gold

If the actions of some of the hedge fund industry’s leading managers is any indication, the attractiveness of gold as an asset class is on the rise.  Several recent disclosures support such a conclusion.  First, a recent survey performed by London-based researcher, Moonraker, found that 20 out of 22 hedge funds had added exposure to gold bullion to their portfolios. […]

Long/Short Mutual Funds

  The market downturn last year has led mutual funds to begin testing new strategies to produce gains with lower risk. Many managers are trying to replicate the methods used by long/short hedge fund managers. By finding negatively correlated positions, fund managers are able to offset losses with gains from other assets in the portfolio.   “130/30” Funds “130/30” funds […]

Emerging Markets Show True Colors During Global Slowdown

Emerging markets have seen explosive growth over the past decade, but with the recent contraction in the global economy, investors have a chance to look at real growth in individual markets. There is no doubt in my mind that the boom over the past couple of years in some countries were due to insatiable investors overbuying in whatever country the […]

Consumer Sentiment Dismal, US$ and US Treasuries Reaction A Head Fake

Today’s consumer sentiment numbers offer immediate confirmation that the issues I raised in yesterday’s post are clear and present dangers to the continued recovery of the debt and equity markets. As of this post, equity markets are down about 1.5% across the board, which is not surprising. However, the rally in the US$ and the US treasury market are in […]

Q2 EPS, LIBOR-OIS Spreads Narrow, July Retail Sales, Initail Jobless Claims

Second quarter earnings can be best characterized as light on revenue but strong on cost cutting, leading to better than expected EPS. The more positive bottom line results have helped fuel the equity market rally over the last couple of months. Meanwhile, Aug. 13 (Bloomberg) — The Libor–OIS spread narrowed to a level former Federal Reserve Chairman Alan Greenspan said […]

Don’t be surprised if your Hedge Fund gets a Subpoena

I received this email from Daniel Viola  at Sadis & Goldberg LLP this morning Don’t be surprised if you receive a subpoena or are contacted by the Securities and Exchange Commission (“SEC”).   The SEC has significantly increased its enforcement efforts since the recent discovery of certain high profile Ponzi schemes.  Effective August 11, 2009, the SEC has also made it […]

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 […]