Fund Architects Commentary
OUT WITH THE OLD, IN WITH THE…OLD
Hey, guess which fabled bond manager just won a new mandate from an investor not named Bill Gross? Why, it’s Bill Gross, of course! Story goes that Old Mutual Global Investors, the South African relic with an anchor for a logo, announced that the erstwhile PIMCO chief will be taking over management of $270 million in assets for its Total Return USD Bond Fund. This is the first sub-advised win for Mr. Gross at his new employer – Janus and real chunk of cash for him to manage coming from anywhere other than the Morgan Stanley office in La Jolla, California. Proving once again there are no friends like old friends, Gross won the mandate from none other than PIMCO. Continue reading »
HEY…WAIT A SECOND
Fact: Greenwich Mean Time is derived from measuring the sun’s position in the sky at the Royal Observatory in London.
Fact: Coordinated Universal Time is based on a weighted average of the times of more than 400 atomic devices that measure the passage of time through the vibrations of atoms.
Fact: Nobody knows exactly what time it is. Continue reading »
GHOSTS OF GREENSPAN
Lest our investing spirits become a little too exuberant, current Fed Chief and aspiring market mystic Janet Yellen took time out last week to cast a chill over the irrational crowd. Indeed, speaking before the International Monetary Fund spooks in Washington, the Chairwoman suggested that, one, the years-long stock rally may have driven equity prices too high, and, two, debt-market investors are taking excessive risks. Eeeek! Continue reading »
Remember the good ol’ days when all we had to worry about were simple scams like Ponzi schemes, pump-and-dump cons, and front-running frauds? It all seems so archaic now. Nowadays, humans – vile or otherwise – have been mostly removed from the marketplace, and in their places are machines with secret programs trading stocks too fast to be seen or recorded on a stock ticker or computer screen. We’re in the era of high frequency trading, and the big boys are spending billions to get a peek at prices a “flash” before everyone else. Continue reading »
THE NIFTY FIVE HUNDRED
History tells us that by the time everyone in the financial markets spots a trend, it’s over. Success becomes a fad and a fad inevitably becomes a failure. So what’s up with the unremitting march into index funds? Word’s going around that indexing has become so popular it’s threatening the efficiency of the markets. Continue reading »
HEDGE FUND, DOFF THY NAME
What’s in a name? That which we call a rose
by any other name would smell as sweet.
According to the abstrusely-named research outfit HFR, Inc., there were more than 8,000 hedge funds in operation at the end of 2014. Allegedly, said funds were responsible for a staggering $2.8 trillion in assets under management, a threefold increase in the cumulative number over the last ten years. Puzzlingly, though, less than 1,200 of these firms use the term “hedge fund” in the “about us” section of their SEC investment adviser registration. And of the other 6,800? “O! be some other name.” Continue reading »
IT’S ABOUT TIME
Ever heard of David Blitzer? We hadn’t either. Probably should have though. He has the altogether cool job of running the S&P Dow Jones Index Committee, the group responsible for picking stocks in the Dow Jones Industrials Average. Last week, the good Dr. Blitzer had the altogether cool job of announcing that, for the first time in its seemingly timeless history, the Dow’s panel of listed companies will be including…a watch maker. Continue reading »
IS THERE A DOCTOR IN THE HOUSE?
In case you missed it, what with “Professor Oil” falling so spectacularly off his lectern, ol’ “Dr. Copper” has been stumbling pretty badly himself. Indeed, spot price on the red metal has fallen nearly 10% since the start of the year, trading somewhere around $5,672 a ton for those keeping score. Continue reading »
“MAGIC ON THE FLOOR” NO MORE
All that noise you’re not hearing is what used to be the organized chaos of the Chicago commodity pits. Seems the parent company of the Chicago Board of Trade is quietly ending the practice of traders establishing prices by yelling at each other.
The CBOT -- the world's oldest futures and options exchange -- was established in 1848
Some say the practice of “open outcry” trading goes back to the ancient world, when the Phoenicians, Greeks, and Romans traded options against ship cargoes. Others point to the 12th century, when European merchants gathered during fairs to loudly negotiate for the future delivery of merchandise. Still others trace the practice back to 1730 Japan, where feudal lords formed the Dojima Rice Market. Continue reading »
YOU WANT FRIES WITH THAT?
McDonald’s CEO Don Thompson “retired” last week. A cynic might infer that his forced departure had something to do with the 21% drop in fourth-quarter earnings for the universe’s largest restaurant chain. Or maybe its truck-stop-class bathrooms. But we’re willing to be a bit more charitable. After all, the good Mr. Thompson, who’d been in charge of flipping burgers and maintaining sanitation at the Golden Arches for less than three years, claimed it was “tough to say goodbye to the McFamily.” Continue reading »