Fund Architects Commentary
PULLING NO PUNCHES
So, activist investor Carl Icahn and the unfortunately-named Larry Fink, boss of BlackRock Inc., were brought to CNBC’s optimistically-titled “Delivering Alpha” conference last week. Their expected debate, to be moderated by “Judge Wapner” no less, was ill-advisedly promoted as “A Conversation About Activist Investing.” Uhh, not hardly. The Judge should’ve been a referee.
BlackRock became the world’s biggest money manager in 2009 following acquisitions of State Street Research, Merrill Lynch Investment, and Barclay iShares Continue reading »
U.S. equity indices posted mixed results for second quarter 2015 (2Q15) led slighter higher on a total return basis by large cap stocks as measured by S&P indexes. International stocks and emerging market equities as measured by MSCI EAFE and MSCI Emerging Markets achieved positive gains for the quarter. Both domestic and international bonds as measured by Barclays U.S. Aggregate Bond and Barclays Global Aggregate Bond ex U.S. indexes provided negative returns as investors anticipate the U.S. Fed raising the Fed Funds rate and as the European Central Bank (ECB) continued their bond-buying program. Domestic and international REIT indices were lower as investor appetite diminished for these higher yielding sectors. Commodities, in a broad sense, rose during the quarter as oil prices rebounded from a near-term low set in March 2015. Continue reading »
Quick update: Greece has defaulted on its debts, corporate earnings have hit the wall, and the U.S. economy still meanders. Interest rates are expected to go up, bonds are expected to go down, and the stock market isn’t expected to go much of anywhere.
And, oh yeah, the bitcoin just broke out to its highest level since March 23. Nobody expected that. Continue reading »
A REAL GREEK TRAGEDY
It’s fairly well known that Greek tragedy is a form of theatre from Ancient Greece, Athens specifically. Less known, perhaps, is that players in 5th century BC established “rules” for their heartbreaking dramas. Indeed, plots were told in a trilogy – a series of three narratives designed to tell one long depressing story. Amazing how life imitates art.
The tragedy begins with a “prologue” where the background of the ensuing story is explained.
The IMF and eurozone governments have been keeping Greece afloat with some $279 billion in emergency loans for the past five years. But the eurozone portion of that bailout runs out June 30. With little sign of progress in talks on Greece’s international bailout, policy makers are considering whether dispirited nation should stay in the Eurozone. Continue reading »
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 »