Fund Architects Commentary
FLASH TEST DUMMIES
Flashback: It’s 1792, and we’re shouting buy and sell orders from a New York City curb to traders standing under a Buttonwood tree. Investing life is pretty simple…arbitrage is a word known only in France and front running refers to one’s foot speed to the pub after a tough day on the Street. High frequency trading is a relative thing that involves the occasional confluence of good weather, a sharp pencil, and green eyeshades. Continue reading »
NOTHING PRETTY AT CITI
Quick…name the only two major U.S. banks to twice fail the Fed’s stress test…
If you answered Ally Financial and Citigroup, there’s a toaster in it for you. If you knew that Ally was actually considered a major U.S. bank, maybe you’ll get a four-slicer. Continue reading »
US GDP for fourth quarter 2013 (4Q13) was revised downward to 2.4% from the initial estimate of +3.2%. Many pundits have attributed rough winter weather to recent economic data coming in weaker than expected. The euro area has now posted three consecutive quarters of positive GDP growth, which is a sign of stability. The rate of growth has been less than 1% but is encouraging nonetheless. Japanese authorities continue onward with the implementation of Prime Minister Abe’s policies in the attempt to reinvigorate their long dormant economy. Continue reading »
GET A (HERBA)LIFE
Short selling: The sale of borrowed shares that will have to be repurchased later.
Ever thought about the definition of pyramid schemes? Probably not, cuz’ by definition they’re illegitimate. But Bill Ackman has. A lot, in fact. And who’s Bill Ackman? Well, he’s manager of the Pershing Square hedge fund, and he’s shorted $1 billion worth of Herbalife (HLF), the LA-based nutritional products company, betting the company will go bust because it’s nothing more than an illegal pyramid sales organization. Continue reading »
VIRTUAL IS AS VIRTUAL DOES
By definition, currency as a medium of exchange is a trust-me transaction. Think about it…we bank on the ability to swap an otherwise worthless cut of paper for some quantity of goods and services. Why? Because we know that behind that picture of a long-dead president there’s a sovereign nation with a standing army and an enormous enforcement mechanism to make sure the exchange is an honorable one. Continue reading »
YOU’VE GOT MAIL
Hey…did you get that e-mail from a mysterious Nigerian promising you a boatload of cash? No? How ‘bout the one where you’ve won millions of dollars in some foreign lottery that you’ve never heard of? Not that one either? Make big money as a mystery shopper? Which Twilight Character Are You? Nothing? Continue reading »
US GDP for fourth quarter 2013 (4Q13) was estimated to have risen at an annual rate of +3.2%. This comes on the heels of strong 3Q13 growth, which recorded +4.1%. The past two quarters measurement of economic growth was accelerated from previous time periods in 2013.The euro zone is finally forecasted to experience positive GDP growth in 2014 after years of contraction. Some experts have said Europe has turned the corner and there is a lot of corner left to turn. To us, this means that economic conditions in the region have stabilized but there is still a long way to go and by no means have investors missed out on potential rewards investing in the area may bring. We must still be mindful of pitfalls and speed bumps along the way, however. Japan, with the aid of Abenomics, has now registered five straight quarters of positive growth. Prime Minister Abe is determined to grow and inflate Japan’s economy by focusing on fiscal stimulus, monetary easing, and structural reform. Central bank intervention from around the globe continues to be a critical component of financial market returns. Continue reading »
EMERGING, EMERGING, GONE.
Anyone within earshot of a cable news station last week most likely heard the news on the so-called developing markets, specifically that they’re anything but. Turkey caught most of the headlines as its lira traced sharply downward until finally the country’s central bank implemented a giant interest-rate hike, followed in short order by South Africa and its rand for a separate but similar reason. Continue reading »
THE GRASS IS GREENER
“So if we don't get some cool rules ourselves - pronto - we'll just be bogus too! Get it?”
With voters in the nation’s two stoner (and Super Bowl) states –Colorado and Washington – approving the legalization of recreational marijuana last November, it’s high times for companies in the cannabis biz. Just ask the executive dudes at the U.K.’s GW Pharmaceuticals (GWPH), which beyond raising $88 million in a follow-on offering on the NASDAQ last week, has climbed by more than 400% since its OTC listing last May. Continue reading »
SHOULD OLD ACQUAINTANCE BE FORGOT?
In case you missed it, and more than a few did, the first trading session of 2014 went off with a whimper. Not a lot off, to be sure, but off nonetheless. Indeed, amid the confetti, empty champagne bottles, and cheap party hats, stocks wobbled around the market floor pretty much all day Thursday, this year’s version of the timeless Dow finally stumbling into its close down 135 points. Continue reading »