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. […]
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 […]
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 […]
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 […]