Background: What is the Intrinsic Value of a Financier?

The question actually came to me last weekend at a party when an Englishman I was talking to said “Good Riddance” on hearing that BlueCrest had moved headquarters from London to Geneva.  I actually partly agree — probably for the first & last time — with Michael Farmer

“If one is a citizen and your country’s having a tough time, you pay your taxes and that’s it – although rather reluctantly if they are not spending it wisely,” Mr Farmer told the Financial Times.

Background: More Institutional Investors in Hedge Funds may be a Mixed Blessing

Preqin has the latest Hedge Funds investor review out.  The headline number itself makes interesting reading:  Institutional Investors now comprise 61% of HF investors globally.  That usually means large investors like pension funds (note:  if you’ve been inclined to scream about greedy HF managers and have a pension fund, now might be a good time to calm down).

Investment Strategy: How to Make Money in Bill Gross’ “New Normal”

Image via Wikipedia

I re-read a copy of Bill Gross‘s April 2009 Investment Outlook and some things — besides his very consistent world-view and investment philosophy — were refreshed again, especially his parting words:

Background: Hedge Fund Fees, Terry Smith and Warren Buffett

Terry Smith has written again about the kerfuffle he’s raised about his last entry on the Hedge Fund 2 & 20 deal.  He says that commentary on his calculation has centered either against the calculation methodology or basically said “so what?”  I don’t question his methodology, nor do I think it doesn’t rate some soul-searching.  However, there are a couple of other things that I really have an issues with:

Trade Notes: Is There a way to Play Global Warming and Weather Volatility?

 

Image via Wikipedia

 

The short answer would be an easy “Yes”.  This was emphasised most recently by the September returns of Clive Capital, Chris Levett’s commodity hedge fund based on macro calls.  He used to run a similar portfolio at Moore Capital before he left to start up his own firm in December 2007 (in case you’re wondering,  his middle name is Clive).  That fund returned 6.6% last month, that’s a pretty tidy profit on roughly USD 4 billion AUM.  More so considering it was up around 1.7% for the previous nine months.  I’m not a big fan of Clive because they tend to use rather a lot of leverage, don’t communicate much, and haven’t been able to protect the downside as they claimed in their marketing material.  In any case, the reasons for the performance are interesting,

Background: Terry Smith, Warren Buffett and Hedge Fund Fees

Terry Smith

Terry Smith, CEO of Tullett Prebon has a blog of his own, probably preparatory to his starting his new fund management shop Fundsmith.  He talks about straight talking in his aptly named blog.  If one of his first blogs is anything to go by, it should be interesting reading.  In this, he talks about fund management fees versus investing in Berkshire Hathaway, Warren Buffett‘s investment vehicle.  To wit,

Background: The Funds of Hedge Funds BS continues

After getting caught with their pants down in the Bernie Madoff affair, the FoHF industry has rediscovered Due Diligence.  You know,  the thing they used to have great reams of reports on, without any supporting evidence of investigation. 

Background: Hugh Hendry on BBC HARDtalk

 

Hugh Hendry of Eclectica Asset Management

 

One of my favorite hedge fund managers Hugh Hendry is in the news again.  This time, he’s on BBC’s HARDtalk (if you have BBC iPlayer, watch it there, if not here’s the YouTube link).  The commentariat and the resultant comments are gloating (and this with more than a bit of schadenfreude) that Hugh Hendry is losing money!  Of course, this is HARDTalk and Stephen Sackur is a much more thoughtful man.  They have a rather interesting discussion centering around risk, shadow banking, hedge funds, and casino banking.  I’ve always thought that Hendry’s performances on fora like CNBC are more a function of his lack of respect for the presenters and their audiences.  This, this was much more nuanced. 

Trade Notes: Is Philippe Jabre Right About European Banks?

Philippe Jabre

Philippe Jabre is turning bullish US equities and bearish (a change of sentiment from last year) European banks.  Either way, he’s being pretty relaxed about allocation as:

There’s enough time to allocate, the markets are not going to disappear, … We’re waiting for asset valuations to return to reflecting fundamentals, and to stop being so correlated.  A lot of European banks have now recovered to book or normalized valuations as uncertainties over the effects of the stress tests and now Basel, have softened.  But loan growth is falling, which will limit earnings growth, and if bank shares are going to trade at above book value, there has to be growth.