Personal Note: As can probably be guessed from the paucity of recent posts, I have been rather busy trying to set up a new partnership. So, though there have been a lot of things that have caught my attention, I haven’t been able to post much. I decided to take the medicine and do a few short posts when I get the time.
This is a much older story, first breaking in late September that has since gone into silent mode — probably as the deal-making is done or is killed by the majority owner. Essentially, the 150-year old trader Louis Dreyfus Commodities is hoping to reinvent itself from a flow-trader agency trading commodities to someone who can bet its own balance sheet. Continue reading “Trade Notes: buy Louis Dreyfus?”→
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: Continue reading “Background: Hedge Fund Fees, Terry Smith and Warren Buffett”→
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. Continue reading “Trade Notes: Is Philippe Jabre Right About European Banks?”→
The idea of distressed debt investing is simple enough: most of the time, debt is bought by institutional investors (otherwise known as long-only investors, or long money) in the hope that the steady (generally in the 6-10% annual) interest returns will be good enough for their long-term obligations. Then, as the debt cycle gets more and more speculative, you have everyone and their grandmother (sometimes literally) piling in. As the correction inevitably comes, borrowers can’t pay and lenders panic, and debt starts selling at a discount (i.e., if you are the unlucky owner of a dollar of debt, you want to get rid of it quickly, and are willing to sell at a discount, sometimes at pennies on the dollar). That’s distressed debt. Continue reading “Trade Notes: CQS’ Distressed Debt Fund”→