Salient to Investors: David Stockman writes: A growing chorus of investors blamed last week’s stock market sell-off on esoteric but increasingly influential trading strategies pioneered by hedge funds like Bridgewater. Hedge fund performance has benefited from broken capital markets rigged by the Fed. Thesecasino gamblers bought every one of the
READ MORE... →Salient to Investors: Jim Simons at Math for America said: In the old days, commodities or currencies had a tendency to trend. Trend-following was great in the ’60s, sort of OK in the ’70s, but not OK in the ’80s. You look for anomalies in the data, when efficient market hypothesis
READ MORE... →Salient to Investors: Cargill, the world’s largest grain trader, shut its commodities hedge fund last month, a sign that commodity speculators are in trouble. Donald Steinbrugge at Agecroft Partners said hedge funds are supposed to make money in both bull and bear markets but managers bias towards rising prices. Steinbrugge
READ MORE... →Salient to Investors: Carl Icahn said: BlackRock have fueled a bubble in the high-yield debt market through the sale of ETFs filled with risky bonds, akin to the banks selling billions of dollars of faulty subprime mortgage bonds in 2007. The ETFs offer the appearance of liquidity and make the high-yield bond
READ MORE... →Salient to Investors: Art speculators’ whims often transform art into a terrible investment. Even beautiful art can be a fundamentally fickle asset. Adam Lindemann cites more speculative buying than ever since the financial crisis, but says people avoid artists whose price goes down. In the contemporary art world there is a
READ MORE... →Salient to Investors: Armen Karamanian at Admire Capital said you can replicate Bill Ackman’s portfolio very easily and for free and with immediate liquidity without the headline risk, and Ackman’s focus on a small number of large investments makes Pershing Square easier to replicate. Karamanian said the public hedge funds’
READ MORE... →Salient to Investors: Tony James at Blackstone said hedge funds are a way to play the stock market with lower volatility and lower returns – shoot-the-lights-out returns are best left to private equity and real estate. Neil Chriss at Hutchin Hill Capital said Calpers’ hedge-fund allocation was not big enough to
READ MORE... →Salient to Investors: The Teacher Retirement System of Texas cut its hedge fund allocation to 8% from 9%, cut equities by 4 percentage points and fixed-income by 2 percentage points, and increased risk parity – a strategy based on allocation of risk and private equity and real assets – and
READ MORE... →Salient to Investors: Calpers’ exit from hedge fund investing underscored that there is no magic bullet to dealing with mounting pension fund costs. Chris Mier at Loop Capital Markets said the problem cannot be fixed very rapidly. Wilshire Consulting said that in 2013, state pension plans had 75% of what they
READ MORE... →Salient to Investors: Amateur investors are giving up on trying to beat the market, while even the most sophisticated investors are rejecting strategies that require advanced math and managers with million-dollar salaries. ICI reports the average expense ratio on an equity mutual fund is down 25% in 10 years. Boston Consulting
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