Salient to Investors: After a decade as rock stars, hedge fund managers seem to be fading just as quickly as musicians do. Generating “alpha” is slipping further out of reach. Goldman Sachs said in May that hedge fund performance lagged the S&P 500 index by 10 percent this year, while
READ MORE... →Salient to Investors: Hank Smith at Haverford Trust said the story for stocks this year is about confidence replacing uncertainty and anxiety, a big driver for equity returns, and we are still far away from worrying about too much optimism or exuberance. Smith said the driver of equity returns from March
READ MORE... →Salient to Investors: Hamilton “Tony” James of Blackstone Group said stocks were a fool’s game compared with alternative investments. and investing in alternatives makes sense even when they underperform. James said the return from these idiosyncratic investments are very uncorrelated to the broader markets, so portfolio volatility falls. Hedge funds have been
READ MORE... →Salient to Investors: US companies are poised to post some of their weakest quarterly earnings reports in 4 years, in part due to a stronger dollar. The IMF cut its forecast for global growth in 2013 to 3.1 percent, and for the US to 1.7 percent. Analysts who reduced earnings forecasts
READ MORE... →Salient to Investors: Stephen Stanley at Pierpont Securities sees nothing on the economy side to have precipitated such a seismic shift in the Fed’s approach to QE. Stanley said QE was contributing to a market environment where people were taking too much risk, and the beginning of tapering in September is
READ MORE... →Salient to Investors: Share-price targets are rising at the fastest rate in two years. Bulls say the economy may gather enough momentum to expand on its own. Bears say price appreciation without profit gains shows declines are inevitable. Joseph Tanious at JPMorgan Funds says there’s a tight relationship between confidence
READ MORE... →Salient to Investors: Matthew Peron at Northern Trust said the strong jobs report is good for equities because it’s supportive for earnings growth, and we know this is not going to be a terrific earnings season. Peron said the focus will be on guidance and now is the time for the
READ MORE... →Salient to Investors: Brian Jacobsen at Wells Fargo Advantage Funds maintains an overweight rating on tech stocks because their gains show a “hand off” is starting, as investors move into industries that could outperform benchmarks later in the economic expansion. Jacobsen says higher interest rates historically bode well for tech stocks,
READ MORE... →Salient to Investors: Binky Chadha at Deutsche Bank said the market had been pricing in that the Fed would normalize rates much more slowly than it has done historically, and the shock has spilled over across all of the asset classes. The World Bank said the world economy will expand 2.2 percent
READ MORE... →Salient to Investors: Paul B. Farrell writes: 2014 is a virtually guaranteed disaster just waiting to ignite. Bubbles are everywhere. Kit Juckes at Societe Generale says all three worldwide financial bubbles in the last three decades – The Asian Bubble in the early ‘90s, Dot-com Bubble of the late ‘90s
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