Goldman Sachs is closing up shop at its flagship Global Alpha hedge fund. Global Alpha is one of the best-known quantitative hedge funds in the world. In its heyday the fund managed $12 billion. But after a series of bad bets, assets tumbled over 90% to $1 billion. The fund’s downfall started in 2007 when computer-driven trading strategies went haywire. Global Alpha lost about 23% that August and reportedly finished the year down 40%. The fund regained some of its losses in 2008 and 2009 with gains of 4% and 30%, but it never fully recovered. Global Alpha was flat last year and it is down … [Read more...]
Archives for September 2011
That Custom-Tailored Obama Scandal You Ordered Is Finally Here
The Daily Show With Jon Stewart Mon - Thurs 11p / 10c That Custom-Tailored Obama Scandal You Ordered Is Finally Here www.thedailyshow.com Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook … [Read more...]
What We’re Reading 9-16-11
Typical U.S. Family Got Poorer During the Past 10 Years, Dennis Cauchon and Barbara Hansen, USA TODAY An Economy In Trouble, Amity Shlaes, The Wall Street Journal The 2013 Tax Cliff, The Wall Street Journal Fidelity Names New Manager for Struggling Magellan Fund, The Associated Press … [Read more...]
What the Franc!
Julia Child made cooking look easy. The same cannot be said about U.S. Federal Reserve Chairman Ben Bernanke and monetary policy. He makes it look painful. On Thursday, the U.S. Federal Reserve decided it’s in everyone’s best interest, particularly that of French banks, to increase U.S. dollar liquidity in Europe. Stocks traded up on the news, especially the French banks, while bonds such as German bunds and U.K. gilts fell, as did the U.S. dollar against the euro. All in all, another example of how interventions switch the risk trade on and off depending on the mood of the day. The … [Read more...]
Is Your Money Fund Safe?
You really have to be careful what you read these days. There is loads of misguided advice pumped out of the financial press. I recently came across an article in one of the leading personal finance magazines that offered especially appalling advice. The article was about money funds and whether or not they are safe given the euro area’s sovereign debt and banking crisis. What does the euro area have to do with U.S. money funds? According to Fitch Ratings, prime U.S. money funds have almost 50% of their assets invested in European financial institutions. Not such a comforting thought when you … [Read more...]
What We’re Reading 9-9-11
Will the IMF Stand Up to Europe? Kenneth Rogoff, Project Syndicate What Austerity? The Wall Street Journal Buffett's Latest Tax Break The Wall Street Journal Why the Stimulus Failed The Wall Street Journal Is Inflation the Answer? Raghuram Rajan, Project Syndicate … [Read more...]
Robbed Blind
As you can see in this chart, stocks had a tough go of it from 1967 to 1982, gaining hardly any ground. Fifteen years is a long time—a retirement for some. But what’s not illustrated by the chart is the loss from inflation. It’s a lot worse than it looks. According to a report by Laffer Associates, stocks lost two-thirds of their value from 1967 to 1982 when accounting for inflation. That’s why it’s crucial to get paid for investing in the stock market. Dividends are the nickels and dimes you pick up here and there to help you combat the losses you can’t even see. … [Read more...]
Meltzer on Fed’s Evans, U.S. Labor Market, Obama
A $65-Billion Bet
I was listening to Bloomberg radio the other day and Carly Fiorina was on as a guest. Carly is the former CEO of Hewlett Packard. She led a controversial acquisition of Compaq that turned HP into the world’s largest PC maker. Carly was on to talk about Hewlett Packard’s recently announced decision to exit the PC business and move deeper into software with a $10-billion acquisition of Autonomy Corp. HP’s decision came as a surprise to investors—an unpleasant surprise. The stock plummeted 20% on the news. As I listened to the Bloomberg interview I was struck by how often Ms. Fiorina used the … [Read more...]
Gold, Speculators, and You
The temptation to be a speculator in this market is high thanks to some neck snapping stock market volatility, surging gold prices and pathetically low Treasury yields. In such an environment, I suggest you craft a diversified portfolio of stocks, bonds, and gold. If you don’t have an advisor, focus on exchange traded funds (ETFs) or mutual funds and stay away from individual stock picking. Keeping track of stocks can often times be too much work for one person. Like your yard, even if you stay on top of it with watering, it’s easy to one day wake up and see it burnt to a crisp. The … [Read more...]