How come?
Stupid investors who systematically take the wrong side of the fence?
Or something else – as there are: these fund are used as a hedge. What makes sense.
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Showing posts with label hedge funds. Show all posts
Showing posts with label hedge funds. Show all posts
Friday, 24 July 2009
Bulls versus Bears
Long before there were leveraged ETFs, the only leveraged play in town were the mutual funds of Rydex. Now here’s something strange: these funds seem to have become the perfect contra-indicator for the markets; if the bears are active (the red line) than the indices are climbing and if the bulls (the green one) are on top than the trend is down.
How come?
Stupid investors who systematically take the wrong side of the fence?
Or something else – as there are: these fund are used as a hedge. What makes sense.
Sphere: Related Content
How come?
Stupid investors who systematically take the wrong side of the fence?
Or something else – as there are: these fund are used as a hedge. What makes sense.
Sphere: Related Content
Tuesday, 7 July 2009
When the music stops...
If you want to see the fall out of the real estate bust in the US, click here.
Edgar Martins, a Portuguese photographer, made this pictures for the NY Times. Be quick, before this paper also halts its activities.
An absolute fabulous novel is out: Hedge Fund Wives. You find the six first chapters here.
There was a time when the European Securitisation Forum was held in Barcelona. Brilliant time, that June 2007, when we drunk champagne and danced to a rock band called D’Leverage.
How different for the ex-colleagues who attended this year in Edgware Road, rather a cheapish venue in London, where coffee had replaced the bubbles.
The reason is obvious: the industry of repackaging mortgages, consumer credit or auto loans has ceased to exist
Edgar Martins, a Portuguese photographer, made this pictures for the NY Times. Be quick, before this paper also halts its activities.
An absolute fabulous novel is out: Hedge Fund Wives. You find the six first chapters here.
There was a time when the European Securitisation Forum was held in Barcelona. Brilliant time, that June 2007, when we drunk champagne and danced to a rock band called D’Leverage.
How different for the ex-colleagues who attended this year in Edgware Road, rather a cheapish venue in London, where coffee had replaced the bubbles.
The reason is obvious: the industry of repackaging mortgages, consumer credit or auto loans has ceased to exist
Tuesday, 30 June 2009
About correlation
I found this morning this website http://www.etfconnect.com/.
A very comprehensive site that not only shows you around in the ETF-universe but also in the world of funds.
One function is the ‘fund sorter’ which let you sort out funds versus various criteria.
Now, there exist close-end funds and ETF investing in almost the same underlying. Only thing: an ETF is shadowing an index very closely while a closed end fund –as an example- can quote with a premium or a discount.
Now imagine you have an ETF and a closed-end fund investing in the same underlying. Normally they should move in the same direction at the same pace. Their ratio should be 1.
But this is not always the case.
As an example we take the Market Vectors Russia ETF and the Templeton Russia Fund (ticker: RSX and TRF).
They have almost the same underlying but they do not move in unison due to the fact that TRF can quote at a discount or a premium.
As is illustrated.
A very comprehensive site that not only shows you around in the ETF-universe but also in the world of funds.
One function is the ‘fund sorter’ which let you sort out funds versus various criteria.
Now, there exist close-end funds and ETF investing in almost the same underlying. Only thing: an ETF is shadowing an index very closely while a closed end fund –as an example- can quote with a premium or a discount.
Now imagine you have an ETF and a closed-end fund investing in the same underlying. Normally they should move in the same direction at the same pace. Their ratio should be 1.
But this is not always the case.
As an example we take the Market Vectors Russia ETF and the Templeton Russia Fund (ticker: RSX and TRF).
They have almost the same underlying but they do not move in unison due to the fact that TRF can quote at a discount or a premium.
As is illustrated.
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Tuesday, 2 June 2009
The sky is not the limit
Technically we’re off to the races. If one looks to the chart of the S&P 500, he’ll have to admit how bullish the chart pattern is. However, this pattern is painted with mark-ups. Meaning that in the end of the session suddenly high volume let prices soar. This was the case on Friday and yesterday.
First let’s look to the opening of yesterdays session. A lot of money came in to paint the steeply higher opening.
First let’s look to the opening of yesterdays session. A lot of money came in to paint the steeply higher opening.
And then at the end there was another volume surge in order to paint the tape in a rather positive way.
Monday, 18 May 2009
The EUR/USD and ZAR
Thank you, Goldman Sachs for informing us about the development of two trends in the FX universe.
Hedge funds are positioning themselves to short the dollar. Not surprisingly especially in EUR/USD. And some flows were directed by these hedge funds to non-Japan Asian currencies as the CNY, HKD en INR (China, Hong Kong and India).
And than there was this piece of news from Reuters:
(Reuters) - British mobile phone giant Vodafone (VOD.L) has already brought 20.5 billion rand ($2.38 billion) into South Africa to buy a 15 percent stake in local operator Vodacom, the latter's lawyer said on Sunday.
With unions trying to block the deal with a last-minute legal injunction, the Vodacom lawyer said the money arrived on May 7 and the rand would fall if it had to be repatriated.
We know in the mean time that green light was given by the Pretoria High Court and Vodacom , de biggest listing on the JSE this year, started trading. So the shorters of the ZAR last week, have to cover their positions as the 20 bln ZAR will not be repatriated.
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Hedge funds are positioning themselves to short the dollar. Not surprisingly especially in EUR/USD. And some flows were directed by these hedge funds to non-Japan Asian currencies as the CNY, HKD en INR (China, Hong Kong and India).
And than there was this piece of news from Reuters:
(Reuters) - British mobile phone giant Vodafone (VOD.L) has already brought 20.5 billion rand ($2.38 billion) into South Africa to buy a 15 percent stake in local operator Vodacom, the latter's lawyer said on Sunday.
With unions trying to block the deal with a last-minute legal injunction, the Vodacom lawyer said the money arrived on May 7 and the rand would fall if it had to be repatriated.
We know in the mean time that green light was given by the Pretoria High Court and Vodacom , de biggest listing on the JSE this year, started trading. So the shorters of the ZAR last week, have to cover their positions as the 20 bln ZAR will not be repatriated.
Tuesday, 5 May 2009
Best places I know...
Brussels is boring, states an OECD report.
Well, maybe. Though you can wine and dine as nowhere else and taste more beers than you can dream about.
Even the same OECD report states that the best dining city is Paris – it’s clear that these officials don’t have to pay the bill themselves...
But more about the French in this report:
The French spend more time sleeping than anyone else in OECD countries. They also devote more time to eating than anyone else and nearly double that of Americans, Canadians or Mexicans. The Japanese sleep nearly an hour less every night than the French and also spend longer at work and commuting than they do indulging in leisure activities.
I happen to know some French people in Dublin.
Nice folks and so very … French.
Always in for a good night at Lillie’s Bordello.
Et maintenant, des nouvelles concernant la région bordelaise et le récolte de 2008.
It’s the Live-ex index of fine wine prices which is tracking the price of French finest. Take a look to the price of a crate of 2008 Lafite.
Now this is called a parabolic price rise.
Well, maybe. Though you can wine and dine as nowhere else and taste more beers than you can dream about.
Even the same OECD report states that the best dining city is Paris – it’s clear that these officials don’t have to pay the bill themselves...
But more about the French in this report:
The French spend more time sleeping than anyone else in OECD countries. They also devote more time to eating than anyone else and nearly double that of Americans, Canadians or Mexicans. The Japanese sleep nearly an hour less every night than the French and also spend longer at work and commuting than they do indulging in leisure activities.
I happen to know some French people in Dublin.
Nice folks and so very … French.
Always in for a good night at Lillie’s Bordello.
Et maintenant, des nouvelles concernant la région bordelaise et le récolte de 2008.
It’s the Live-ex index of fine wine prices which is tracking the price of French finest. Take a look to the price of a crate of 2008 Lafite.
Now this is called a parabolic price rise.
Thursday, 19 March 2009
Hot town, summer in the Citi
There are a lot of rumors from traders that repo desks are continuing to call in shares used to short financials such as Citi and AIG.
This is causing a forced covering of all financial shorts and it’s becoming impossible to put on new short transactions.
Hey folks, look out what you’re doing there…
This is the Volkswagen thing all over again. And even better. Because this move seems to become self feeding.
This is what the Wall Street Journal wrote last week.
Hedge funds rushed in to buy preferred shares of Citigroup after the New York bank announced last month that it would convert preferred shares into common stock. The fast-money crowd hoped to scoop up a quick profit based on the attractive conversion terms being offered by Citigroup to preferred shareholders, including the government.Now, though, the hedge funds are licking their wounds. The reason: Their strategy of buying Citigroup preferred shares while selling short the common stock backfired. Since March 5, the price of Citigroup common shares has tripled, including a 23% jump Wednesday that left the stock at $3.08 in 4 p.m. New York Stock Exchange composite trading.
This is causing a forced covering of all financial shorts and it’s becoming impossible to put on new short transactions.
Hey folks, look out what you’re doing there…
This is the Volkswagen thing all over again. And even better. Because this move seems to become self feeding.
This is what the Wall Street Journal wrote last week.
Hedge funds rushed in to buy preferred shares of Citigroup after the New York bank announced last month that it would convert preferred shares into common stock. The fast-money crowd hoped to scoop up a quick profit based on the attractive conversion terms being offered by Citigroup to preferred shareholders, including the government.Now, though, the hedge funds are licking their wounds. The reason: Their strategy of buying Citigroup preferred shares while selling short the common stock backfired. Since March 5, the price of Citigroup common shares has tripled, including a 23% jump Wednesday that left the stock at $3.08 in 4 p.m. New York Stock Exchange composite trading.
Wednesday, 11 March 2009
Running for the hills
What do we read on Bloomberg?
"Investors pulled out a total of $11 billion from hedge funds in February as stocks worldwide tumbled amid signs a global recession is deepening. Redemptions were about a third of the value in January, after the industry lost about $400 billion from its June peak to December through market losses and withdrawals, a preliminary Eurekahedge Pte report showed. The February figures were based on 41 percent of funds that disclosed estimates by March 10 to the Singapore-based research firm."
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"Investors pulled out a total of $11 billion from hedge funds in February as stocks worldwide tumbled amid signs a global recession is deepening. Redemptions were about a third of the value in January, after the industry lost about $400 billion from its June peak to December through market losses and withdrawals, a preliminary Eurekahedge Pte report showed. The February figures were based on 41 percent of funds that disclosed estimates by March 10 to the Singapore-based research firm."
Friday, 20 February 2009
Gloom and doom
Yes, everything looks gloom and doom indeed.
Not only the headlines – UBS, Rio Tinto, stock indexes, banks- sound very negative but also in less suspected corners we only see dire conditions and predictions.
Bloomberg tells us that in January 74 bln USD was withdrawn by hedge-fund investors. These withdrawals were the second highest on record after the 117 bln USD outflows in December.
Losses and withdrawals cut assets by 37 percent in the second half of 2008 to an estimated 964 billion USD. The entire industry is under pressure in order to survive.
The Eastern Europe story has now hit the headlines of the Wall Street Journal. We’re still not sure if a meltdown is underway. Or is this the meltdown?
Not only the headlines – UBS, Rio Tinto, stock indexes, banks- sound very negative but also in less suspected corners we only see dire conditions and predictions.
Bloomberg tells us that in January 74 bln USD was withdrawn by hedge-fund investors. These withdrawals were the second highest on record after the 117 bln USD outflows in December.
Losses and withdrawals cut assets by 37 percent in the second half of 2008 to an estimated 964 billion USD. The entire industry is under pressure in order to survive.
The Eastern Europe story has now hit the headlines of the Wall Street Journal. We’re still not sure if a meltdown is underway. Or is this the meltdown?
Sphere: Related Content
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