The FT today has a dynamite article with the abovementioned title by Gavyn Davies, Chairman of Fulcrum Asset Management. As the title suggests, Mr. Davies speculates that the vast holdings of government debt create the possibility that central banks may forgive some of it so as to further stimulate growth. It’s a quite electrifying thought. In […]
Jim Stewart in the New York Times has noted the poor performance of many large university endowments, and in the process questions their large allocations to alternatives. Hedge funds figure prominently for many of them, and their investment committees are learning the hard way that uncorrelated returns are not unlimited, and that the hedge fund […]
Bill Gross is by any measure financially sophisticated. Which is why it’s entertaining to watch him reconcile his undoubtedly well-honed skills at investing with his firm’s management of one of the most overpriced closed end funds around. The closed end fund sector is one of the truly inefficient sectors in financial markets. Investors routinely confuse […]
The Fixed Income market has been a tough place to find much value for far longer than I can remember. And yet, that hasn’t stopped the returns from being nothing short of spectacular. In fact, it’s not hard to find securities that have outperformed equities, and most would agree that it’s been a surprisingly good […]
Quarterly Outlook September 2012 might well be regarded as the moment when the Federal Reserve committed itself unambiguously to reflation, as they came down clearly on the side of improved U.S. employment as the more important element of their twin mandate. In achieving “maximum employment and price stability,” as the Fed describes its statutory responsibility, […]
The evolving transfer of obligations from old to young is a theme that deserves more attention. It’s a slow-moving, demographic event so isn’t something that’s likely to produce a headline. But a consequence of the enormous debt the U.S., has built up and the under-funded entitlement obligations is that the bill will be paid by […]
On Monday Kraft (KFT) begins its new life as two new companies: Kraft Foods Group (KRFT) and Mondelez International (MDLZ). In fact, both stocks trade on a when issued basis already. The purpose of the split is to highlight the value in the company. The old Kraft consisted of a North American grocery business with low […]
Recently we’ve initiated a short position in Japanese Yen in our Fixed Income Strategy. Some observers have been forecasting economic catastrophe for Japan and its currency for many years based on its poor demographics and steadily worsening fiscal situation. Kyle Bass is one of the better known Japan bears, and he has written eloquently about […]
Coeur d’Alene (CDE) is a silver and gold mining company that we have owned in the past but do not at present. Like many bullion miners, they seem to be cheap relative to the NAV of the assets they own. CDE was down quite sharply during the Summer before rallying strongly starting in August when central bank […]
There’s a thoughtful op-ed by Gavyn Davies in the FT today (Why did Bernanke change his mind). The Fed has a dual mandate of targetting maximum employment consistent with stable prices (which they take to mean inflation no greater than 2%). What’s become clear following last week’s announcement is that the priority the Fed attaches to […]
