Sunday, 25 March 2012

Wealthy hedge fund managers ignore Apple shares

Apple shares have risen 47% year to date (1 Jan to 26 March 2012) and yet the best performing hedge fund managers all of which have done over 30% (the best has done over 40%) do not hold the stock. 

Apple shares are one of the most popular holdings among fund managers and hedge fund managers alike and yet the best three performing hedge fund managers, all of whom are billionaires in their own right do not currently hold the stock. Do they know something us mortals do not?
To see where the smart (wealthy) money is invested check out this link

Why passive funds are not low risk

I have a love - hate relationship with index funds.  On the one hand with Scottish heritage I do not like paying fees and will generally object to the excessive and sometimes offensive fees charged by actively managed funds - passive funds provide a low cost alternative to actively managed funds. 

On the other side of the coin, the capitalist in me likes growing my terminal wealth.  Why would I want to maintain a long only (passive) exposure in a specific market at a time when the world is going to hell in a hand bag?  Some active managers are able to go to cash thereby protecting me as best they can against losing money. 

So how risky are passive (index) funds?  To find out open the attached link why passive funds are not low risk

Saturday, 14 January 2012

No surprise behind euro zone credit downgrades

I can not understand what has take the rating agencies so long to down grade France from AAA to AA.  The French have been on a ratings time bomb for some time and have probably the greatest exposure to toxic euro debt.

Comments by Standard and Poors focus on the insufficient initiatives taken by policy makers to address the systemic issues.  S&P also note tightening  credit conditions, increased risk premiums and weakening economic growth as contributing factors.

The oulook forAustria, Belgium, Cyprus, Estonia, Finland, France, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain are all negative indicating a one in three chance of a further ratings down grade in the next 12 to 24 months.

The outlook for Germany and Slovakia are stable S&P stated.

The Fed asleep at the wheel

The New York Times published the following article which clearly shows that in 2006 the Fed Governers had no idea what they were doing and were clearly asleep at the wheel.  Could the whole GFC have been avoided if the US was controlled by sensible and rationale Fed Reserve staff - maybe not as the problem was too systemic.   In recent days Obama has asked for a further rise in the US debt ceiling, a further indication that all is not beer and skittles in the US Government, despite corporate America showing signs of growth and profitability.

The NY Times article can be found using the following link

Thursday, 5 January 2012

What really caused the eurozone crisis?

This article was first posted on the bbc website ( and is an easy to follow summary of the cause of the eurozone crisis of 2011.

World leaders probably spent more time worrying about the eurozone crisis than anything else in 2011.
And that was in the year that featured the Arab Spring, the Japanese tsunami and the death of Osama Bin Laden. What's more, 2012 looks set to be not much different. But as eurozone governments hammer out new rules to limit their borrowing, are they missing the point of the crisis?

to read the full article click on the link below

The Fed to publish predictions

The Federal Reserve will begin later this month to publish the predictions of its senior officials about their own decisions, hoping to increase its influence over economic activity by guiding investor expectations.

To read the full article from the New York Times use the link below.