2008 Investments - Idea Sharing

[sonicdragon]

Thames River is my favorite hedge manager. I've own their Warrior fund of funds for a long time, and just recently bought the Apex credit fund and the Distressed Focus fund.

Thames River have a good name. A couple of quick questions:

- Who did you buy thru?

- Do they charge performance related fees?

- Bought through an IFA in HK (www.tyche-group.com) and held by an IOM custodian. PM me if you want contact details.

- the adviser charges 1% PA (on pf value) management fee. The custodian charges 1% PA (on investment amount)

[BEENTHEREDONETHAT]

Naams comment about "fund of funds" brought back some memories about 1970. If you are into history combined with investment scams and very large rip offs back in 1970 Barney Cornfeld set up a fund of funds that got up into the billions. He later sold it to Robert Vesco who got about 220million out of it before he blew town. Don't think he was ever caught. There was a book pubblish in the late 70's about the whole mess as I remember it was fascinating reading. Sorry I don't recall the author but think the title was "Fund of Funds". A bit off track but couldn't resist passing this on.

[Abrak]

I like silver.

It is very speculative.

There are 5 years of supply of silver in the world and 55 years of gold.

I cant help thinking that commodities are having their time and the traditional ratio of silver to gold is 30:1 implying a price of US$30 verses US$16 at the moment.

Hedge funds who are playing gold must be very tempted to move into a much more illiquid silver first.

[LivinLOS]

I was big on silver tho I think its going to get some resistance at the 20 levels.. Luckily I loaded up at 6.80 for a truckload.

I do feel its a secondary as a monetary metal tho.. However to balance that as you say theres so little of it (one hedge could do a hunt bros) and also it does have consumption / uses..

[Naam]

Naams comment about "fund of funds" brought back some memories about 1970. If you are into history combined with investment scams and very large rip offs back in 1970 Barney Cornfeld set up a fund of funds that got up into the billions.

i still remember the Cornfeld scandal because a high ranking german politician (with good chances to make it to chancellor) was involved in pushing the fund in Germany.finance wise it was of no interest to me as i had no money then

[sonicdragon]

I like silver.

It is very speculative.

There are 5 years of supply of silver in the world and 55 years of gold.

I cant help thinking that commodities are having their time and the traditional ratio of silver to gold is 30:1 implying a price of US$30 verses US$16 at the moment.

Hedge funds who are playing gold must be very tempted to move into a much more illiquid silver first.

I fully agree

[LaoPo]

Naams comment about "fund of funds" brought back some memories about 1970.

If you are into history combined with investment scams and very large rip offs back in 1970 Barney Cornfeld set up a fund of funds that got up into the billions. He later sold it to Robert Vesco who got about 220million out of it before he blew town. Don't think he was ever caught. There was a book pubblish in the late 70's about the whole mess as I remember it was fascinating reading. Sorry I don't recall the author but think the title was "Fund of Funds". A bit off track but couldn't resist passing this on.

Bernie Cornfeld died in 1995 in London

http://en.wikipedia.org/wiki/Bernard_Cornfeld

Robert Vesco, in the end, was not so lucky....he's in one of Castro's jails in Cuba*. He was sentenced to thirteen years in 1996; could be out any day now.

http://en.wikipedia.org/wiki/Robert_Vesco

* some don't believe he's in jail. Google if you're interested.

LaoPo

[BEENTHEREDONETHAT]

Thanks for that LaoPo. Those were fascinating guys. Vesco just could not pass up screwing everyone and Castro didn't take to kindly to it.

[LivinLOS]

Wasnt cornfield the one who I read the book "Do you sincerely want to be rich" ??

[fletchsmile]

From "The Independent" - UK Newspaper 26/1

The Analyst: The East has cash, the West has debt

By Mark Dampier

Saturday, 26 January 2008

I am writing this article on Wednesday, some 24 hours after the US Federal Reserve surprised the markets by cutting interest rates by 0.75 percentage points. Many commentators have suggested that this was an attempt to rescue the equity markets, but I don't actually think that is correct.

In my view, the move has much more to do with helping "monoline" insurers – these are companies that insure the debt of other companies, and they are themselves running into trouble. If they start going belly up, then we could enter a new and more dangerous leg of the credit crisis could start. In the end, the US government could have to step in as a final guarantor.

There is an awful lot of bad news already priced into the markets, so the question is how much worse things will get. I really have no idea whether we will go into recession, although a poor housing market in the US is going to be a significant drag on growth for some time.

History suggests that if the US and Europe do go into recession, then company earnings could fall by as much as 33 per cent, and stock markets usually fall by about 25 per cent during these periods.

Given that our own stock market is around 20 per cent down since its peak, we could be within around 10 per cent of the bottom. I am grateful to Julian Chillingworth, the chief investment officer at Rathbones, for these statistics.

I think the events of 2007 and so far in 2008 mark the start of a gradual shift of economic power from the West to the East. Our credit problems are home-grown, with consumers and governments alike mired in debt. It is interesting to note that central bank reserves in the US total about $55bn (£28bn), and that last year they fell by about 2.5 per cent. By contrast, the cash reserves of the Arabic Gulf States alone rose by 40 per cent last year to $1,000bn.

You might have noticed that most of the US banks (Citigroup, Merrill Lynch etc) have been bailed out by sovereign wealth funds from the developing economies. It is now the developing world that has the cash and the developed world that has the debt.

However, this kind of change brings opportunity with it. Four-fifths of the world's population lives in the developing world, and much of it is industrialising at scarcely credible rates and creating wealth along the way.

In my view, these economies are not totally "decoupled" from the US economy, but I certainly believe that they are better insulated from a US recession today than they were even a couple of years ago. I also believe that falls in these markets represent excellent entry points for long-term investors prepared to take a 10-year view on their investments.

The demand for oil will grow as Asia and other emerging markets continue to industrialise and urbanise. You simply cannot turn off major infrastructure projects overnight, and I am sure that the price of oil won't fall simply because the UK economy gets squeezed.

I wouldn't advise that you sell all your investments in Western markets, but it seems likely that 2008 will be a tough year. Interest-rate cuts alone will not solve the credit problems, and they are unlikely to fuel extra consumer spending as money will be needed to pay off debt and to pay higher fuel bills.

The long-term opportunities seem to lie in the developing world, and I have already covered some of the top funds in these pages. I would reiterate my view that the JM Finn Global Opportunities Fund is an attractive option. The manager focuses on the infrastructure projects – such as power, toll roads, rail, shipping and pipelines – that are vital for the emerging market industrial revolution to continue. This could be a profitable, if somewhat volatile, area to invest for the next 20 years.

In conclusion, I don't think that we are out of the woods yet. We can only relax when we are able to trust the banking system (and banks are able to trust each other) and we know where all the liabilities are.

So; fasten your seat belt for a bumpy ride this year, but if you focus on the long-term potential of global markets you should be able to weather the turbulence.

http://www.independent.co.uk/money/persona...ebt-774166.html

Edited January 29, 2008 by fletchsmile

[LindsayBKK]

Top 100 tips for 2008

[fletchsmile]

Follow on from the above article, as I've used this broker/discount house for 10 years+ and Mark Dampier writes some interesting stuff from a UK perspective. I also have this fund, so was interested in his views. (Fund is down about 10% YTD: but has had a very good run over 3 yrs or so...)

http://www.h-l.co.uk/fund_research/fund_re...edol/3411687.hl

JM Finn Global Opportunities

Our view on this Fund

It could be an opportune time to invest in emerging markets. Interest rates in the US have been slashed, which we believe will result in cash being put to work in the east. If Western countries descend into recession the developing world could become the market of choice for many investors. The question remains: where is the smart money going? We believe that the large scale infrastructure development of emerging markets is creating a superb investment opportunity.

Tata Motors has recently unveiled the world's cheapest production car. The Tata Nano costs just £1,300, making it affordable to middle classes from Asia to Latin America. Billions of people across these regions aspire to the luxuries that we take for granted and these things are coming within their grasp. The Tata Nano is only a small piece of the puzzle. All kinds of consumer goods and greater quantities of foodstuffs are needed for the transition of the emerging economies into a developed-world lifestyle.

None of this is possible, however, without the infrastructure to support it. Power grids and transport networks require massive investment. The companies who provide the skills and materials necessary for this development are enjoying record volumes of orders.

Opportunities abound in a wide variety of sectors and one fund that has tried to make the most of these is the JM Finn Global Opportunities Fund. Its manager Anthony Eaton has positioned the portfolio in sectors such as mining, energy, shipping, construction and agriculture in order to diversify across the whole theme. Mr Eaton seeks to gain maximum advantage by investing at each stage of a process. For example in the agriculture sector he has invested in Potash Corp (which fertilises the ground), Monsanto (which provides the seeds), Bunge Corp (which processes the grain) and Saskatchewan Wheat Pool (which trades the grain).

The success of this investment strategy has so far been spectacular. Since the launch of the fund in January 2004 it has risen by 138.1%, significantly ahead of the 54.9% rise of the sector average. It should always be remembered that with greater potential comes greater risk. Past performance is not a guide to future returns and the value of investments can fall as well as rise.

One of the beauties of this investment theme is that it is truly global. Some of the world's leading companies in these areas are based in developed markets such as the UK, US and Europe. Despite this it should be remembered that many of these opportunities depend upon emerging market growth and volatility should therefore be expected. In our opinion the (CF) JM Finn Global Opportunities Fund is a superb way to benefit from the long term growth potential of infrastructure development.

28-01-2008

Edited January 29, 2008 by fletchsmile

[fletchsmile]

Well at these levels I've picked up drip feeding money into Thailand funds again. With SET around 750, downside looks small compared to upside. i.e on a 6 months+ timeframe, I don't see it losing much more than 100, and could be up 300 or so. YTD drops make it feel more like an opportunity to buy.

In terms of Thailand, I've some of the lowest levels of THB cash I've had in about 10 years. Deposit rates are poor, and heading down. Some good opportunities on interest rates to come tho' in the mortgage market for borrowers. Thailand is now about 29% of my equity portfolio (highest ever), with about 8-9% of that held via Singapore, and the rest held here for long term.

For those living and working in Thailand like myself, I usually take out a Long Term Equity Fund at the end of the year, to get tax back in time for Xmas. As a reminder, you have to hold for 5 years, but Thai Revenue department gives you tax relief at your maximium rate. So on the max of THB 300k, you can claim up to 37% tax relief or THB 117k. For a 30% tax payer its 90k etc.

This year I'm taking mine early. Shame I can't use more, and the annual allowance is only 300k . That extra THB 300k drip fed into Thai equities therefore effectively costs nearer 200k after tax. Put another way, for someone working and living here longer term, if you're prepared to tie money up for 5 years, you could be buying the SET now at an effective cost of around 500 (2/3 of 750). Not for everyone but well worth considering...

Edited January 30, 2008 by fletchsmile

[cmsally]

Am also looking into funds to invest in within next couple of months. Anyone have any good recommendations as to what is a good buy at the moment?

[fletchsmile]

Another view on the SET. I guess that puts me more towards the optimists' ends. But there still looks more upside than downside. As it was done over the last month, I also wonder a little on its timing, and whether they have upgraded their views since. i.e was it before/after the surprise rate cuts by the FED, plus unlikely to take into consideration the last couple of days.

SET Index estimate slashed

The Securities Analysts Association (SAA) has trimmed its 2008 Stock Exchange of Thailand (SET) Index target consensus from 1,030 points to 958 in the aftermath of the US sub-prime mortgage fiasco.

Published on February 1, 2008

The consensus came from a survey of 21 foreign and local brokerage houses over the past month.

The lowest SET Index target coming from the survey was 669 points, while the highest was 1,200 points, secretary-general Sombat Narawutthichai said yesterday.

When asked about the impact of US sub-prime economic turbulence on Thailand, 67 per cent of respondents said they expected a medium impact, 19 per cent said Thailand would be hit hard and 5 per cent were more optimistic and said the impact would be minimal.

Most of the surveyed analysts said Thailand would not be directly affected by the sub-prime problems but would feel the impact through selling-off by foreign investors.

"Some analysts forecast that the SET Index might fall to 669 points in the first half of the year but would recover later, following [implementation of] the government's economic stimulus policy," Sombat said.

Political stability, greater consumer confidence, the government's economic-stimulus measures, investment in mega-projects, accelerated government spending and a downward trend in interest rates are all expected to boost the country's economy and corporate earnings growth, he said.

The latest survey also marginally trimmed the analysts' consensus estimate for growth this year in Thailand's gross domestic product from 4.9 per cent in a previous survey to 4.8 per cent. However, estimated growth in earnings per share of listed companies rose from 18.4 per cent to 18.9 per cent.

Sombat warned that fluctuations in the Thai stock market would continue over the next month or two, because a portion of fund flows would be put into bonds, which were presently offering better returns as well as lower risk.

Sombat predicts the Bank of Thailand's Monetary Policy Committee will cut its policy interest rate at its April meeting.

Amid high volatility in the stock market, analysts recommended that investors pile up dividend plays and advised that securities should not account for more than half of each individual's portfolio.

Siriporn Chanjindamanee

The Nation

Edited February 1, 2008 by fletchsmile