Financial Crisis

[churchill]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Well there are funds available that invest in gold stocks and also allow one to Hedge into SGD or Thai Baht / and I suppose this is a possible option ?

and answering my own question

"What will come of the property market ?"

Perhaps a strengthening currency and economy would encourage investors to diversify out of weakening currencies and support assets such as property in Thailand /

[Gambles]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Yes, I agree there are much better opportunities now - even if I don;t seem to be very good at explaining them to Abrak!

[Gambles]

This is why we pioneered active global diversification hedged into THB and SGD. To my mind, that should be the only game in town right now. Add the whistles & bells once the picture becomes clearer

Can you explain Gambles. It doesnt seem much of a game to me as a concept or not one to make money.

But I have never been strong on the concept of diversification as an investment strategy to start with so maybe it isnt all about making money. Diversification is a massively failed business strategy.

And it is always a little confusing to use 'diversification' and 'hedge' together as they sort of mean the same while 'hedge' as in 'hedge funds' usually means the opposite.

I mean 'pioneered active global diversification hedged' at least needs that thing you put at the end of some posts.

It sounds like a bit of a scam being 'active global diversification hedged' on the basis I see no reason to be 'active' if I am 'global diversification hedged'. 'Pioneering' the concept is not something you should be proud of. It essentially seems to amount to a 'passive' investment strategy.

Sorry if I wasn't clear

1) to my mind active global diversification of assets should be the only game in town - focusing on any one or 2 asset classes is enormously risky right now - in a time when almost anything could happen you need to be both diversified in geography, assets and investment approaches as well as agile in response to developing economic and commercial situations - e.g. investors in equities who take a long only approach need to be aware that while markets are still moving upwards, they have significant potential to correct >50% from these levels with much wider dispersion of indidvidual stock returns than last year. So we don't believe that this is an appropriate time to be focused on any individual asset class or investment approach right now and it is certainly not a time to be passive. Whatever the investment target is, the short term needs greater attention right now - when even Warren Buffett doesn't seem to believe in just buying & holding right now we don't think that anyone else should

2) the delivery of these returns needs to be actively managed from a currency perspective - just because the assets are diversified doesn't mean that the currency exposure is suitable. Dollar remains a primary currency for the majority of investments these days - a lot of non-US$ denominated investments still being largely influenced by US$. Therefore the returns from the underlying assets need to be currency hegded into the investor's relevant currency(ies) and those currencies that offer the greatest prospects for appreciation. The Dollar may soften in coming days (or not) but, on the balance of probabilities looks to be stronger through 2010, but going forwards Asian currencies look the best bet. If you live in Asia and Asian currencies are your relevant currencies and if these currencies run the risk of strengthening you need to currency hedge your underlying returns into these currencies. As Herr Naam pointed out, the asset pool available in SGD and THB is very limited but that is no longer such a great issue if you can take the return stream from global assets and hedge that into THB or SGD - as Churchill hints at about gold - imagine during calendar year 2011 Gold moves from US$ 1000 to $ 1500 per oz but $ moves from say 35 to 25 against the Baht (these are realistic examples more than specific predictions)

If you don't currency hedge your gold then it moves from THB 35,000 to THB 37,500

However if you do, as you now can, hedge the currency the value of your investment moves from THB35,000 to THB52,500

That is a very simple example but I want to try to explain a little more clearly than I have in earlier posts

Abrak, does that help? Apologies if previous post wasn't as clear.

cheers,

Paul

[Gambles]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Well there are funds available that invest in gold stocks and also allow one to Hedge into SGD or Thai Baht / and I suppose this is a possible option ?

and answering my own question

"What will come of the property market ?"

Perhaps a strengthening currency and economy would encourage investors to diversify out of weakening currencies and support assets such as property in Thailand /

see my earlier post - if anything

1) the fact that THB investors can now invest globally and hedge to THB

2) a strengthening currency making local assets more expensive to international buyers

should actually reduce capital inflows/demand for local assets

Over time this will start to reduce currency appreciation but Baht is such a small illiquid currency in terms of traded volumes that it doesn't take much to influence it either way.

The main issues are that the fundamentally Baht is strong, the economy has been well managed from a PoV of avoiding excesses and that there is no great debt burden (unless the powers that be go and do something stupid - no signs of that yet).

Hence Churchill's buy gold and hedge to Baht could be a good way forwards, whereas Sokal's restrict yourself to local assets is where we've been restricted to before....

[Gambles]

and finally - we've co-sponsored this report; if anyone wants a copy or wants to be my guest on Tuesday evening, do let me know:

Best regards,

Paul

23/3 - BCCT EVENING PRESENTATION

SPONSORED BY BAKER TILLY CORPORATE ADVISORY SERVICES (THAILAND) LTD

Guest speaker: MR. JOHN SHEEHAN, Principal of Global Markets Asia

Topic: 'The Eye of the Storm: Where Do You Run?'

on Tuesday 23rd March 2010 from 6.30-8.00 pm

at Bangkok Club, Grand Hall, 28th Floor (Sathorn City Tower, 175 South Sathorn Road. BTS is Chong Nonsri)

For a decade John Sheehan followed financial crisis around the world across 20 countries with former US investment bank Lehman Brothers specialising in the purchase of distressed bank loan portfolios. Increasingly concerned with the perilous state of the banking sector in 2008, John left Lehman one month before they went bankrupt. He established Global Markets Asia in Bangkok, in order to provide Asian businesses and institutions with a better informed view of what is really going on in the world and how this will impact their commercial future. Since then John's views have been widely published throughout the Asian press and have drawn attention from international media and television.

This presentation includes the following:

- The fundamental flaw in the western democratic model that is dragging down global markets and will ultimately make us all poorer.

- How western government is playing dangerous games with the markets in order to cover-up the true extent of their own ineffectiveness.

- By their own admission, the management strategy for US "recovery" is purely "seat of the pants" and no-one in charge has any real idea of what will happen next.

- The massive problems in the US will be counterbalanced in the short-term when other regions fail, but this is merely postponing the inevitable demise of the US.

- The increasing likelihood of the Eurozone disintegrating.

Geopolitical risk and economic tension caused by war in the middle-east.

- We are not yet fully into this crisis- the full effect has yet to be seen and is still spreading- who will be the next casualties?

[churchill]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Well there are funds available that invest in gold stocks and also allow one to Hedge into SGD or Thai Baht / and I suppose this is a possible option ?

and answering my own question

"What will come of the property market ?"

Perhaps a strengthening currency and economy would encourage investors to diversify out of weakening currencies and support assets such as property in Thailand /

see my earlier post - if anything

1) the fact that THB investors can now invest globally and hedge to THB

2) a strengthening currency making local assets more expensive to international buyers

should actually reduce capital inflows/demand for local assets

Over time this will start to reduce currency appreciation but Baht is such a small illiquid currency in terms of traded volumes that it doesn't take much to influence it either way.

The main issues are that the fundamentally Baht is strong, the economy has been well managed from a PoV of avoiding excesses and that there is no great debt burden (unless the powers that be go and do something stupid - no signs of that yet).

Hence Churchill's buy gold and hedge to Baht could be a good way forwards, whereas Sokal's restrict yourself to local assets is where we've been restricted to before....

"2) a strengthening currency making local assets more expensive to international buyers

should actually reduce capital inflows/demand for local assets"

Are you sure ? I would have thought those with a falling currency would want to protect their assets and so are more likely to invest in countries / property with rising currencies ?

[Abrak]

1) to my mind active global diversification of assets should be the only game in town.

To be honest Gambles I sort of got the idea but I dont believe in that as an investment strategy myself and certainly I dont believe it is the only game in town or the best one or a particularly profitable one for two reasons.

1) Maybe a little spurious. But risk adjusted asset returns over several different classes in many geographical regions should produce fairly identical risk adjusted returns over time. If you are just trying to achieve maximum diversification and hence relatively risk resistant global average asset returns you might as well be passive. It seems unlikely that anyone knows enough about every thing that he can justify a fee for average outperformance of a globally diversified portfolio of diversified assets.

2) In my experience (and it really only is that) investors who understand a particular asset class really well can consistently make excess returns in that class and fairly significant ones. I just dont believe you can be a jack of all trades in the investment world (unless maybe you are a chartist.) Knowing a little bit about everything isnt going to get you far. I also dont really think anyone should have more than about 10 decent sized investments and that when you find really good investments there is often virtually no significant risk. I see diversification largely as dilution of investment returns.

I see it as more a popular fund management philosophy rather than a particularly good investment strategy.

[churchill]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Yes, I agree there are much better opportunities now - even if I don;t seem to be very good at explaining them to Abrak!

Yes please expand and let us know where - with performance over the last 3 ? months in hedged and unhedged currencies

[Naam]

mistake!

Edited March 21, 2010 by Naam

[Gambles]

"2) a strengthening currency making local assets more expensive to international buyers

should actually reduce capital inflows/demand for local assets"

Are you sure ? I would have thought those with a falling currency would want to protect their assets and so are more likely to invest in countries / property with rising currencies ?

Logical assumption but remember this is the new normal when greater leverage is no longer automatically a good thing (actually a very bad thing) and therefore the main economic strength will reside with the surplus economies - I just don't see that there is going to enough astute, focused global liquidity in the aftermath of the next series of crashes to get into this in a meaningful way at the outset - I think that what you're describing, to the extent that it can occur, is more likely to be phase 2 once the local asset and currency rallies are significantly underway, but by that time much of the value will have already dissipated....so at that point there wil be some money chasing the rally but from the PoV of the investors too little and too late - admittedly it doesn't take much to move a small market like Thailand, but in short, I would guess that the west will initially have its plate full with its own problems and that by the time it wakes up, the S E Asian train will have left the station and that the available and ready capital, at that time, willing to pay what by then might be a significant premium for Asian assets, will be somewhat limited.

Don't forget that not everyone has the luxury of being able to see the world the way that we can from our perspective here in Asia.

[Naam]

I would guess that the west will initially have its plate full with its own problems and that by the time it wakes up, the S E Asian train will have left the station and that the available and ready capital, at that time, willing to pay what by then might be a significant premium for Asian assets, will be somewhat limited.

Don't forget that not everyone has the luxury of being able to see the world the way that we can from our perspective here in Asia.

true! the investors in the "west" are complete dummies and have no idea of the global economic picture and the opportunities in Asia, whereas we clever ones, living in Asia, ingest asian wisdom not with spoons but with big ladles...

do you have it one size smaller Gambles?

[Gambles]

To be honest Gambles I sort of got the idea but I dont believe in that as an investment strategy myself and certainly I dont believe it is the only game in town or the best one or a particularly profitable one for two reasons.

1) Maybe a little spurious. But risk adjusted asset returns over several different classes in many geographical regions should produce fairly identical risk adjusted returns over time. If you are just trying to achieve maximum diversification and hence relatively risk resistant global average asset returns you might as well be passive. It seems unlikely that anyone knows enough about every thing that he can justify a fee for average outperformance of a globally diversified portfolio of diversified assets.

Over time perhaps but what timescales do you have in mind - the ultimate mean variation of asset classes can take longer than an investment lifetime in many cases. While I very much believe in investing for the long term, the long term is a series of connected short terms - every day, week, month, year and decade produces its own opportunity and risk set- fail to understand that and you're missing out on what the most reliable studies quanify as the source of over 90% of portfolio returns. It's the least 'sexy' part to describe and the hardest to easily explain - I do have a raft of reading and presentations on the subject but a good starting place is the work of Brinson, Hood & Beebower, and of Ibbotson & Kaplan. Also Bekkers, Doeswick & Lam updated this in a more meaningful sample last year. If risk-adjusted returns are important, active, multi-asset portfolio allocation is the key driver. At times like now it should be, for most of the investors I know, the only serious game in town. I agree that it is of extremely limited relevance to speculators or traders but my focus is generally limited to wealth protection and accumulation, so on the speculative side I don;t really know enough to comment.

2) In my experience (and it really only is that) investors who understand a particular asset class really well can consistently make excess returns in that class and fairly significant ones. I just dont believe you can be a jack of all trades in the investment world (unless maybe you are a chartist.) Knowing a little bit about everything isnt going to get you far. I also dont really think anyone should have more than about 10 decent sized investments and that when you find really good investments there is often virtually no significant risk. I see diversification largely as dilution of investment returns.

I see it as more a popular fund management philosophy rather than a particularly good investment strategy.

I think that's a dangerously limited sample - again I'm sure that you'll find plenty to chew over in the works that I suggest (if of course you're not already familiar). The bottom lines have been so far

No one asset class out performs every year

Some asset correlations are more consistent than others

Risk varies throughout the investment cycle

Asset selection (i.e. the guys adding alpha in sectors that they know best) have little impact on risk-adjusted overall portfolio returns at specific times, relative to asset allocation.

If you made money in 2008 (as the best allocators did) then you stand a chance going forwards - if you lost money in 2008, you should be asking a lot of questions about your entire methodology. 2008 was a great examination - 2 groups did well, active diversifiers and the lucky. As long as both are able to repeat their success in the future, that's fine but I choose the active diversifiers because I don't believe in trusting to luck.

Portfolio allocation is a highly specialized skill and there are a limited number of consistently strong performers in this area check out the ARC Indices for proof of this but just because the bathwater is getting a bit dirty, don't throw out the baby....

Don't you think that everyone is looking for really good investments with "virtually no significant risk" ?? This is why it's so hard to add value at the micro level these days and that the focus needs to shift more to the portfolio level - however as an industry we have to hold our hands up - there are thousands of capable fund managers specialising in individual assets so we get them to beauty parade all the time and try to sell their skills even though these aren't relevant because it's an easy way for fund management cos to make profits. Yet we don't promote the important message of portfolio allocation because there are a handful of really talented exponents, it's harder to explain and it's harder for banks and fund management houses to monetise. And yet look at 5, 10, 15 years, surprise, surprise it's generally only the portfolio allocators who have the only decent risk-adjusted returns.....

The approach that you describe, Abrak, is what will cause many investors to lose 50% or more of their investments over the next few years - that risk-reward might just about be justifiable for some people (when started in this industry it was all I knew) but knowing now that there are alternatives I couldn't sleep at night unless I did everything I could to promote the multi-asset, active portfolio allocation story. We primarily use Miton-Optimal, but CF Ruffer also do a great job.

Even if you don't like me or what I write, do yourself a favour and try to quantify the risk and reward for this approach. Actively-managed diversification, whether you do it yourself or find one of the handful who do it really well, is, believe me, the only game in town for serious wealth preservation and accumulation right now. When risks are so high it is financial suicide not to diversify or at the very, very least quantify and fully understand your risk.

At the rsk of repeating myself, If you made money in 2008 (as the best allocators did) then you stand a chance going forwards........

[Gambles]

I would guess that the west will initially have its plate full with its own problems and that by the time it wakes up, the S E Asian train will have left the station and that the available and ready capital, at that time, willing to pay what by then might be a significant premium for Asian assets, will be somewhat limited.

Don't forget that not everyone has the luxury of being able to see the world the way that we can from our perspective here in Asia.

true! the investors in the "west" are complete dummies and have no idea of the global economic picture and the opportunities in Asia, whereas we clever ones, living in Asia, ingest asian wisdom not with spoons but with big ladles...

do you have it one size smaller Gambles?

Now, now Herr Naam - that's not what I said. But just take a look at how much UK pension funds invest in UK equities and GILTS, look at how much of US portfolios consist of domestic assets - these investors are inevitably much more focused on what they see every day than what we see every day....I'm simply saying, in specific response to Chuchill's question, please try to understand how everyone's different perspectives are shaped - Baht is of course a totally different risk to someone planning to live the rest of their days in Barnsley or Alabama than in Khon Kaen.....

[Gambles]

For those that can - to switch from USD and GBP to SGD or Thai Baht - but where to invest in those currencies , stocks ? and not everyone has that flexibility with their pensions . Can one invest for instance in Gold Shares in SGD or Thai Baht ?

Churchill, reading your question i can only shake my head

the same goes for Sokal's "Switching to SGD is a good idea. Just open a brokerage account in SGD. Singapore and Thailand have lots of good RIETS and dividend paying stocks to invest in."

Yes, I agree there are much better opportunities now - even if I don't seem to be very good at explaining them to Abrak!

Yes please expand and let us know where - with performance over the last 3 ? months in hedged and unhedged currencies

3 months is very short term but generally globally diversified assets hedged into Dollar have done well for most investors in the last 3 months - a gain of just under 0.5% in Dollars has translated very nicely into Euros, Aud and GBP

Also a fixed annualised return of over 6% in Baht income funds has translated well into almost all major currencies as well.....

Buying individual stocks or asset classes is a huge risk right now - we expect certain assets to be very strong for the next few months but these are the risk assets with most to lose in a correction so beware of picking up pennies in front of bulldozers....

[Naam]

I would guess that the west will initially have its plate full with its own problems and that by the time it wakes up, the S E Asian train will have left the station and that the available and ready capital, at that time, willing to pay what by then might be a significant premium for Asian assets, will be somewhat limited.

Don't forget that not everyone has the luxury of being able to see the world the way that we can from our perspective here in Asia.

true! the investors in the "west" are complete dummies and have no idea of the global economic picture and the opportunities in Asia, whereas we clever ones, living in Asia, ingest asian wisdom not with spoons but with big ladles...

do you have it one size smaller Gambles?

Now, now Herr Naam - that's not what I said. But just take a look at how much UK pension funds invest in UK equities and GILTS, look at how much of US portfolios consist of domestic assets - these investors are inevitably much more focused on what they see every day than what we see every day....I'm simply saying, in specific response to Chuchill's question, please try to understand how everyone's different perspectives are shaped - Baht is of course a totally different risk to someone planning to live the rest of their days in Barnsley or Alabama than in Khon Kaen.....

seen from my point of view that is exactly what you said. of course any pension fund is concentrated on domestic assets and government bonds and focussed on extremely long term views and expectations. also these funds are bound to follow established rules and regulations. US portfolios (assuming that something like "US portfolios" exist) traditionally concentrate on domestic assets because the U.S. is undeniably the Greatest Nation™ and the center of this planet

my "doubts" are based on my personal experience and involvement in Asia (long before i decided to settle down her), the "western" investors i know and last not least the "western" bankers in Asia who manage billions of "western" money. all of us are since many years involved in asian investments which did not fare one iota better than investments in other emerging regions.

referring to Churchill's question. he is trying to figure out how to square a circle but merely based on assumptions (goldmines>SGD>THB). would i want to comment on this undertaking or your subtle advice to hedge? the answer is "no".

[Abrak]

Gambles,

You are again taking a fund management approach to investment strategy. If you run a US$2bn fund I would agree it is extremely difficult to add much value through asset selection compared to asset allocation. If you say manage US$10m of personal wealth it is incredibly easy. Individual investors have a massive competitive advantage over large fund management Groups. Can you really argue that buying stocks on 2x earnings trading at half BV is an investment strategy that is likely to lose 50% of your money. I see it as a low risk way of guaranteeing excess returns. One stock I own was trading at 0.7 last year (I didnt buy there of course) and will make Bt1.5 eps this year and another trading below 10 made 10 EPS last year. The problem with the US$1bn fund is that he couldnt buy more than a US$1m and it could go up 5x and it wouldnt register as any performance. And it is exactly these funds who say through redemptions usually at the bottom of the market that cause such totally ridiculous valuations.

Conceptually, I believe that it has to be so much easier to add more value at the micro level for a small investor. Say gold has a 10 million investors looking at it - I find it extremely difficult how any one investor can add much value at all (to be honest I have never worked out how the entire 10m know how to value it). I mean rational expectations (not that investors are rational) would say price movements (with a degree of perfect information between the 10m of them) should only be affected by unknown future events. Now say the Thai stockmarket which had a market capitalization of US$15bn at its lows is simply too small for fund managers to hold a single stock and if you go to see a company that hasnt been visited by a fund manager or analyst for three years, I would have thought if someone is not entirely brain dead he should be able to add value. So it really has to be much easier to add value in by looking into 500 individual stocks (asset selection) than working out whether the entire market will go up or down (asset allocation.) When a fund manager asks you whether he should buy BBL or PTT because they are the only 2 stocks in the market that he can put US$20m into which is still less than 1% of his portfolio, obviously it is pretty hard for him to make money through asset selection.

And when you say everyone is looking at good value buys please note is interested in precisely 2 stocks. Asset allocation by definition determines fund management performance because asset selection cannot

The other reason I am pretty confident that this is true is that I have made possibly the worst asset allocation that is conceivable on this planet. Namely I invest in a market that has risen 20% in 18 years and which peaked at over double current levels 16 years ago in January 1994. I mean I actually find it almost inconceivable that any fund management Group in the entire world has made an asset allocation decision worse than that. Yet I have made money every year (except one) and my average returns are substantially in excess of 20% p.a.

To be honest, the only way I can really think of making money in asset allocation is usually by betting against Central Banks who are making investment decisions whereby they are intentionally losing money in one asset for macro benefits for the economy. Clearly if they are intentionally trying to lose money, it is rather rude not to take advantage of it.

Anyway I am up 48% so far this year, how are you guys doing?

Edited March 22, 2010 by Abrak

[Abrak]

true! the investors in the "west" are complete dummies and have no idea of the global economic picture and the opportunities in Asia, whereas we clever ones, living in Asia, ingest asian wisdom not with spoons but with big ladles...

One of the reasons that Asia is a good place to invest is that the retail community tend to be inveterate gamblers and are totally disinterested in actually investing at all. They just like to buy and sell stocks based on voodoo, the local lottery result, Chinese soothsayers but mostly because they think it is going up (preferably within the next 2 hours.)

[Naam]

Anyway I am up 48% so far this year, how are you guys doing?

i am up a pittance since jan 1st. a mere 15.4%, which pays for dog food and some of my pocket money

[Abrak]

Anyway I am up 48% so far this year, how are you guys doing?

i am up a pittance since jan 1st. a mere 15.4%, which pays for dog food and some of my pocket money

Well to be fair, I was only talking about my stock portfolio - once I include all my Thai properties (up hopefully 0%), quite a lot of worthless fiat, shiny baubles etc, I doubt mine is really any higher. Still I am sure you will agree that you can make decent returns out of asset 'selection'. Sometimes prices are just so ludicrous that you really need to be incredibly unlucky not to double your money.

[jcon]

Ok, I'll say it: Gambles, I had the gut instinct from way back, when I asked you how many times you had blown out.

Now this is not meant to insult nor to flame, but I still have that gut feeling about you - maybe because I was a market maker and we made fun of you types. Maybe because you sound like a used-car salesman version of Abrak, maybe because your handle is "Gambles" but you claim to be an "advisor" for people's money, maybe because you're just a super-duper nice guy. So that I can push that gut feeling back down a bit, please tell me that your beloved dead dog was named "Gambles" and your handle is to honor him.

Advise on, my friend - I hope you're not trying to drum up business around here, though.

ok, see I put a smiley on there so everything is ok.

*I agree with Abrak's post #6307, and I believe that strategy to applicable in a thread like this, where most (if not all) of us are not pushing funds or their strategies.

[jazzbo]

from a 03 MAR 2005 New York Times profile on the billionaire hedge fund manager Steven A. Cohen (SAC)

Part of what makes Mr. Cohen such an accomplished trader is his equanimity. He rarely shouts or yells, just processes information and marshals his order flow to the 70 portfolio managers who work with him.

People who have seen him trade say it is impossible to tell whether he is having the best or the worst day of his life at any given moment in the course of a day...

''Steve is so good because he does not have his ego tied up in each trade,'' said George Fox, a longtime investor in Mr. Cohen's funds. ''He is an anomaly in this business because he hasn't had three good years, he has had 23 good years.''

... up 48% so far this year you say? how utterly boorish.

[Naam]

Anyway I am up 48% so far this year, how are you guys doing?

i am up a pittance since jan 1st. a mere 15.4%, which pays for dog food and some of my pocket money

Well to be fair, I was only talking about my stock portfolio - once I include all my Thai properties (up hopefully 0%), quite a lot of worthless fiat, shiny baubles etc, I doubt mine is really any higher. Still I am sure you will agree that you can make decent returns out of asset 'selection'. Sometimes prices are just so ludicrous that you really need to be incredibly unlucky not to double your money.

but that does not happen very often

[Abrak]

maybe because I was a market maker and we made fun of you types.

Come on JCon, if you were a market maker you always made fun of absolutely everyone because you knew there was no other job in the world that paid so much for doing so little.

[jcon]

maybe because I was a market maker and we made fun of you types.

Come on JCon, if you were a market maker you always made fun of absolutely everyone because you knew there was no other job in the world that paid so much for doing so little.

Touche Abrak! I didn't make that much, though.... 50% of all profits to the boss hurts.

To Gambles: Sorry. My post came off a bit too strong, and it's too late for me to edit. I read your contributions to the forum, though I may not agree with them.

jazzbo: I agree the baddest ass traders don't say much. Just like anything else in life, really. Though I don't think Abrak was trying to show off, he was just trying to make a point.

[Abrak]

but that does not happen very often

I agree. But it sort of explains my underlying dislike of diversification. I actually believe one key to investment success is 'conviction'. On those few occasions you find something really good then make a big bet on it. Why have 30 investments - just have 6-7 that you really believe in and really know well.

[jazzbo]

The ... how are you guys doing? is strictly schoolboy stuff.

[Abrak]

jazzbo: I agree the baddest ass traders don't say much. Just like anything else in life, really. Though I don't think Abrak was trying to show off, he was just trying to make a point.

I agree that talking about investment returns out of the air is pretty crap but I was a little pissed at the couldnt sleep at night without my strategy, yours is a recipe to lose 50%, go and look at the risk rewards.

I will show you exactly why. Flying once accused me of never making an investment recommendation true, I said noone would actually be interested and we were both right.

So here.... http://www.thaivisa.com/forum/Dividend-Gro...48#entry3343248

Now on the day I posted that 5 weeks ago STA was trading at Bt25. It reported annual earnings of Bt11 and a dividend of Bt3. Its BV is Bt33. Now in my view that is virtually no risk with very high returns. It has gone up 40% since but it isnt that surprising and still looks cheap. And the real rub is that at Bt25 it looks great but 12 months ago it was Bt8 on a PE of 0.8x current year earnings and 20% of BV. Of course I didnt buy it then though.

There is in my opinion no possible asset allocation decision you can find globally that would have that sort of risk reward ratio at any time (possibly apart from shorting the baht in 1997). Any 8% allocation of your portfolio to yen for instance seems meaningless to me.

If you had found it at Bt8 you could basically put in US$1m and sleep well knowing that you dont have to work for the next 5 years. So to claim that micro has no value added cos everyone is looking for value stocks. And claiming that active diversified global asset allocation is a specialized business with more value added seems quite something when every fund management Group and every broker has teams of people allocated to it. To be honest matching assets and liabilities, risk allocating assets I would have thought is best done by the individual.

And this is not about being clever. An IQ of 60 or above should do. The other stock didnt so well (up 15%) but it was Bt5.25 5 weeks ago and a year ago it was Bt0.7 and it is going to make Bt1.2 EPS this year (and no of course I didnt spot it at Bt0.7.) But I did read an industrial mag where the MD said the company was going to make EPS Bt1 in 2010 while the stock was trading at Bt1.8. So I guess an ability to read is a minimum qualification.

The good news is that all those analysts and fund managers are so busy pushing money around globally into all sorts of asset classes, concentrating on the top 20 stocks in a market of 500 that nobody does anything else. BTW I am not really criticizing the industry, I was a broker and it pays extremely and we help JCON front run the clients and make a ton (only joking JCON.)

[12DrinkMore]

Fantastic news from the UK! After a series of New Records, Labour have managed to deliver another one!

Government spending accounts for more than half of the economy for the first time on record after substantial public sector growth under Labour.

:D

http://www.telegraph.co.uk/news/newstopics...e-spending.html

The figures mark an important turning point for Britain, which historically has prided itself on being a nation of private enterprise and endeavour.

They do not include the costs of part-nationalising failing banks — which could push the levels close to that of communist countries.

Henrik Braconier, who studies Britain for the OECD, said the figures “definitely” signified that something was wrong in the economy.

“This won’t go away by itself,” he said. “There need to be cuts in expenditure or rises in tax to balance this situation over the longer term.”

:D

But my oh my, more taxes, he reckons?

New analysis released yesterday showed that Britain already has the highest income tax rates in the G8 group of the world’s biggest economies. Overall, the average Briton now pays twice as much tax as when Labour came to power.

Can't be much blood left to squeeze out of the UK tax payer.....

Maybe its time to turn to the "No Money Men", bartering. Although I am not sure that they would have such a fun time in Pattaya.....

http://greenexplorer.ovi.com/getinspired/e...e-no-money-men/

[Naam]

but that does not happen very often

I agree. But it sort of explains my underlying dislike of diversification. I actually believe one key to investment success is 'conviction'. On those few occasions you find something really good then make a big bet on it. Why have 30 investments - just have 6-7 that you really believe in and really know well.

i admit there was a time when i thought being extremely diversified is the non-plus-ultra of investing. the results were a boring time and mediocre yields. presently i am still moderately diversified, 16 positions in three asset classes, as i am not willing to stare ten or more hours at three screens daily. actually the afore-mentioned 16 positions are all in one asset class, namely bonds. my diversification is limited to bonds (AAA debtors) and cash in various currencies, a few high yield / high risk bonds and the basis consists of 6 of my beloved subordinates.

[Abrak]

i admit there was a time when i thought being extremely diversified is the non-plus-ultra of investing. the results were a boring time and mediocre yields. presently i am still moderately diversified, 16 positions in three asset classes, as i am not willing to stare ten or more hours at three screens daily. actually the afore-mentioned 16 positions are all in one asset class, namely bonds. my diversification is limited to bonds (AAA debtors) and cash in various currencies, a few high yield / high risk bonds and the basis consists of 6 of my beloved subordinates.

I find the idea of owning a AAA rate bond totally horrific plus it is a sign that you have far to much money in the first place. But I do think knowing one asset class really really well is key because the best returns are always somewhere at the margin. I remember looking at that Sukuk in Dubai - it looked a good speculative punt but you dont really make money that way while you knew of a good -10/+60 side bet - that was the trade.