Why Some Of The World’s Biggest Funds Are Getting Slammed
Over the last several weeks Wall Street has learned a powerful and painful lesson: Sometimes nothing is safe.
Call them what you want to — Top Dogs, Smart Money, Heavyweights — these are the kings, and their castles are crumbling.
Funds that looked bulletproof are getting smoked.
Ray Dalio’s famous ‘All Weather’ fund is down 8% for the year. The top performer of 2012 is down 5.66% for the year as of last week.
Market gurus may try to make what’s happening sound complicated, but it’s really not. In fact, what’s going on can be explained in two big market and investing themes. The first theme is the overall effect of the Federal Reserve’s change in policy and what it’s doing to risk across asset classes. The second theme is an age-old debate about how people should structure their investments in general.
Posted in Events, Finance, Hedge Funds, Opinion
Tagged Business, Federal Reserve, Federal Reserve System, hedge fund, investing, Ray Dalio, smart money, Wall Street
Ray Dalio was the hedge fund world’s most successful investor in 2010 and 2011, with his $120 billion Bridgewater Associates LP. His firm invests based on his understanding of macroeconomic principles.
In his second-quarter letter , Dalio said he believed global equity markets were pricing in “fairly pessimistic” long-term earnings growth rates and the worst real earnings growth rate in 100 years, while companies still “retain plenty of ability to protect their operating margins and profitability by keeping labor costs down,” despite global financial conditions posing a headwind to top-line revenue growth. He also noted that the dividend yield of U.S. non-financial corporation is higher than U.S. government note yields for only the second time in the past 50 years, and companies had ample liquidity to cover their dividends.
Analyzed by GuruForce, these are Dalio’s biggest new stock purchases in the second quarter…
Posted in Economy, emerging market, Equity Markets, Hedge Funds
Tagged Bridgewater Associates, cliffs natural resources, dividends, emerging markets, equity markets, global equity, Google, gurufocus, Hedge Fund conference, Hedge Fund manager, Hedge Funds, honeywell international, MSCI China, Ray Dalio, stock portfolio, Stocks, undervalued stocks
Billionaire Marc Lasry, Avenue Capital Chairman, co-founder and CEO, was the guest of Bloomberg TV’s Stephanie Ruhle on “Market Makers” today. Marc Lasry has $13 billion in assets under management.
Marc Lasry doesn’t think Europe will blow up. He sees several opportunities to invest in Europe. Click on the link to watch the video.
Posted in Economy, European economy, Financial Crisis, Hedge Funds, Value Investing
Tagged Ben Mezrich, Bill Ackman, Bringing Down the House, CNBC, David Tepper, Financial Crisis, Golden Networking, happy hour, hedge fund, Hedge Funds, James Chanos, John Paulson, Maneet Ahuja, Modern Finance Report, New York Times, Ray Dalio, The Speed Traders, Unlocking the Genius of the World's Top Hedge Funds, Value Investing Tagged alpha masters
“Shorting is not a criminal trial. It doesn’t have to be beyond a reasonable doubt. There just has to be a preponderance of evidence.” — James Chanos, February 2011 interview
“We certainly weren’t the first on this idea,” Chanos tells me at his offices in April of 2011 about the biggest short position of his life: The People’s Republic of China. Chanos first spoke publicly about his grand stake in China over a year and a half ago on CNBC’s Squawk Box in December 2009. “Right now, we’re as bearish on China as we’ve ever been,” he says. He followed that with a presentation at St. Hilda’s College, Oxford in January 2010, “The China Syndrome: Warning signs ahead for the global economy.”
Chanos argued that China, fearing a sharp slowdown from the financial crisis, pumped credit into asset growth — mainly real estate but new roads and high-speed rail, too. There were “classic pockets of overheating, of overindulgence” he said in his presentation. Fixed asset investments as a percentage of China’s gross domestic product (GDP) were exceeding 50 percent — a “sh-a chén bào” (sandstorm) of money, he said. The stimulus was massive: $586 billion, or 14 percent of GDP (the U.S. package was $787 billion, or 6 percent of GDP). With state-owned enterprises controlling 50 percent of industrial assets, and not being driven by the need to make profits, and local party officials dictating the real estate development process, large-scale capital projects were growing “sillier by the day,” including rising industrial and manufacturing overcapacity. There were empty cities, such as Ordos, and lonely malls, such as the New South China Mall. News reports showed new buildings toppling from shoddy construction. It was the latest chapter in China’s history of credit-fueled booms and busts. China was “letting a thousand Dubais bloom,” he quipped. “Go to Dubai and see what happened. It was… what I call the ‘Edifice complex.'”
Posted in China, Economy, emerging market, Events, Financial Crisis, Hedge Funds, Value Investing
Tagged alpha masters, Ben Mezrich, Bill Ackman, Bringing Down the House, CNBC, David Tepper, Golden Networking, happy hour, hedge fund, James Chanos, John Paulson, Maneet Ahuja, Modern Finance Report, New York Times, Ray Dalio, The Speed Traders, Unlocking the Genius of the World's Top Hedge Funds
William Ackman’s triumph at Canadian Pacific Railway Ltd. (CP) may echo across boardrooms far from the railroad’s Calgary headquarters.
In a Canadian corporate culture long resistant to activist shareholders, the U.S. hedge-fund manager sounded a rousing wake-up call by ousting a chairman, a chief executive officer and four directors, said Karl Moore, professor of business strategy at McGill University in Montreal.
Posted in Economy, Hedge Funds, Value Investing
Tagged alpha masters, Ben Mezrich, Bill Ackman, Bringing Down the House, CNBC, David Tepper, Golden Networking, happy hour, hedge fund, John Paulson, Maneet Ahuja, Modern Finance Report, New York Times, Ray Dalio, The Speed Traders, tuesday, Unlocking the Genius of the World's Top Hedge Funds