By Chris Clair | January 26th, 2012
Posted in Reuters TV
Reuters blogger Felix Salmon meets his nemesis, hedge fund manager and philanthropist Anthony Scaramucci, in a face-to-face showdown at the Hotel Europe’s Piano Bar in Davos.
“It seems to me that any financial product which has to be sold so aggressively is … there’s something a little bit wrong with that,” Salmon says.
“You’re a financial journalist, OK? Every financial product is sold and not bought,” Scaramucci replies.
That’s about in the middle of the exchange. There’s plenty of good stuff on both ends of that, including an extended back-and-forth about this column by Salmon last November. Check it out.
By Chris Clair | January 26th, 2012
Posted in Reuters TV
Thomson Reuters Digital Editor Chrystia Freeland spoke with George Soros at the World Economic Forum in Davos, Switzerland. In a series of videos for Reuters TV, Soros discusses why his fund bought $2 billion of MF Global Italian bonds, his secret for saving Europe, an Obama-Romney election and the odds for democracy in Russia and Myanmar.
By John Kemp | January 26th, 2012
Posted in Commodities
John Kemp is a Reuters market analyst. The views expressed are his own.
E.U. sanctions on Iran’s oil exports and fears about disrupted supply lines may not have made bullish oil analysts more confident since the start of the year, but they have forced bears with below price average forecasts to scale back their estimate of downside risk.
Seven analysts have made significant changes to their forecasts for average Brent crude prices in 2012 in January compared with December, according to an analysis of the latest oil price poll published by Reuters.
Six analysts raised the predictions by $5 per barrel or more, while one cut their forecast by $8. Every one of the analysts raising their forecasts this month had previously been significantly below the median in the December poll, while the lone analyst to cut their prediction had been significantly above average.
The result is that forecast clustering has intensified. The standard deviation among institutions surveyed in November and January was around $9.25, falling to $7.50 in the January poll.
Pressure to stick close to the consensus remains fierce, but so far it is analysts with the more bearish forecasts who have been forced to come into line, while bulls stick with their earlier numbers.
Forecast clustering to this degree looks incongruous. The average change in annual Brent futures price from one year to the next since 1990 has been 23 percent. Market forecasts are converging on $107 in 2012, which is less than 4 percent away from the $111 average in 2011. So much price stability from one year to the next would be unusual.
Clustering may be an inevitable consequence of competitive pressure on analysts (it’s better to be wrong in company than on your own), as well as the unusual lack of volatility in oil markets at present and range-bound trading inside a tight $105-115 band which has not seriously been challenged since summer 2011.
In the absence of a dominant narrative, most analysts seem as uncertain about when and which way prices will break as the rest of the market, and are therefore predicting no change.
By Chris Clair | January 25th, 2012
Posted in MF Global, Video
CNBC’s Rick Santelli talks with Mark Melin, Alternative Reality contributor and editor of Opalesque Futures Intelligence, about the SEC’s role in the MF Global investigation.
Melin says the SEC knew in May that “Corzine had sovereign debt exposure and they were the only people that knew.”
Credit where credit is due, here. Janet Tavakoli was talking back in November about the fact MF Global’s leveraged default and liquidity risk exposure to European sovereign debt was disclosed in a 10-K filing with the SEC for the year ending March 21, 2011. “The CFTC and other regulators had the information right under their noses, but it appears they didn’t understand that they were looking at a leveraged credit derivative transaction that could lead to margin calls that MF Global would be unable to meet,” Tavakoli wrote on the Huffington Post.
But Melin has more.
In August, three months after the SEC received MF Global’s 10-K, there was a $300 million bond offering floated to professional investors. None of those investors were told about or knew of MF Global’s European sovereign debt exposure, Melin has written, and he reiterated the point on Wednesday [Jan. 25].
“We should have transparency,” Melin says of the role of a regulator like the SEC in the case of a bond offering like MF Global’s. “Investors should be protected by regulators.”
‘De la discussion jaillit la lumiere’ … about good discussion and foundational investments.
As stated so eloquently in our disclaimer “The Thoughtful Arbitrageur” is not an investment advisor and you should not be seeking investing advice from a blog. We are attempting to inform, sometimes amuse,and hopefully give you the benefit of our fortunate experiences. Our subject this week is Bollore Group.
Our belief is that a sound portfolio is grounded by a core of strong fundamental holdings such as Bollore. Bollore is the type of equity that can anchor a portfolio for many years. Around these investments could be an array of various strategies designed to take advantage of a particular trend. Still you must seek, and go long, keystone holdings. Just as a good wine cellar requires everyday table wines combined with the more rare harvest.
One other caveat before we move on: Our ideas may not always turn out as anticipated. Still, we believe that our thesis leading to them is always well-thought-out. A smart investor could use our concepts in three ways: Agree with it, despise it or embrace the logic and find a similar play. For example, it is akin to informing a sommelier that while you agree with his recommendation of a California Pinot Noir, you would rather choose another label. In this way, you will derive the most benefit from our private communiques.
Bollore Group was founded in 1822 and is one of the 500 largest companies in the world. The company employs over 28,000 and is listed on Euronext in Paris. It is controlled by the Bollore family and is dedicated to freight forwarding and international logistics,with a focused interest in Africa. Among its other pursuits are fuel distribution, plastics, batteries, super capacitors and electric vehicles. Bollore also manages a number of financial assets including plantations producing rubber and palm oil. Finally, the company has media, advertising and telecommunications interests. This by virtue of its 28 % stake in Havas, 29% stake in Aegis PLC,and 90% interest in Bollore Telecom, a French WiMax operator. Media, Wi-Fi and battery-powered cars are the more sensational parts of the Bollore story. Nevertheless, it is logistical services and fuel transportation, especially on the African continent, that is the raison d’ĂŞtre of Bollore. Those comprise more than 95% of its revenue base. Started in 1927, Bollore controls the largest integrated logistics network in Africa. It is present in 43 African countries, with more than 22,000 employees and 8 million-plus square meters of offices, warehouses and container yards. To say that Bollore is the heart that pumps the commercial blood throughout Africa may be an understatement. Although we love the idea of diversifying into media for the influence it affords, and electric cars as a concession to green technology, make no mistake this is a logistics play. If you agree with the notion that these folks know something about a trade that they have plied for almost 90 years, and believe in the future commercial prospects of Africa, then this is your stock.
Let’s swirl this around our glass and take a look at the overall numbers. Bollore has a quite reasonable price-to-earnings ratio in the 9 area. This compares admirably with other stocks of its kind that trade at almost double that ratio. Its price-to-book is in the 0.8 range; again, half as much as the norm. The company pays out a near 2% dividend and traded at €157.85 (about $206.21) per share as of Jan. 20, 2012. It has traded recently as high as €178 and seems to be unfairly victimized by the entire European contagion. There is quite a bit of upside. Bollore has a market capitalization near €4 billion and has a great deal of potential. You should be aware that it is very thinly traded. This is why we see it as a vastly unrecognized long-term play of the buy-and-hold category. Patience will definitely be a virtue with this investment.
We feel that given its enormous natural resources, as well as its room for growth, Africa is the financial story of the next global economic period. While Africa has experienced disturbing incidents such as the civil war in Angola, and the more recent war in Darfur, the number of armed conflicts has steadily declined. Given more prominence to political associations like the African Union, which promotes peace and advanced living conditions in the continents’ poorer countries, Africa can realize its tremendous potential. There are, of course, obvious impediments to investing in Africa, not the least of which is finding the proper vehicle. However, Bollore offers the astute investor a sensible way to enter the region.
The management story is intriguing. Through numerous holding companies, the Bollore family controls the voting power. There is certainly no agency risk in this investment, as the family’s providence is tied to your interests. Led by scion Vincent Bollore, it is leadership reminiscent of traditional European dynasties that have ruled and guided that continent for generations. Vincent Bollore has proven to be a sharp, intuitive and aggressive manager. While in some instances family leadership may be a detriment, in Bollore it is a powerful asset. He is also a comic book aficionado with an extensive collection and we like that type of whimsicality. His guidance is all the more reason to favor this pick.
Thus, our latest choice—a precious French vintage that would sit proudly in your vault: Le Group Bollore 2012 .
Au Revoir,
The Thoughtful Arbitrageur
Edward Strafaci is not an investment adviser. Nothing he writes should be construed as investment advice or an endorsement of any particular security. From time to time, a family trust with which he is associated may have positions in the securities he writes about. When it does, he will tell you. What he writes is meant to inform and in some cases to entertain and amuse. HedgeWorld’s Alternative Reality is not an investment advisory site. As a general rule you should not take investment advice from blogs, anyway. Consult a financial professional for investment advice, not a blog.
Valuation Research Corp. hired Eric Wissinger as a managing director in charge of the firm’s new office in Pittsburgh, Pa. Wissinger specializes in providing valuations for hedge funds and alternative asset firms, according to a news release from VRC. Most recently, Wissinger was co-founder, principal and managing director at Commonwealth Capital Group, where he managed a private equity fund dedicated to alternative asset investing small micro-market industrial businesses.
You’ve gotten it from everywhere else- the hot shot managers, institutional titans and talking heads on CNBC have all weighed in on where they think 2012 will take investors. Now, it’s our turn in what has become our most read newsletter – the annual Attain Capital look back/peer forward – the 2012 Managed Futures Outlook and 2011 Review. We may be a few weeks late to the party, but the wait was worth it, as the added time meant more data and more interesting conclusions overall.
If 2008 was the managed futures party year, 2009 was the “hangover”, where the big drop in volatility following the historic 2008 volatility caused managed futures losses, and 2010 the “rebound” year, where managed futures avoided putting in back to back losing years. 2011 can best be described as “a whole lot of nothing.” There were ups, there were downs, and managed futures programs tried to capitalize on both side of these moves. But in the end, none of the moves extended far enough for managed futures to profit substantially from, leaving gains here, losses there, and so on. In short, a whole lot of nothing.
What trading atmosphere generated these results? Can we expect more of the same in 2012, or will the tides turn? To find out our take on what is in store for Managed Futures in the new year, click through.
Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.
The entries on this blog are intended to further subscribers understanding, education, and – at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts.
The mention of asset class performance is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.) , and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices:Â such as survivorship and self reporting biases, and instant history.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
Career placement agency Robin Judson Partners hired Alison L. Seanor as a managing director and senior recruiter. Prior to joining Robin Judson Partners, Seanor worked for seven years at a boutique search firm. There, she specialized in recruiting investment professionals and traders, according to a news release from Robin Judson Partners.
All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of HedgeWorld content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. HedgeWorld is a registered trademarks Thomson Reuters.
