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Decoupling: The Myth and The Mystery PDF Print E-mail
Written by Bryan Goh   
Thursday, 02 July 2009 06:51

In emerging markets, something bad happens every 3 to 4 years, and something very bad happens every 7 to 8 years. Bad things tend to happen when periods of high growth store up imbalances which accumulate till breaking point or hide fundamental structural flaws. More often than not, they are borne from lack of diversification or hedging of risk; or the distortion of the price mechanism and deviations from free markets.

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Don't believe the China lies. PDF Print E-mail
Written by Roundtripper   
Monday, 29 June 2009 04:42

Much has been said about China saving the world from economic armageddon. Well I have news for the China bulls, the macro-economic data that you are pinning your investment hopes on are no where near as good as you think. In fact they are probably quite far off the mark.

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China's security on commodity supply PDF Print E-mail
Written by Marks@Tiburon   
Wednesday, 24 June 2009 05:17

The politicians in Canberra are probably as popular in Beijing at the moment as Gordon Ramsay is in Australian news studios. Having rebuffed the bid for Ozminerals’ Prominent Hill, they will also be held culpable in Chinese eyes for Rio’s (partially) commercially driven snub to Chinalco, which was then made much worse by the announcement of the Rio/BHP iron ore joint venture, neatly creating a duopoly from the prior three player market. 

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Efficient market theory - RIP PDF Print E-mail
Written by Marks@Tiburon   
Monday, 22 June 2009 16:32

After five decades, the Institute for Financial Analysis has polled its members, who now no longer believe in efficient markets – or, more specifically, that share prices do not reflect all available information.

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Temasek Holdings Investment Performance and Transparency PDF Print E-mail
Written by Bryan Goh   
Tuesday, 16 June 2009 02:41

On 8 June, I wrote in the Straits Times, a newspaper in Singapore that Temasek Holdings should not shy away from risk despite recent losses. Here is the article: 

Last Updated on Tuesday, 16 June 2009 02:45
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India PDF Print E-mail
Written by Marks@Tiburon   
Saturday, 13 June 2009 10:59

Five years ago India had an election. There was a surprise victory for the Congress-led coalition over the BJP and the market fell 20% in a day. This marked the low and the market subsequently quadrupled over the next three and a half years. As it turned out the effect of having to accommodate some of the left-leaning coalition partners on economic policy was somewhere between immaterial and zero.

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What Do Hedge Fund Investors Want? June 2009 PDF Print E-mail
Written by Bryan Goh   
Thursday, 11 June 2009 07:53

Although I have never been a marketer, and am firmly on the buy side, being part of First Avenue Partners, effectively a marketing firm active in hedge funds, private equity and real estate, as well as a hedge fund seeder, gives me a very interesting view on what investors want. Being responsible for due diligence and manager selection for the hedge fund practice, I spend most of my time looking at the hedge fund industry, but I also keep track on the private equity and real estate fund management industry as there are often interesting overlaps.

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A Renaissance For The Hedge Fund Industry PDF Print E-mail
Written by Bryan Goh   
Thursday, 04 June 2009 18:22

The month of June is replete with hedge fund conferences. Conferences earlier this year were either poorly attended, or else investors attended them for the free breakfast or lunch, a chance to commiserate with fellow sufferers of the global financial crisis/hedge fund witch hunt. What a difference a couple of months of rising markets make. A palpable optimism is creeping back into the industry.

Last Updated on Friday, 05 June 2009 16:04
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Wow, there really are more suckers....at least in Asia anyway. PDF Print E-mail
Written by Roundtripper   
Monday, 01 June 2009 07:30

Two weeks have gone and the bullish sentiment persists. Although US markets have technically gone nowhere, the Dow has range traded between 8,200 - 8,500 and the SPY at 900-920, Asian markets have taken the glass is half full mentality by the horns, rising when there is good news out of the US and not falling on bad news. 

Last Updated on Tuesday, 02 June 2009 05:29
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Capitalism 2.0 : Convexity. PDF Print E-mail
Written by Bryan Goh   
Wednesday, 27 May 2009 12:06

Should not a capitalist system punish as well as reward? We saw the devastation left by Lehman when it filed and concluded that some banks are too big or too interconnected to fail. 

Last Updated on Tuesday, 02 June 2009 05:31
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The next leg down in Asia? PDF Print E-mail
Written by Marks@Tiburon   
Saturday, 16 May 2009 01:57

“I like Asia.  You don’t have to sell me the story but I’m going to wait until the next leg down before making any allocation”.

Last Updated on Tuesday, 02 June 2009 05:33
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Reducing beta in Asia but still money to be made PDF Print E-mail
Written by Marks@Tiburon   
Monday, 11 May 2009 17:36

‘Reduce beta in May and go away’ may not have quite the lyrical simplicity of the original old market adage, but may well prove to be appropriate this year.

Last Updated on Tuesday, 02 June 2009 05:35
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Hedge Funds, State of the Craft, 2009 05 PDF Print E-mail
Written by Bryan Goh   
Thursday, 07 May 2009 15:39

Its time for another review of the State of the Craft. Is it going to be easier to make money? Is it going to be harder to make money? Where was money made? Where was it lost? What are investors looking for? What have investors done?

Last Updated on Tuesday, 02 June 2009 05:37
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Credit Markets, How Worried Should We Be? PDF Print E-mail
Written by Bryan Goh   
Sunday, 03 May 2009 06:57
My colleague Oliver Bergmann who heads up our hedge fund incubation business and I were discussing how the world of credit spiralled so quickly out of control. He sent me the following article by David Merkel who writes a very interesting blog called The Aleph Blog (www.alephblog.com).
Last Updated on Tuesday, 02 June 2009 05:38
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Fundamental Investing In 2009: Will it work? PDF Print E-mail
Written by Bryan Goh   
Thursday, 23 April 2009 11:52

The innovation that was accused of being a New Paradigm in the late 1990’s in the wake of the Internet boom and subsequent bust brought amongst other things the concept of Just-In-Time management of inventory and production processes.

Last Updated on Tuesday, 02 June 2009 05:39
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Some Macro Strategies June 2009 PDF Print E-mail
Written by Bryan Goh   
Tuesday, 30 June 2009 04:18

Part of the recovery and healing process of the world economy will involve an evolution of the trade positions of countries. As profligate nations save and emerging market consumers expand, Western trade deficits and emerging market trade surpluses are likely to contract towards balance. The transactional demand for currency will likely support the USD and EUR while CNY, JPY, KRW, INR weaken. 

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The End of This Equity Market Rally PDF Print E-mail
Written by Bryan Goh   
Thursday, 25 June 2009 10:32

I am not an equity market bear; if anything I am firmly of the view that the world economy is on the path of recovery and repair. Equity markets have, however, run well ahead of themselves and of fundamentals. Technically, equities are heavily overbought. Fundamentally, they are not cheap either. In an earlier article dated 15 June 2009, I suggested that This Equity Market Rally had run out of steam and that a significant correction was probable. 

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The Unobservable Economic Recovery PDF Print E-mail
Written by Bryan Goh   
Wednesday, 24 June 2009 05:08

The rally in global equity markets masks the fact that economic fundamentals remain weak. The bulls say that the recovery is underway, that green shoots of economic recovery are sprouting, that economies have passed their trough; some even go as far as to suggest a V shaped recovery (Goldman Sachs is one of them). 

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Your last chance to sell..Dow 5,000 by year end? PDF Print E-mail
Written by Roundtripper   
Thursday, 18 June 2009 02:43

As mentioned in my last post, there are signs that the mini bull market in the bear storm is about to come to an end. 

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This Equity Market Rally PDF Print E-mail
Written by Bryan Goh   
Monday, 15 June 2009 09:42

Markets rarely ever move in straight lines. Regardless of fundamentals, it was irrational to believe in February 2009 that equity markets would sink to zero. In early March, equity markets rebounded and are on an almost constant upward incline. Beware.

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China ticking along nicely PDF Print E-mail
Written by Marks@Tiburon   
Saturday, 13 June 2009 10:56

Fixed asset investment figures for the first 5 months showed a 33% increase YoY. For May alone it was up 38% YoY. Within that real estate investment in May was up 12% versus a 6% improvement in April.  Despite these big numbers, the stimulus measures continue.

Auto numbers were up by a similar quantum YoY supporting evidence of renewed consumer confidence.

We have said before that China cannot save the world single handed but that it can save itself. The evidence appears supportive.

Last Updated on Saturday, 13 June 2009 10:58
 
Has the rally come to an end? PDF Print E-mail
Written by Roundtripper   
Monday, 08 June 2009 04:36

Stronger than expected payroll numbers. US markets rallied in the morning and fizzled at the close. A few weeks ago, this sort of better than expected economic indicator would have fueled a rally of at least 2% for the SPY and the Dow. What happened on Friday smells like distribution to me.  The reality is that things aren't really getting better, they're just getting worse more slowly.

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To chase or not to chase? PDF Print E-mail
Written by Roundtripper   
Thursday, 04 June 2009 08:20

You’re performance is lagging the market. Maybe you are only up single digits or mid teens, ytd. The (MSCI Asia-ex Japan) market is +35%. 

Last Updated on Thursday, 04 June 2009 08:28
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Convertible Bond Arbitrage 2009 and Beyond PDF Print E-mail
Written by Bryan Goh   
Thursday, 28 May 2009 08:38

Convertible arbitrage has been one of the best performing hedge fund strategies year to date in 2009, up 17.9% while the HFRI general index has gained 4%. Recall, however, that convertible bond arbitrage was one of the worst performing strategies in 2008 losing 33% while the HFRI general index lost 19%. 

Last Updated on Tuesday, 02 June 2009 05:29
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Hedge Funds Missed the Rally. Has Someone Missed the Point? PDF Print E-mail
Written by Bryan Goh   
Wednesday, 20 May 2009 11:44

Star Date 2009 05 19:

 

Hedge funds have been accused of missing the equity market rally begun March 2009. Let us look at an example of an equity market such as the European equity markets to see why.

Last Updated on Tuesday, 02 June 2009 05:30
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Anymore suckers out there? PDF Print E-mail
Written by Roundtripper   
Saturday, 16 May 2009 00:00

Looks like the SPY failed to break through the 935 resistance level set in early January. We fear with the last fool is already on the bus, (http://www.businessinsider.com/henry-blodget-kessler-it-was-a-classic-suckers-rally-and-you-fools-fell-for-it-2009-5) the spring rally will turn into a bloody summer. 

Last Updated on Tuesday, 02 June 2009 05:33
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"Expensive" defensives in Asia are no longer PDF Print E-mail
Written by Marks@Tiburon   
Monday, 11 May 2009 05:28

The dramatic rise in markets over the last two months has removed some of the lowest hanging cyclical fruit from the investor’s orchards, with some of the most remarkable rises coming from a reduction in perceived bankruptcy risk as bond markets have reopened, equity has been raised and investors start to believe that bankers may one day make another loan.

Last Updated on Tuesday, 02 June 2009 05:37
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Bull Market Rally or Bear Market Rally: Guest Article by Ernest Chew PDF Print E-mail
Written by Ernest Chew   
Thursday, 07 May 2009 07:23

It seems that equity markets have confounded the pundits. Here is an article written by a good friend of mine who works as a stock broker in Singapore. He turns his commentary specifically to the Singapore equity market, but it might be applicable to any market.

Last Updated on Tuesday, 02 June 2009 05:37
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Why I Think This Equity Market Rally Will Last PDF Print E-mail
Written by Bryan Goh   
Friday, 01 May 2009 12:01

I rarely make predictions because I hate being wrong. But I shall make this prediction to help make my short positions profitable. Except that you can't wash your car to make it rain. So here goes. 

Last Updated on Tuesday, 02 June 2009 05:39
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Global Macro in 2009. Think again PDF Print E-mail
Written by Bryan Goh   
Friday, 17 April 2009 11:16

In the recent investor surveys a number of hedge fund strategies stand out as strategies which investors expect will do well going forward and which they intend to increase their exposure to. Among these are distressed credit, global macro and CTAs.

Last Updated on Tuesday, 02 June 2009 05:40
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Featured Articles

Hedge Fund Incubation and Seeding. A perspective for 2009.

In the interest of full disclosure, First Avenue Partners of which I am a partner, runs a hedge fund seeding and incubation business.

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Hedge Fund Investors: Gluttons for Punishment? A reply to The Economist

Hedge fund investors are gluttons for punishment. So says the economist in their May 14, 2009 article where they claim:

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