Coupon Clipping
How was your January?
If you run a hedge fund we hope it was good...string together a few bad months and they will take the money away. There are no free passes on Wall Street. But even legends can struggle from time to time.
Bill Gross is off to a tough start this year...but he has good company in the bottom-decile. Bill Miller is lucky to be in the Large-Cap Blend Box...if he was in the Large-Cap Value category his relative performance would look even worse. Over the last few years anyhow...we like to look at three year numbers.
Maybe Amazon’s (AMZN-NASDAQ) numbers tonight will bail Bill out. But he needs to get it in gear...the mainstream will be on his case by the end of 2008 if he remains a cellar dweller.
These guys will probably right the ship at some point. And they can live off goodwill...unlike most managers.
Thankfully we don’t have any dogs in our contest against Dagen. Tom Marsico is off to a great start this year. Denver is rocking again. Is growth back?
The worm might have turned, but there are always plenty of dogs on Wall Street in need of euthanasia.
Tommorrow we will send another mutual fund dog to the big kennel in the sky...after seeing these numbers you will never look at a chihuahua the same way.
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No positions in any funds or stocks mentioned .
Crazy Quants
Trader Daily snagged the sexist read of the day...we could tell you more, but would have to kill you at the end. Hopefully these Geniuses fare better than Lowenstein’s
Goldman Secrets
Working out of a granite-and-glass office tower a few blocks from Goldman Sachs’s Broad Street headquarters in lower Manhattan, Carhart and Iwanowski hunt for market variables called risk factors that often lead to excess investment returns, or premiums, according to people familiar with the fund.
Some, such as a measure called the value premium—the difference between the return of a group of stocks with high book values relative to their prices and that of a group with low book value-to-price ratios—have been used by other money managers for years. Goldman Sachs has identified more than 20 new risk factors, which it doesn’t disclose, even to its own investors.
Carhart never reveals the secrets. Old friends and people who’ve invested in the fund say they’re not really sure how it works.
John Cochrane, one of Carhart’s professors at the University of Chicago, says that based partly on what Carhart has told him—not much, he admits—Goldman Sachs has devised five or so proprietary risk factors for equity markets. Bloomberg/Richard Teitelbaum
Great work Mr. Teitelbaum
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Are you a real quant?
Mathematical discoveries, small or great are never born of spontaneous generation. They always presuppose a soil seeded with preliminary knowledge and well prepared by labor, both conscious and subconscious.
Jules Henri Poincaré (1854-1912)
Does staring at your screen drive you to drink? You can quaff a few with QWAFAFEW
Quants only please
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Mid-Cap Value Dog
Part four of worst in show
We survived Mayor Dinkins years in office. It takes a lot to scare us.
But the American Staffordshire Terrier, best known as the American Pit Bull Terrier, scares us more than any crack dealer working the mean streets of the Upper East Side circa 1990.
Pit Bulls are known to be aggressive toward other dogs, although this can be avoided with proper training. When properly socialized they can do well around children and make great family pets. Still, a fenced yard is recommended and this breed is not a great choice for first time owners.The Straight Poop
Mid-Cap Value funds have never been our favorite breed, and the category has been slow to be adopted by Wall Street. Mid-Cap Value managers might not be popular, but they can be tenacious. Their bite is worse than their bark and they will often hold onto stocks for years, seemingly oblivious to pain as they scale into positions that often trade down into Dante’s bargain bin.
The Valley Forge (VAFGX) fund has kept investors on ice for years now...these managers are incinerating shareholder’s money in a desperate attempt to stay warm.
George Washington might have slept at Valley Forge...but it is unlikely the investors in this fund are sleeping well.
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The content contained represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. Underthecounter has no positions in any funds mentioned .
Boston Massacre
Growth stock shops might not be a bad bet in 2007, but betting on Marsh & McLennan (MMC-NYSE) closing this deal with the Canadians could be…
On Dec. 29, the Wall Street Journal reported that Marsh had agreed in principle to sell Putnam for some $3.9 billion. At that rate, Power Corp. would be paying roughly 2% of Putnam’s total assets under management. Analysts considered that as about the going rate for an average asset-management business.
Is turnaround artist Michael Cherkasky playing poker or opossum?
Michael Cherkasky, chief executive at Marsh & McLennan Cos. Inc., says he remains open to several options on Putnam Investments, and hasn’t ruled out keeping it outright or retaining a partial stake in the struggling asset manager.
Boston ain’t Denmark but something smells rotten…
“It came as a big surprise when they chose the Canadians,” said Burt Greenwald, a Philadelphia-based fund consultant. “Even after they made the announcement, it seemed like a lot of details still needed to be worked out. It all seemed rather sketchy.
Boston’s big shops have been massacred…
Still, Putnam continues to bleed assets. “They haven’t had positive long-term mutual-fund net flows since the first quarter of 2001,” said Owen Concannon, an analyst at Financial Research Corp.
In fact, by the market tracker’s estimates, Putnam’s mutual funds lost $109.2 billion in net outflow from that period through November 2006.
But outflows have been slowing since early 2005 to average around $4.6 billion per quarter, after running at a rate of $7.3 billion in the seven previous quarters.
“Putnam is still one of the biggest mutual-funds complexes in terms of outflows,” Concannon said. Marketwatch
Are you sticking with this dog?
Putnam’s problems have been well publicized and parent company Marsh & McLennan finally bit the bullet.. Assuming a transaction is consummated, Putnam’s next challenge will likely be cultural. While its possible lucrative retention packages keep its employee’s focused, integration issues are likely to keep Putnam’s fund manager’s on edge. Large-Cap Value Dog
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. Underthecounter has no positions in any securities or funds mentioned above.
Mighty Wind
What do Google (GOOG-NASDAQ) and Tyco (TYC-NYSE) have in common?
Bill Miller
The legendary fund manager just wrote one of the longest winded shareholder letters we have ever read; you might want to set aside a chunk of time if you plan to read it.
We found his comments on valuation interesting...we are on board with this
Being valuation driven means that we minimize our exposure to the
panoply of social psychological cognitive errors identified by the
behavioral finance researchers. I think those are the source of the only
enduring anomalies in an otherwise very efficient market, since they cannot
be arbitraged away
and it would seem the fire still burns in the belly…
The best thing about the streak is we helped clients and shareholders.
For 15 consecutive years we actually added value after expenses and helped
those who have entrusted money with us to achieve their goals. I am
optimistic and confident we can continue to do so, but as they say, there
are no guarantees in this business. One thing I can guarantee is that no
one will work harder or care more about your money than the team at Legg
Mason Capital Management.
Bill Miller, CFA
January 20, 2007
PRN Newswire
Some people think style boxes are stupid
Trying to put Bill in a style box is probably stupid...after all The Legg Mason Value Trust falls in the Large-Cap Blend category
And the market still does not like his stocks…
He is not accustomed to hanging with the Boyz in this hood
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. Underthecounter has no positions in funds or securities mentioned above.
