Thursday, 05 February 2009 04:00

My blog readers can easily say they are the best and the brightest amonst Global Macro Fund Managers

Soros has nothing on BoomBustBloggers Cool, there's a new sheriff in town!

From Bloomberg, "Soros Imitators Reap Riches in Financial Crisis on Macro Funds":

Hedge fund managers on average lost
18.7 percent of their clients’ money in 2008, for the worst
performance since at least 1990, according to Hedge Fund Research
Inc. Combine the losses with investor redemptions, and total hedge
fund assets have been cut almost in half. TrimTabs Investment
Research and Barclay Hedge Ltd. estimated funds held $1.1 trillion
at the end of the year, down from $1.9 trillion a year earlier.

One rare bright spot: the resilience of global macro fund
managers, who wager on currencies, equities, interest rates and
commodities based on their fundamental analysis of world economic

Their funds gained 5 percent on average amid the carnage,
according to Chicago-based Hedge Fund Research, prompting
investors and managers to predict a renaissance for the once
ubiquitous strategy. [Hah! BoomBustBloggers gained 106% for the same time period, and most assuredly have considerably more transparent documentation to prove it, not to mention the ability to cap research costs at $2,500 - A new days is a dawning! See 2008 Performance Results] Preliminary estimates show macro funds up
another 1.4 percent in January.

“Twenty years ago, the words hedge fund meant global macro,”
says Colm O’Shea, founder of Comac Capital LLP in London, a macro
firm with $1.3 billion under management and returns of 30.7
percent last year. “I believe they will again in the future.”

Alan Lenahan, managing principal of Fund Evaluation Group
LLC, a Cincinnati-based investment advisory firm, says macro funds
will garner a bigger share of the money that he expects will flow
back into the industry. “You’re going to see investors flock to
global macro,” he says. [One would think they would flock to this blog instead. It's a lot cheaper, and apparently you'd make a lot more money as well!]

The multiyear performance of hedge funds overall, even
including 2008, justifies a place in most portfolios, he says.
Pension funds, endowments and wealthy individuals will return,
despite having withdrawn money since last summer, he says, and
they will favor what’s been working best. [Favor what is best??? Ok, the subscription form is here.]

For the record, and for those who don't know, I am in my element here. To learn more about my proprietary investment style, see "The Great Global Macro Experiment, Revisited". I don't mean to brag or boast, but my 8 year track record bests Soros' by at least 100% (at least that I know of). I may be a tad bit more humble as well. Remember what I told you about Name Brands Investors? To Soros' credit, he is an immensely fascinating and accomplished man. Apparently highly intelligent, he appeared to have literally had it go to his head for a time, suffering from a God syndrome where he went into a depression after realizing he wasn't superior. At least that is how I remember reading his book. His early books are an utterly fascinating read, and his philanthropic push to oust George Bush and fight abject poverty across the globe aligns him precisely along my interests, so I better stop making fun of him.Tongue out

In reference to the The Prudential Plc Forensic and Fundamental Analysis Sample Trade Addendum, see Bank of England May Cut Interest Rate Closer to Zero as Recession Deepens. Those that put the bearish USD/GBP trade in would have made good money, I still believe it is good on top of the spreadsheet Prudential Forensic Analysis Pro trade described therein. This is not for beginners, though it is excellent training in Real Reggie-style Global Macro.

I hope you guys realize how ridiculously under-priced these subscriptions are. Speaking of insurers, global macro, and the pound...

From Bloomberg:

The Bank of England will probably lower the benchmark interest rate closer to zero today as officials resort to buying securities to revive the economy.

The nine-member Monetary Policy Committee will cut the bank rate to 1 percent, the lowest since the institution was founded in 1694, according to the median of 61 economists’ forecasts. The decision comes at noon in London, and Governor Mervyn King will present updated forecasts on Feb. 11.

As conventional monetary policy tools lose their potency to aid an economy sliding deeper into a recession, Prime Minister Gordon Brown’s government has given the bank powers to spend up to 50 billion pounds ($73 billion) on bonds and commercial paper. Service companies shrank in January, consumer confidence fell and the inflation rate has dropped at a record pace.

“With unemployment rising, the bank will come under pressure to cut to zero,” said David Tinsley, a London-based economist at National Australia Bank and a former Bank of England official. “They’ll try to shift the focus to quantitative easing.”

King said Jan. 20 that the central bank will buy “high- quality” assets within “weeks and not months” to ease market strains. He and U.S. Federal Reserve Chairman Ben S. Bernanke are pursuing alternative measures to revive lending among banks stung by the global financial crisis.

The Bank of England has lowered its key rate by 3.5 percentage points from 5 percent in October. The Fed has cut its key rate to a range between zero and 0.25 percent. The European Central Bank will probably keep its rate at 2 percent today.

Last modified on Thursday, 05 February 2009 04:00