The Squeeze Continues
- Thread starter waggie945
- Start date
Quote from waggie945:
The monetary base growing like crazy, and much faster than the economy is. Sellers are nowhere to be found. The market has shown a good bid since many portfolio managers have missed this move and are UNDERPERFORMING. Group rotation is intense, which is super healthy and alleviates any issues with low volume.
Statistically, September is weak.
But then again, August was suppose to be historically weak as well. The market may very well continue to climb a wall of low volume worry . . . The BALLISTIC MONEY SUPPY is a tough engine to fade!
Waggie; we're totally on the same page. The liquidity is massive. I suspect demand will meet supply in September and the accumulation will be aggressive on upticks. Lots of real shorts in futures, lots of synthetic shorts, i.e. underinvested, in fundland.
Also, I did not gear my comment directly toward Rob Arnott, as I stated. I just made a point since someone made a comment about whether the guy really knows what he is talking about.
But after all, if he is so smart, why is he sharing any of this info with CNBC
You have to understand that almost every single one of these guys that manage billions and billions of dollars ( such as a Barr Rosenberg, Bill Gross, Rob Arnott, etc. ) come from an academic background that has a huge emphasis in quantitative analysis based in mathematics. They look at regression analysis, historical risk-premiums between asset classes, etc. They surely don't sit there and "shoot from the hip" when it comes to making an investment decision or a tactical asset-allocation decision.
In the end, because they came up through academia they enjoy presenting various investment and asset-allocation models to the public. They enjoy teaching, and appearing on CNBC is just an extension of that.
But after all, if he is so smart, why is he sharing any of this info with CNBC
You have to understand that almost every single one of these guys that manage billions and billions of dollars ( such as a Barr Rosenberg, Bill Gross, Rob Arnott, etc. ) come from an academic background that has a huge emphasis in quantitative analysis based in mathematics. They look at regression analysis, historical risk-premiums between asset classes, etc. They surely don't sit there and "shoot from the hip" when it comes to making an investment decision or a tactical asset-allocation decision.
In the end, because they came up through academia they enjoy presenting various investment and asset-allocation models to the public. They enjoy teaching, and appearing on CNBC is just an extension of that.
In 1985 the Quantum Fund was managing about $1.3 billion dollars and charging a 4% management fee. I know this because a good friend was just starting a career there that lasted a decade with Soros and Stanley Druckenmiller.
In any event, everything was going well until Soro's heir apparent and portfolio manager, Stanley Druckenmiller ( who came aboard in 1989 and engineered the big bet against the British Pound and Italian Lire) got involved in the momentum stocks in the late 90's ( Verisign at $220 comes to mind ). He actually attended a high-tech conference back in Idaho and started developing the thesis that "THIS TIME IT IS DIFFERENT"
As a result, the fund got caught invested in a lot of high growth, hi-tech, momentum type names ( including some huge bets in Biotech stocks ) that came crashing back to earth. The fund also got caught in some huge currency bets that turned sour, as well. The fund eventually closed down following the resignation of his top money managers, Stanley Druckenmiller and Nicholas Roditi in April of 2000. At the time, the Quantum Fund had suffered about $5 billion in losses in March of 2000 and was down to $8.5 billion in assets.
Up until that point Druckenmiller was +35% in 1999, exceeding the 21% advance of the S&P 500. The previous three years, Quantum's returns were lower than the S&P 500, and Druckenmiller's own record of 30% average annual returns between 1989 and 1999.
Soros then decided to turn Quantum back to a "conservatively" managed ENDOWMENT FUND in which they would aim for 15% returns instead of 30%, focusing in on less risky arbitrage and macro bets.
A few years later, in the Fall of 2001 George got the itch to start his hedge-fund business back up again and initiated a job search for a new President and CEO to run his fund again. William Stack, a former senior managing director and CIO for Dresdner RCM Global Investors where he oversaw a $60 billion portfolio became the new CEO for the new Quantum Fund.
Druckenmiller is currently ( and has been ) the President of Duquesne Capital, a multi-billion dollar hedge fund.
In any event, everything was going well until Soro's heir apparent and portfolio manager, Stanley Druckenmiller ( who came aboard in 1989 and engineered the big bet against the British Pound and Italian Lire) got involved in the momentum stocks in the late 90's ( Verisign at $220 comes to mind ). He actually attended a high-tech conference back in Idaho and started developing the thesis that "THIS TIME IT IS DIFFERENT"
As a result, the fund got caught invested in a lot of high growth, hi-tech, momentum type names ( including some huge bets in Biotech stocks ) that came crashing back to earth. The fund also got caught in some huge currency bets that turned sour, as well. The fund eventually closed down following the resignation of his top money managers, Stanley Druckenmiller and Nicholas Roditi in April of 2000. At the time, the Quantum Fund had suffered about $5 billion in losses in March of 2000 and was down to $8.5 billion in assets.
Up until that point Druckenmiller was +35% in 1999, exceeding the 21% advance of the S&P 500. The previous three years, Quantum's returns were lower than the S&P 500, and Druckenmiller's own record of 30% average annual returns between 1989 and 1999.
Soros then decided to turn Quantum back to a "conservatively" managed ENDOWMENT FUND in which they would aim for 15% returns instead of 30%, focusing in on less risky arbitrage and macro bets.
A few years later, in the Fall of 2001 George got the itch to start his hedge-fund business back up again and initiated a job search for a new President and CEO to run his fund again. William Stack, a former senior managing director and CIO for Dresdner RCM Global Investors where he oversaw a $60 billion portfolio became the new CEO for the new Quantum Fund.
Druckenmiller is currently ( and has been ) the President of Duquesne Capital, a multi-billion dollar hedge fund.
Quote from waggie945:
Also, I did not gear my comment directly toward Rob Arnott, as I stated. I just made a point since someone made a comment about whether the guy really knows what he is talking about.
But after all, if he is so smart, why is he sharing any of this info with CNBC
You have to understand that almost every single one of these guys that manage billions and billions of dollars ( such as a Barr Rosenberg, Bill Gross, Rob Arnott, etc. ) come from an academic background that has a huge emphasis in quantitative analysis based in mathematics. They look at regression analysis, historical risk-premiums between asset classes, etc. They surely don't sit there and "shoot from the hip" when it comes to making an investment decision or a tactical asset-allocation decision.
In the end, because they came up through academia they enjoy presenting various investment and asset-allocation models to the public. They enjoy teaching, and appearing on CNBC is just an extension of that.
Well of course they all come from an academic background. As if they are the only people in the world that come from the same background. Usually their school is what gives them the connections.
Regardless, it's just academia and school smarts do not really mean much. It's not like these money managers are doing anything so groundbreaking that none of their peer classmates could not do. I mean there are A LOT of people nowdays with the same if not better education. It's not 1970s anymore.
However the number of these top notch money manager jobs are simply limited. So in the end it just comes down to either luck or nepotism, mostly the latter.
Thats all the pont was. I never said they are morons or imbeciles, although you never know. My point was that such title as major money manager, fund manager and so on really means nothing when it comes to forecasts. It's not like there is any real meritocracy in the financial sector.
During the 90's bubble there were a lot of imbeciles who simply had moneyed connections and launched hedge funds. Hell, if one's inheritance or trust fund is large enough you don't even need friends w/ $$ to launch a fund. Cramer might fit the bill - but I don't know that much about him other than he was funded by his college professor / friends and quit as the bubble was coming to an end.
Of course there are plenty of geniuses in the field as well, many of whom have already been mentioned in this thread.
So we can't generalize about the hedge fund managers - they come in all shapes and sizes.
Of course there are plenty of geniuses in the field as well, many of whom have already been mentioned in this thread.
So we can't generalize about the hedge fund managers - they come in all shapes and sizes.
Quote from waggie945:
[B...
In the end, because they came up through academia they enjoy presenting various investment and asset-allocation models to the public. They enjoy teaching, and appearing on CNBC is just an extension of that.
I would have to disagree. I know this mathematical analysis world very well and I would never characterize appearences on CNBC or any other media outlet as being driven by the need to "teach", "coach", or anything else. People go to the media for one reason: to pitch a position that enhances theirs. I am not saying that they intentionally make these public statements with intent to defraud. What I am saying is that the appearences are driven by the need to enhance their marketability or propagandize some piece of information.
Attributing any other motive to these marketiong opportunities is an error IMHO. Acting on any piece of information that these people present is a major error - although there is rarely any useful information presented by such people and most of it is nearly devoid of any true insight or new information.
I never listen to Greenspan's comments during the Humphrey Hawkins Testimony on CNBC because he too, is simply trying to "enhance his marketability and propagandize some piece of information."
As CALTRADER says:
Acting on any piece of information that these people present is a major error - although rarely any useful information presented by such people and most of it is nearly devoid of any true insight or new information.
Oh please CAL TRADER, please SAVE US FROM CNBC!!!
They are out to RULE THE WORLD, and we are just total morons, and don't have the brains to make a distinction between hype, rhetoric, fiction, or fact.
:eek:
As CALTRADER says:
Acting on any piece of information that these people present is a major error - although rarely any useful information presented by such people and most of it is nearly devoid of any true insight or new information.
Oh please CAL TRADER, please SAVE US FROM CNBC!!!
They are out to RULE THE WORLD, and we are just total morons, and don't have the brains to make a distinction between hype, rhetoric, fiction, or fact.
:eek: