Bruce Berkowitz, founder of Fairholme Capital Management, spoke with Bloomberg TV’s Erik Schatzker about moving beyond mutual funds, his decision to close existing funds to new investors and why he likes financials. Berkowitz said, “Mutual funds are great vehicles…They’re transparent. They give investors daily liquidity. They’re highly regulated. But there are also constraints that go along with that.”
Berkowitz, who is raising money for a partnership that takes minimum investments of [...]
CITI: This Big Thrust Into Stocks Is Probably Just Seasonal, And That Means A Correction Is Looming
The month of January has been pretty interesting for market observers.
While it’s been a slow grind higher on the S&P 500, nearly every day inching closer to all-time highs, flows into equity funds have been incredible – even historic.
In the first week of January, investors poured $26.6 billion into stocks. In the second week, $21.9 billion. [...]
from Michael A. Gayed:
The decline in the S&P 500 and worldwide equities has been unrelenting so far this month, as the corrective risks I highlighted Oct. 1 and in every single writing since then have abruptly ended the reflation trade post QE3. On Nov. 5 I began pounding the table to ” forget the elections ” on the stark warning price was signaling through the return of [...]
From The Reformed Broker:
I’m going to say this here and now for posterity and I hope you bookmark it:
There’s going to be such a brutal bond investor slaughter at some point over the next decade that the streets of Boston’s mutual fund district will run red with blood, the skies will be shot through with the lightning and thunder of unexpected capital losses and those who manage to survive will [...]
From Bruce Krasting:
A tax lawyer I know sent me a link to an article about a tax ruling. I’m thinking “Boring, who cares about that?” Then I read the article. A few lines jumped out:
Commodity prices could come under severe pressure if the U.S. Internal Revenue Service (IRS) decides to revoke previous rulings.
Without the tax exemption, mutual funds would have to restructure or liquidate their holdings.
The resulting liquidation would put [...]
The man behind the world’s largest mutual fund on the reaction and impact of the Fed’s latest round of quantitative easing.
There was a time when retail stock outflows were considered a bullish catalyst: after all, retail was always considered the dumb money (not “two and twenty” hedge funds which continue to underperform the stock market, and have done so for the past five years), and would pull money at the bottom and add money at the top. This is no longer the case for the simple reason that while persistent [...]
Pimco has doubled the size of its flagship exchange traded fund in less than two months, hitting $2 billion in assets as performance of the Total Return Fund ETF outpaces the far larger mutual fund on which it is based.
Rapid growth for the ETF, which was launched on March 1 – a widely watched experiment in active management in a market built on passive index following – reflects continued investor preference for [...]
President Obama has accused Mitt Romney of raking in profits from investing in companies that ship American jobs overseas, but according to his most recent financial disclosure, he and First Lady Michelle Obama have hundreds of thousands of dollars in a mutual fund that has large holdings in corporations that outsource jobs.
“(Romney) invested in companies that have been called ‘pioneers’ of outsourcing,” Obama said at a Saturday campaign event in [...]
Focusing on his supply-demand perspective of what drives stock prices and the heavy volume of corporate selling combined with mutual fund outflows that we have been so vociferous about, Charles Biderman of TrimTabs provides color on why, just like in 2010 and 2011, markets sold off in May. Whether you believe it is explicitly the angst-inspiring European malaise, Facebook’s flop, or US macro deterioration and a pending fiscal cliff – [...]
If we go belove 1.20, I have a pure EU mutual fund at Vanguard that I’m ready to pounce on and gamble a little with … still will be very careful ;-)
(One of top 5 funds and I have made some of my best $$$ in buying when euro is low and riding to $1.40 and selling)
P.S. Favorite Vanguard fund below (very aggressive earnings & losses … so you [...]
Everyone is still trying to figure out who profited from the JP Morgan Chief Investment Office’s $2 billion risky trade.
Once hedge funders and other traders got wind of what bank’s Chief Investment Office was doing, they definitely started capitalizing on it. That’s what you expect on Wall Street — when there’s blood in the water, the sharks will attack.
But here’s some surprising news, some of the sharks in on the other side [...]
Matthew Amster-Burton, Mint
Recently on the mint.comFacebook page, a reader asked a common question:
Any investments for people with very little money to invest?
Normally, my response to this is the one nobody wants to hear: put the money in a savings account or savings bond, check out a book about investing from the library, save more money while you read the book, and start investing once you have the $1000 minimum to open an [...]
In April 2011, the Huffington Post ran an article, quoting the Gallup pollsters, who said…
“only 54 percent of Americans said they own “individual stock, a stock mutual fund or in a self-directed 401(k) or IRA.” The percentage invested has steadily declined from 65 percent in 2007…”
I think that this datum is more telling than the fact that mutual funds are being replaced by ETF’s, and hedge funds. It really speaks [...]
This story refers to private banking abroad but let me tell you, it directly affects all
banking – not just that for the wealthy as you income redistribution imbeciles
think is so patriotic. I have lived and operated a business outside of the US
for nine years.
I employ Americans who work at posts in dozens of countries. In order to pay their
salaries, their expenses, social costs and taxes, I must have local bank
From The Big Picture:
Jim McTague explains why this is the unhappy anniversary of the flash crash:
From Jan. 1 through April 30, 2010, investors put $668 million into stock funds, says the Investment Company Institute, the mutual-fund trade group. By the end of 2010, they had withdrawn about $96 billion. In 2011, there were $135 billion in outflows. This year, there have been more than $15 billion in outflows.
The hazards posed [...]
This is a short excerpt from this week’s Professional Edition Fed Report to be posted Tuesday. The ICI reports mutual fund inflows weekly with a one week lag. Domestic equity mutual funds had $8.7 billion of net outflows in the week ended 4/18/12, after net outflows of $1.5 billion the week before. Based on the first 3 weeks of April, outflows for the month would project to $21.4 billion, which [...]
From King World News:
Today, King World News interviewed one of the wealthiest and most street-smart pros in the business, Rick Rule. Rule is founder of Global Resource Investments, which is now part of the $10 billion strong Sprott Asset Management. KWN reached out to Rick to find out how investors can position themselves in 2012 to make the big money going forward. Rule laid out exactly what investors need to [...]
April 11 (Bloomberg) — Japan’s biggest investors, with
$368 billion under management, say it’s too early to buy bonds
from Europe’s most indebted nations as rising Spanish yields
spark concern the region’s fiscal crisis has further to run.
Kokusai Asset Management Co., which runs Asia’s largest
mutual fund, Mitsubishi UFJ Asset Management Co., a unit of
Japan’s biggest publicly traded bank, and Diam Co., part of the
nation’s second-biggest life insurer, are all shunning Spanish
debt. Japanese investors [...]
Joshua M Brown
From The Reformed Broker:
Flows into equity mutual funds have reversed the bleeding from December and January – the money is coming back through the In-Door. Reuters told us yesterday that professional asset managers were at their highest net long exposure to stocks in 14 months. Today we get a bit of color on what your civilian friends and neighbors are up to:
Mutual fund flows also suggest individual investors were more [...]
by Rob Wile
One of the oldest, easiest, and most trusted investment strategies may no longer be safe in this new era of volatility.
“Buy-and-hold doesn’t work anymore,” said MIT’s Andrew Lo in an interview with Money Magazine‘s Charles Wallace.
Lo offers more color:
The volatility is too significant. Almost any asset can suddenly become much more risky. Buying into a mutual fund and holding it for 10 years is no longer going to deliver the [...]
Bill Gross’s Pimco Total Return Fund, the world’s biggest mutual fund, attracted $231 million in investor deposits in January as performance rebounded.
The new money ended three straight months of redemptions from Pimco Total Return, according to data compiled by Chicago- based Morningstar Inc. Investors pulled about $3 billion from the fund in the three months ended Dec. 31, bringing withdrawals last year to $5 billion, the research firm said.
As volumes this year in stock markets remain significantly below last year’s but high yield bond ETF inflows reach record highs, TrimTabs offers some context for the massive relative flows of real cash into checking and savings accounts versus stock and bond mutual fund and ETFs. Not-Charles-Biderman, otherwise known as David Santschi of the now-infamous Bay Area backdrop, explains the incredible statistic that in the first 11 months of last year [...]
emember when yelling “Monday” is all it took for the market to surge on mutual fund pumping and/or cheap money M&A? Neither do we.
by Phoenix Capital Research
Here are a few zingers for the “recovery” crowd.
The US economy added no new jobs last month. That’s the first time this has happened in the post-WW II period.
Productivity in the US has declined in back to back quarters (despite QE 2). If we get another decline in 3Q11 it will be the first time this has happened since the depths of the 1979 [...]
The ICI fund flow data is out and it is ugly: in the past week, investors pulled money from every single strategy for a total outflow of $10.4 billion. As usual the biggest drop was in domestic equities, which saw $8.76 billion in withdrawals, the largest since the Flash Crash when investors yanked $13.4 billion. This is the 15th consecutive week of outflows, and brings [...]
Passport Capital’s John Burbank is one of the better macro thinkers out there today. In a recent client letter (via Distressed Debt Investing) he described what he believes are the greatest risks in the markets today. He says:
“Given these concerns, we believe markets are mispricing risk. We believe it is prudent to maintain a sizable store of cash, and we will allocate it when opportunities appear more compelling. [...]