Singapore-based hedge funds outperformed Asian rivals during the first seven months of the year thanks to a greater focus on India and global markets, according to data provider Eurekahedge Pte.
Funds headquartered in Singapore returned 2 percent through July, while Hong Kong-based funds declined an average 2.3 percent, Eurekahedge said in a report Tuesday. Funds based in Australia rose 1.9 percent, while Japan-based funds declined 2.5 percent, the report said.
“Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices. A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.”
Planning for water shortages before a drought
Pests and weather pose risks to crop yields, but a season or even a few seasons of drought should not have a long-term impact on farmland investing. Many farmers have successfully managed droughts, pests and floods. Drought is a well-understood, age-old risk that can be planned for and mitigated, especially in short time horizons. The current drought is an excellent case in point. TIAA owns multiple properties in California across more than 37,000 planted acres, and as part of the property acquisition process, the stability of the water supply is always a primary focus of due diligence. This review includes research on the following water-related subjects:
Where possible, TIAA seeks to acquire properties with multiple sources of water, such as reliable groundwater wells that are supplemented by the right to receive surface water from water districts. Properties that are not serviced by water districts or other surface water rights are located in areas with historically reliable ground water supplies. Furthermore, advanced planning for those properties that typically receive most of their water from water districts, which are likely to have no supplies available in 2014, is required to ensure access to and availability of banked water. When droughts linger, however, they may cause problems for all farms—no portfolio is immune from a long-term drought. The current drought has demonstrated the value of planning for short-term water shortages.
In addition to acquiring land with fundamentally strong water supplies, actively managing farms may offset, to the extent possible, the impact of drought conditions. Strategies to accomplish this may include the installation of water-conserving technologies such as drip and micro-sprinkler irrigation systems; acquiring and banking water when possible; and winter transfers of underground water to above-ground storage to make the water more readily available to the farm during dry periods.
A long-term view of farmland investingLooking back at the 2012 drought across the U.S. Midwest, it is important to note that the drought impacts had no material negative impact on farmland values, and similarly we expect minimal long-term impacts for our California investments. This does not mean the danger of droughts, pests and floods are to be ignored; indeed, planning for these hazards is critical to maximizing returns and managing farmland investment risk. The longer a drought persists, the greater the potential for material impacts to any farmland portfolio. TIAA’s long involvement in farmland and deep connections within the agriculture industry provide us with the experience and expertise to properly analyze these risks, which fall outside the traditional realm of financial markets. We believe that farmland is among several private investments in real assets that offer the potential for competitive risk-adjusted returns, a hedge against inflation and improved portfolio diversification.
Farm real estate remains the most direct method of investing in the agricultural sector. In recent years, the agricultural sector has provided consistently positive returns as a result of high commodity prices and rising farm income levels. The success of the agricultural sector has led to increased attention from investors outside of the traditional agricultural finance sector.
The plan was relatively simple, in the absence of attractive fixed income yields, large asset managers (like TIAAmentioned above with $850BN of AUM) decided to purchase hard assets like farmland instead. Farmland could then be planted with the highest value crop, which just happens to be almonds in California, to drive attractive ROICs on invested capital. A few simple charts illustrate perfectly how the story played out.
Per the chart below, planted almond acreage in California nearly doubled from 2003 - 2016...
We don't know about you but we're not sure about underwriting California farmland to a 4% return particularly in light of that "minor" little drought issue they're facing. We would be looking for ROICs closer to 8% - 10%, at a bare minimum, which, at current almond prices, implies that acreage needs to come down around 45%-55% from the $35,000 per acre level.
But the story doesn't end with almond acreage which only represents about 1mm of the total 8mm acres of irrigated farmland in California (see data from the United States Department of Agriculture). So if we assume that California's 8mm acres are worth $25,000 per acre on average that implies roughly $200BN worth of farmland in total. Now, even if that number is only inflated by 35% (and not the more draconian 45%-55% we suggested above) it implies that farmland owners, many which are New York institutional buyers, in California alone are sitting on $70BN worth of losses.
By the end of July ,the number of listed private equity fund managers had decreased from 24,094in June to 16,467,down 31.66percent percent .Of all firms dealing in securities ,equities ,venture capital and other categories ,securities and equities firms underwent the most severe clearing ,with 35percent of private equity firms removed .Accordingly ,the number of practitioners was cut by 31.48percent to 275,800.By contrast ,the scale and variety of funds have continued to increase .The variety of funds rose from 32,355in June to 36,829in July .The registered capital and paid-in capital increased from 6.83trillion to 7.47trillion yuan ,and from 5.58trillion to 6.11trillion yuan respectively .
“The seniors have blown themselves out of the water,” the former CEO and founder of Goldcorp Inc. said in an interview in Vancouver. “They’re just going to be ships rising in the tide. It’s going to be the intermediate and juniors who have the big runs in this cycle, and that’s where I want to be.”
That trend has already begun. Gold companies listed on the Venture and Toronto Stock Exchange with a market value of less than C$2 billion have climbed on average 247 percent this year, while their larger peers are up 125 percent, according to data compiled by Bloomberg.
Not all his predictions have materialized. In February 2009 McEwen forecast gold would top $5,000 an ounce in about six years. Gold futures in New York did rise dramatically from that point and reached an intraday record $1,923.70 in September 2011. But the metal subsequently swooned and, even after a 27 percent gain this year, traded on Monday at about $1,345. He now forecasts gold will reach $5,000 by 2021.
The Opportunity Trust has been up and down in 2016: the fund rose almost 10 percent in July, but is still down 8.5 percent for the year. McLemore said the fund’s recent rebound has been fueled by a shift in investor sentiment toward cyclical stocks and away from defensive ones.
With Miller’s departure, Legg Mason said, Miller acquired Legg Mason’s stake in LMM, which provides investment management services to Legg Mason Opportunities Trust, Miller Income Opportunities Trust and related strategies.
Value investor Bill Miller told CNBC on Wednesday he lost 20 percent in a month, but he thinks it's a good time to buy.
Amazon lost 18 percent in the past month and the stock is a 10 percent holding for Miller, founder, chairman, and CIO of Baltimore-based LMM. But he said it's not only Amazon. "Everything is going down."
"It took Bill Ackman and David Einhorn a year to lose 20 percent. I lost it in a month. My fund is down 20 percent in the month," Miller said on "Squawk Box," referring to the respective heads of the Pershing Square and Greenlight Capital hedge funds.
Miller, who has a strong track record, said he's been fully invested, no cash, since the 2008 financial crisis, and he's still bullish. "Lower prices mean higher future rates of return."
"The S&P [500] yields about 2.3 [percent] and dividends grew last year 9 percent," he said. "It's sort of hard to see why anyone would own a 10-year Treasury when they could own the broad market at a higher current yield."
LMM, a partially owned subsidiary of Legg Mason, has $2.1 billion of assets under management. Miller is also portfolio manager of the Legg Mason Opportunity Trust fund.
With depressed oil prices and a slowdown in China's economy, stocks logged their worst January since 2009. February has also gotten off to a volatile start — raising questions about whether the U.S. economy may go into recession.
"People think the market has some special ability to see the future. [But] the market is just people just like you and me buying and selling," said Miller. "There's disconnect between what's actually going on [economically] and what the markets are reacting to."
Take oil as an example, he said, "[historically] 85 percent of the time oil goes down, the stock market goes up. And every recession since 1970 has been at least accompanied by higher oil prices."
But in the markets now, the opposite is happening. Plunging oil prices have been driving the stock market lower, while crude gains have been pushing stocks higher.
Miller said this doesn't make any sense because "lower oil prices are unequivocally good for the U.S."
Is Bill Miller, 65, truly a great investor or does his aggressive stock-buying strategy, scooping up out-of-favor companies, merely magnify the broader market trends -- up a lot when times are good, down a lot when times are bad?Miller has always stuck to his investment decisions regardless of popular sentiment, said Raymond ‘Chip’ Mason, the Legg Mason Inc. founder who hired Miller in 1982.
“When he first bought Amazon, everyone said he was nuts,” said Mason. “But he was convinced he was right and it turns out he was.”
Miller’s shares of the ecommerce giant in the Opportunity Trust were purchased for an average of just above $20 a share. Today they trade for more than $525.
When Netflix lost 80 percent of its value between 2011 and 2012, Miller bought the stock at about $60 a share. “It is up more than 10-fold in three years,” he said.
Miller has made changes since the last recession. He is more sensitive to broad macroeconomic developments, a policy that kept him from investing in Europe during the Continent’s debt crisis in 2011. The fund also no longer buys hard-to-sell assets such as private equity stakes, said Samantha McLemore, Miller’s co-manager.Michael Mauboussin, a Credit Suisse executive who has known Miller for more than 20 years, said Miller was and still is a smart contrarian investor. The wild swings in his reputation, said Mauboussin, need to be put in perspective.
Mr Miller’s funds are no longer large enough to move the needle inside a group that manages $757bn of assets in total, across nine separately branded investment boutiques, Legg Mason has decided.
A former military intelligence officer who studied philosophy before turning to investment, Mr Miller’s former fund, the Legg Mason Value Trust, outperformed the S&P 500 for 15 straight years.
The Legg Mason Opportunity Trust — which counts Quotient Technology, an online marketing business, and the housebuilder Lennar among Mr Miller’s top picks — has proved a volatile performer since its inception in 1999. It is in the bottom 11 per cent of funds in its category over the past 10 years, according to Morningstar, in the top 1 per cent over five years, and in the bottom 3 per cent over the past year.
Vietnam is working on a scheme to grant electronic visas for foreign visitors from next year, Prime Minister Nguyen Xuan Phuc said.
The government had allocated some 200 billion Vietnamese dong ($8.97 million) to speed up the implementation of the scheme so that the e-visa system can be launched on January 1 next year, Xinhua news agency quoted Phuc as saying on Tuesday.
Last month, in an attempt to attract more visitors, Vietnam renewed the 15-day visa waiver policy for citizens of Britain, France, Germany, Spain and Italy for another year.
By 2020, Vietnam targets to attract 10 million to 10.5 million international visitors with tourism revenue reaching $18 billion to $19 billion each year.
When Frank Chen sees China’s stocks rise, he thinks of how he can reduce his investments.
"I’ve already given up on this market,” said Chen, a 38-year-old accountant in Shanghai who’s liquidated more than half his 100,000 yuan ($15,050) of shareholdings in the past six months as shares rebounded. “If my stocks rise to levels that erase all my paper losses, I won’t be hesitate to choose to cash out immediately.”
Overseas traders have also turned more bullish on the nation’s shares traded in Hong Kong. The Hang Seng China Enterprises Index has rallied 22 percent from a February low to reduce its loss this year to 5.5 percent, while the premium of mainland shares over their Hong Kong peers has narrowed to near the least in 10 months. The Shanghai Composite is still down 16 percent, one of the world’s worst declines.
“The economic environment isn’t good and sound. I haven’t seen any chance that stocks will have a major comeback in the near future," he said.
Financials are starting to lead, as Utilities begin to break down. All it took was one of the most historic 6 week drops in the VIX ever to finally create a flip in market leadership.
Whereas emerging markets, when they opened the morning session weak would continue to be weak in the past, now buyers are stepping in causing many broad based overseas ETFs to outperform by end of day. On strong dollar days driven by improving economic data and expectations of Fed hikes, cyclicals power through. Risk-on is looking more and more risk-on. Risk-off then becomes exceedingly risky for asset allocators who have tilted their portfolios towards yield. Bonds and dividend plays from a buy and hold perspective may be in a world of hurt if this trend continues.
| Investment products included under CPFIS | You can invest using your CPF savings from | Product Information | Product Providers | |
| OA | SA | |||
| Fixed Deposits | ✔ | ✔ | You can approach the fixed deposit banks for more information. | |
| Singapore Government Bonds | ✔ | ✔ |
| |
| Treasury Bills (T-bills) | ✔ | ✔ | ||
| Statutory Board Bonds | ✔ | ✔ | List of Statutory Board bonds and bonds guaranteed by Singapore Government (Bonds included under CPFIS are indicated by a ‘Y’ under “CPFIS” column) | |
| Bonds Guaranteed by Singapore Government | ✔ | ✔ | ||
| Unit Trusts (UTs) | ✔ | ✔
Funds that are of higher risk are not included under CPFIS-SA
| ||
| Investment-linked insurance products (ILPs) | ✔ | ✔
Insurance products that are of higher risk are not included under CPFIS-SA
| ||
| Annuities | ✔ | ✔ | ||
| Endowment policies | ✔ | ✔ | ||
| Exchange Traded Funds (ETFs) | ✔ | ✔ | ||
| Up to 35% of investible savings can be invested in: | ||||
| Shares | ✔ | ✘ |
(Shares, property funds and corporate bonds included under CPFIS are indicated by a ‘Y’ under “CPFIS” column)
Admission Criteria:
| |
| Property funds | ✔ | ✘ | ||
| Corporate Bonds | ✔ | ✘ | ||
| Up to 10% of investible savings can be invested in Gold: | ||||
| Gold ETFs | ✔ | ✘ |
| |
| Other Gold products (such as Gold certificates, Gold savings accounts, Physical Gold) | ✔ | ✘ | Agent Banks (However, if you wish to buy new gold investment, you may approach UOB as only UOB offers this currently) | |
| a. | Risk Tolerance — Consider the amount of risk you are comfortable with and can afford to take. Are you able to handle temporary short-term losses in your investments? Do you have enough savings to absorb the investment risks? You can take the Risk Tolerance Questionnaire to better assess your risk tolerance. |
| b. | Investment Time Horizon — Consider the duration of your investments. Do remember that your CPF savings are meant for your retirement. Hence, they are generally for long term purposes unless you are nearing retirement or have a short-term investment time horizon for other reasons. |
| c. | Overall Financial Situation — Consider your financial commitments and the amount of money required to sustain your lifestyle during retirement. Do you have other assets set aside for retirement besides your CPF savings? How are these assets invested? |
I find it amusing? bemusing? when an investor sets a level of dividend yield they expect/prefer to see.
don't read this as negative.
i would invite the reader/investor to take a look at the historical dividend yields of amazon which also recently just jumped 50% off Feb 2016 lows. or look at the average dividend yields of US companies from 1950s til now.
then I will say I expect 10% bond yields just to entice you to go "huh?"
and end with "all yields expectancy cannot be detached from their historical context."
Table 6: Unleveraged Buy and Hold versus Unleveraged Moving Average Timing(October 1928 – October 2015)
When the stock market is in an uptrend (above its Moving Average), conditions favor leverage as volatility declines and there are more positive streaks in performance. When the stock market is in a downtrend (below its Moving Average), the opposite is true as volatility tends to rise.
We found that being exposed to equities with leverage in an uptrend and rotating into risk-free Treasury bills in a downtrend can lead to significant outperformance over time. For investors and traders seeking a destination with higher returns who are willing to take more risk at the right time, systematic leverage for the long run is one way of moving there, on average.
"I don't think we have enough evidence to justify these levels in the equity market at this moment," Fink said Thursday on CNBC's " Squawk Box ."
He said the recent rally has been supported by institutional investors covering shorts, or bets that stocks would fall, and not individual investors feeling bullish. "Since Brexit , we've seen ETF flows almost at record levels ... $18 billion of inflows," Fink said.
"However, in the mutual fund area, we're continuing to see outflows." What that tells you is retail investors are pulling out, he said. "You're seeing institutions who were short going into Brexit ... all now rushing in to recalibrate their portfolios."
Besides the stock mutual fund outflows, Fink said he's been seeing huge inflows in fixed-income products. "So you're seeing a risk-off trade, as we call it, around the world."
"I would not be surprised — I'm not predicting it — if somebody told me the 10-year Treasury is at 75 basis points, I would not be surprised ," Fink said. There's also $55 trillion in cash on the sidelines, he estimated. "You're seeing a massive reservoir of cash building up." Fink said extraordinary central bank asset purchases has been inflating stocks prices. "I don't think we should be at new [stock] highs," he said. "All the stock repurchases, you're seeing this reduction in investable assets."
