Dear HedgeRoll readers,
We will be celebrating the holidays until January 2011. Until then, enjoy the video below.
All the Best,
WSJ.com: Hedge fund titan Paul Tudor Jones III spreads a little Christmas cheer around Greenwich, Conn., each year. Well maybe more than just a little.
One of my least favorite trends is referring to items which have traditionally been consumption items as "investments". When I was shopping for an engagement ring for my (now) wife, the sales clerks frequently referred to diamonds as an investment. Needless to say, we had a difference of opinion.
I recently came across a May 2010 interview with Seth Klarman of the Baupost Group, value investor extraordinaire. He nicely summarized my thoughts on the matter:
“Buying anything that is a collectible, has no cash flow, and is based only on a future sale to a greater fool, if you will—even if that purchaser is not a fool—is speculating. The “investment” might work—owing to a limited supply of Monets, for example—but a commodity doesn’t have the same characteristics as a security, characteristics that allow for analysis. Other than a recent sale or appreciation due to inflation, analyzing the current or future worth of a commodity is nearly impossible.
The line I draw in the sand is that if an asset has cash flow or the likelihood of cash flow in the near term and is not purely dependent on what a future buyer might pay, then it’s an investment. If an asset’s value is totally dependent on the amount a future buyer might pay, then its purchase is speculation. The hardest commodity-like asset to categorize is land, an asset that is valuable to a future buyer because it will deliver cash flow, not because it will be sold to a future speculator.”
Bloomberg: Electricity across four Nordic countries for the next quarter jumped on Dec. 13 to its highest level since 2006, after advancing 27 percent last month. The surge gave Nordic Power Trading F.M.B.A. a 29 percent return in November, while Norwatt Energy AS’s fund rose 6.6 percent, topping a Bloomberg survey this week of nine funds that together manage at least $268 million.
Institutional Investor: Centaurus Energy’s John Arnold is poised to suffer by far his worst year since launching his roughly $5 billion hedge fund eight years ago.
The super secretive former Enron energy trader is actually losing money this year; he was down 2.7 percent through October despite a 7.9 percent gain that month, according to knowledgeable sources.
As a former municipal bond analyst, I agree that expiration of the BAB's program would be quite unusual.
This blogger thinks it is the next black swan. Too bad you can't short muni's.
Full disclosure: I am long MUB.
David Einhorn sat with Charlie Rose on December 6th. He spoke extensively on the global economy, Apple, and why he loves investing. Watch the interview here.
This is the personal blog of Emory Redd.
This blog is not investment advice. This is not a solicitation to invest. Don't take candy from strangers.
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