I’m working on my quarterly reshaping — where I choose new companies to enter my portfolio. The first part of this is industry analysis. My main industry model is illustrated in the graphic. Green industries are cold. Red industries are hot. If you like to play momentum, look at the red zone, and ask...
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11) I was surprised to read that there is not a perfect market in interest rate swaps. They are so vanilla, but counterparty risk interferes. 12) There is always a skunk at the party, and who better than Baruch to dis bonds? I half agree with him. Half, because the momentum can’t be ignored...
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1) Start with the big one from yesterday. On of my favorite monetary heretics, Raghuram Rajan, whose excellent book I reviewed, Fault Lines, pointed out how he had gotten it right prior to the crisis, versus many at the Fed who blew it badly. Rajan suggests that Fed Funds should be at 2-2.25%, which...
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Oh, not more UK inflation-indexing shenanigans.Courtesy of Barclays Capital, here’s a quick update on the RPI-to-CPI indexation imbroglio that’s broken out in the UK...
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1) I am not a Treasury bond bull, per se, but I am reluctant to short until I see real price weakness. And some think that I am only a fundamentalist value investor. With bonds, it is tough to catch the turning points, and tough to grasp the motivations of competitors. Better to miss...
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Aviva and RSA have set tongues wagging, obviously. Legal & General had pushed up just under 3 per cent in London at pixel time, on trader talk of interest from Zurich:Legal &...
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Aviva confirmed on Monday that it hadn't given so much as the time of day to the recent £5bn offer from RSA for its general insurance business -- for reasons that were probably...
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Share-price action in Aviva on Friday, after Sky News reported that it had, in recent weeks, rejected a surprise £5bn RSA offer for its general insurance arm:Aviva declined to comment,...
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After 9/11, and and before the merger was complete on 9/30/2001, our investment team got together and came to an unusual conclusion — 9/11 would have little independent impact on the credit markets, so be willing to take credit risk where it is not well-understood by the market. We bought bonds in hotels, airplane...
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I’ve read a number of articles on hedging tail risk of late. Most of them were pretty good; I just want to add in my thoughts. For those who haven’t read the articles, tail risk is when even safe investments get hit hard. Those market outcomes are rare but severe, so some people look...
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