Market exuberance on many fronts. Margin debt near peaks, stock prices at all-time highs, and “junk bond yields” near record lows, vaccine rally aggregate larger than March declines, Tesla's P/E ratio (TTM) above 1000. Guess there is a lot you can do with 14 trillion in global liquidity and investors who simply can't afford high cash levels.
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Some quotes first:
1. Activist investor Jeff Ubben has left ValueAct Capital, the $16bn hedge fund he founded, to launch a new environmental and social impact investment company.
2. „Companies, as governed today, with investors asking for more current returns and more buybacks and so forth, aren’t working for society or nature,“ he said. „But I have to prove that there’s a return [in long-term impact], because otherwise . . . you’re not really changing anything.“ <..> „Finance is, like, done. Everybody’s bought everybody else with low-cost debt. Everybody’s maximised their margin. They’ve bought all their shares back . . . There’s nothing there. Every industry has about three players.“
3. Having an impact fund and a traditional fund under the same roof at ValueAct was „confusing“ for investors, Mr Ubben said. Those who opted for the impact vehicle worried they were leaving returns on the table, and those who opted for the flagship fund worried that about being portrayed as environmentally or socially „unconscious“. „I don’t think these two strategies peacefully coexist,“ said Mr Ubben.
Second, that was the essence. If RE investments are driven by "location", "location", "location" mantra, then in "ordinary" investing it is not only "return", "return", “return" anymore. I have been following for the last few years already an emerging and quite fast growing trend in hedge funds space to invest if not "for" then at last "with" social and/or environmental impact in mind. And that will benefit all of us. Even those who are far away from investing.
#bitcoin #cryptos #CryptoFunds
Yes, you noted it correctly, the post below is on crypto funds. You might start saying cryptos are for dummies, any rational investor should avoid them, they have no any value and it's just a speculative bubble.
Pause here for a second. For as long as investors do allocate a portion of their portfolios to crypto currencies, tokens and / or crypto funds it's worth taking a look at the different alternatives and their performance. Last year I invested myself into 1 crypto currency, 1 crypto fund and 1 token directly. Traded few more. A fund employs a long/short strategy and I want to be ready when the recent bubble bursts from it's short side (or gain further if it continues from it's long side). Token is a spicy ingredient in my portfolio with tenfold raise since my first investment in May'20. Cryptocurrency is 1:1 backed by USD and yields 22-26% p.a. with daily payouts. Nothing to compare to 10x over 9 months, but still mind blowing if you compare to ''cash'' yields.
What about fund performance then? A fund I'm invested with still has a too short track record to draw any meaningful conclusions. So let's take a look at the whole market.
As per Crypto Fund Research, crypto funds were again the hottest investment managers in 2020, gaining more than 160% on the year. However, bitcoin performed significantly better than the CFR Crypto Fund Index, which measures the performance of a basket of 70+ crypto funds.
So did crypto hedge funds actually underperform? As in any case where you don't now a quick answer but still want to look smart enough, you say "It depends". So the answer to the last question is ''it depends''. And let me explain why.
Crypto hedge funds, as many other funds, are supposed to manage risk in the sometimes extremely volatile markets. As you know, cryptocurrencies and volatility go hand to hand. This typically results in significant outperformance when Bitcoin and other cryptocurrencies decline and underperformance when they rise considerably as they did in 2020.
Crypto funds also operate a number of strategies - some strategies like arbitrage are essentially market neutral and will almost always underperform a long-portfolio in bull markets and outperform in bear markets.
In fact, since the beginning of 2017 crypto funds have gained 2,812% vs. 2909% for Bitcon (Crypto Fund Research's calculations). Over multiple market cycles, crypto funds have kept pace with Bitcoin's gains. But here's the important part... they've done so with far less volatility than Bitcoin. And this is exactly what all investors hope for.
Crypto funds' ability to manage risk was never more clear than during 2018's "crypto winter". While Bitcoin's price fell 75% from its peak. Crypto funds lost less than 50%. While most investors don't cheer a 50% loss, they likely took solice knowing had they been fully exposed to Bitcoin they would have lost far more.
Still, crypto funds are a risky investment and most suitable for institutions and sophisticated investors. Thus, have a double or even triple eye when selecting particular fund and stay well invested.
Electric Vehicle Investment Roadmap
- Electric Vehicles (EVs) are an emerging set of technologies with enormous potential to transform transportation.
- As such, EV companies represent significant opportunities for investors who can determine when and where to invest in this complex market.
- This article provides an investor roadmap to more than two dozen varied investment opportunities.
- These opportunities go beyond investing in Tesla, and look at the auto manufacturers, new US start-ups, Chinese EV companies, and supporting industries.
- As in all investments, considerations of the companies strategies, valuations, and investment timing are critical; especially with the volatility of these investments.