Oddly Relevant Dec-4-2012

The big long in the housing market: With housing prices stabilizing since 2009 trough, here are a few ways to play it: (1) Invest in mortgages (perhaps with tax-efficient structures), but this is very susceptible to interest rate risk, (2) Buy houses, mostly from foreclosure auctions. While hard to manage, another plan is to fix them and open them up for rental, (3) Long shares in housing related stocks. [Note: Key is, the interest rate MUST stay low]…Source: http://www.economist.com/news/21567388-new-generation-investors-betting-americas-housing-market-big-long

Matthew Eagan’s take on Fixed Income in 2013: (1) Yield chasing will continue, perhaps now into CMBS & CLO; (2) Expect the end of HY run; (3) mid-November’s 57bp HY-LL yield spread suggests LL will be preferable next year; (3) UST rate explosion unlikely as everyone braces for the next crisis; (4) Agency derivatives could experience exponential growth; (4) Mortgage REITS likely to be poor investments going onward as prepayment accelerates based on low rates environment. [Note: Will the money flow back into structured credit derivatives?]…Source: http://pragcap.com/pondering-fixed-income-in-2013

Investors attempt to call a bottom in China via ETFs: The discount investors enjoy when buying the Morgan Stanley China A Share Fund (CAF), shrunk to 1.3% as of last night, v.s. the 52-week average of 9%. The Greater China Fund (GCH) shows a similar pattern, with a 3.8% discount that’s less than half the average the last year. [Note: Arguably, investors are better off investing in ADRs instead of buying ETFs]…Source: http://blogs.barrons.com/focusonfunds/2012/12/04/china-closed-end-fund-discounts-are-evaporating/

Cracking the code of genetic patterns: once believed that as much as 99% of human genome is “junk”, the science community recently suggests that almost 2/3 of human DNA is being copied into molecules of RNA, probably most of them not used as blueprints of protein creation. A particular kind, lincRNA, for instance, is indicated to regulate the activities of other genes and vastly differs amongst speices. [Note: A more structured and punctuated means to mutation, I eagerly await more]…Source: http://www.economist.com/news/science-and-technology/21567314-recently-discovered-class-gene-may-help-regulate-embryonic-development

What is boredom? In short, one is bored when the task at hand (1) requires focus but (2) one is unable to engage. In other words, Boredom has at its core the desiring of satisfying engagement but not being able to achieve that. [Note: the cure to ADD could then be not only to eliminate distraction, but also increase the feeling of engagement satisfaction]…Source: http://bostonglobe.com/ideas/2012/12/02/could-boredom-curable/Mz1W0a5jfyrtTH9wZgdFVI/story.html