Warning signs learned
from hedge fund blowups: (1) managed by 1 person with no risk manager, (2)
lack of clear measures of leverage or liquidity in monthly reports, (3) track
record of less than 1 year, (4) strategy drift, (5) lack of transparency, (6)
lack of a key man clause, (7) fund grew assets way too quickly, (8) abrupt personnel
changes / resignations. [Note: there seems to be a statistical pattern beneath
all this isn’t there?]…Source: http://www.marketfolly.com/2013/02/avoiding-mistakes-in-hedge-funds.html
PacRe in the news on
Bloomberg: Focus is on Bermuda’s tax haven status: Bloomberg breaks that a
Bermudian insurance company, fund managers can defer the 39.6% ordinary income
tax and 20% LT cap-gain tax. The fund managers like SAC, Paulson, and
Greenlight essentially run at very low premium-to-surplus ratios while doing
their usual investing business. [Note: I thought their original intentions were
to tap into the uncorrelated leverage brought by reinsurance policies, maybe I’m
not entirely right. Funny how Bloomberg reports it now when such operations had
been happening for years]…Source: http://www.bloomberg.com/news/2013-02-19/paulson-leads-funds-to-bermuda-tax-dodge-aiding-billionaires.html
Same-Day Delivery Darling
Shutl Takes on Amazon’s Ground Game: option 1: “now” (90 minutes arrival);
option 2: “when” (pick a 1-hour delivery window any day, any time). But it’s
not a trucking company—it’s a software company that plugs store ordering and
inventory systems into one end of its platform and the extra capacity of
existing courier companies into the other end. Retailers pay Shutl a fee for
each delivery they coordinate. Source: http://www.wired.com/business/2013/02/shutl-us-launch/
95% of internet
information has no redeeming value: claims Robert Cottrell on FT. Here’s
the entire quote: “I don’t pretend that everything online is great writing. Let
me go further: only 1 per cent is of value to the intelligent general reader,
by which I mean the demographic that, in the mainstream media world, might look
to the Economist, the Financial Times, Foreign Affairs or the Atlantic for
information. Another 4 per cent of the internet counts as entertaining rubbish.
The remaining 95 per cent has no redeeming features. But even the 1 per cent of
writing by and for the elite is an embarrassment of riches, a horn of plenty, a
garden of delights.” He then goes on recommending tons of good sources. [Note:
My God, Thank you Rob]…Source: http://www.ft.com/intl/cms/s/2/009050e4-75ea-11e2-9891-00144feabdc0.html#axzz2L2LJmMwS
What data can’t do: It’s
a follow-up by the author a few weeks ago, and I really appreciate his insight:
Data struggles with context and cannot match suppleness of narratives and it
tends to create bigger haystacks that bury true insights. [Note: like any
mental models, it’s just another tool of thinking—one that deserves neither too
much credit nor discredit]…Source: http://www.nytimes.com/2013/02/19/opinion/brooks-what-data-cant-do.html?partner=rss&emc=rss&_r=1&
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