Breakingviews

Investors struggle to find true safe havens

August 26, 2015

Boltholes like U.S. and German bonds or the Swiss franc are benefiting less than might be expected amid equity swings and concern over a slowing China. Investors are rightly wary of once-safe assets that have moved erratically of late. The mystery is where they are going instead.

Bond turmoil signals new era of return-free risk

May 15, 2015

Forget the risk-free rate - investment safe havens are in short supply. Cash can be costly. Gold is a dollar proxy. And recent gyrations in the largest debt markets have undermined the concept of risk-free returns. When this last compass fails, investors are really at sea.

Biggest risk of geopolitics is as a distraction

By Edward Hadas
June 26, 2014

Fears that war and foreign policy chaos will disrupt the global economy have insidiously crept into the minds of investors, Barclays discovered. In reality, despite deterioration in the Middle East, the global balance is broadly positive. There are bigger things to worry about.

M&A targets can get stiffed when they “go shop”

May 23, 2014

The tactic of seeking bids after signing up a buyer is meant to ensure top dollar. More often, it leads to low offers and sale prices, new research shows. Deals like Media General’s buyout of Lin Media suggest sellers are wising up, though, portending better value for investors.

Hedge fund customers’ yachts washing further away

May 14, 2014

The flood of money – now $2.7 trln – in hedge funds has squashed returns below public stock markets. Private equity doesn’t seem to be doing much better. Both investing styles intuitively offer finite opportunity, yet fees encourage managers to hoard assets. Investors beware.

Rob Cox: The worry now is a brewing M&A bubble

May 13, 2014

The corporate urge to merge has gone into global hyper-drive. Activity has surged as investors egg companies on and bid up the shares of acquirers well beyond mathematical prudence. When new metrics to justify the irrational are trotted out, it’s time to exercise caution.

A CEO’s phone mannerisms can reveal fibs

February 7, 2012

All it takes is a shaky delivery or uneven tone on an earnings call, new research suggests. They’re among the signs that a company boss is being economical with the truth. It’s not reliable enough to land anyone in jail. But investors seeking an edge may want to listen closely.

High yield U.S. tourists sail into European storm

February 16, 2012

The European Central Bank’s cheap money and the siren call of high yields are luring global investors into the European junk bond market. But the region’s slowing economy could suck the wind out of the market’s sails.

Iraq offers investors ultra-high risk-reward bet

February 20, 2012

When war ends, investment opportunity begins. There has been enough peace in Iraq for the Baghdad bourse to rise 32 pct over two years, outperforming bigger Middle East rivals. The risks are huge, but reconstruction, demographics and oil make this frontier market tempting.

Review: Flawed defence of the good of finance

By Edward Hadas
March 16, 2012

Robert Shiller is better placed than almost anyone to show that finance can be a force for the good. The Yale professor has imaginative ideas about products which share risk and make finance more democratic. But his latest book doesn’t show Shiller at his best.