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Money managers under the microscope
Hedge funds: Turning cautious
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It may not exactly be time to panic, but it’s interesting nonetheless to note that some European hedge funds have been cutting back some of their stock bets, particularly on U.S. and European stocks.
The general concern seems to be economic growth in the West and in particular the outlook for banks, whose higher funding costs are eating away at margin gains on the lending side, according to Crispin Odey.
Funds made bumper gains of 20.12 percent last year (according to HFR), and while this didn’t completely wipe out losses in 2008, it reminded investors that hedge funds can make money (albeit on the back of a bull market).
With major concerns over the strength of the economic rebound still lurking, funds may, rightly or wrongly, find it easier to take off their bets and sit on their hands — after all, gains of 20 percent (in 2009) or so still look pretty good spread out over two years, and, as they learned during the credit crisis, big losses can take you a long way from your high-water mark and could persuade investors to leave.
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If the time horrizon is just this year….yes, it is not a good time to buy stock in China……This is a year of consolidation……not a good year of short term bullish speculation…….
But if you are true investors….ie investors for the long haul, the China phenomenon is not a bubble. They are not building a road to nowhere……They are building highways, power plants, dams, reconstruction of earth quake……What bubbles ?
Trouble is LeeSiuHoi… even the cheerleaders of China investment acknowledge they helping to blow a speculative bubble and are only hoping to be among the first to get out as the pinprick nears. It’s pretty obvious though that the long-term story is strong. Latest evidence is our story on Algebris hunting for HK and SG venues for an Asia office.. See here for that story