Reuters Investigates

Insight and investigations from our expert reporters

Steve Cohen and the law of big numbers

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By Matthew Goldstein

All too often the bigger an investment fund gets, the more difficult it is to continue to generate blowout returns.

Maybe the best example of a fund getting so popular and ultimately unwieldy is Fidelity’s Magellan fund.  One has to wonder if on a smaller scale, the same phenomena is happening to Steven Cohen’s SAC Capital Advisors.

As the below chart shows, Cohen’s now $13 billion hedge fund posted it most eye-popping performance numbers during its first decade of existence. Back then, SAC Capital had a fraction of the assets under management it has today and was considerably more nimble. It was back in those days when Cohen earned the reputation as the best trader of his generation.

However, more recently, as assets at SAC Capital have swelled, the returns churned out by Cohen & Co. have started to come back down earth. Overall, Cohen’s fund is still exceeding the industry standard. But the numbers SAC Capital is now putting up pale compared to Cohen’s track record.

from Environment Forum:

California hopes carbon market sparks innovation

OBAMA/California's lonely attempt to take on climate change by setting up a cap-and-trade market for carbon is all about jobs for many in the Golden State -- as shown in a Reuters Special Report issued today.

Carbon prices may jump high enough to send companies scrambling for new technology, whether it's carbon-free energy, efficiency widgets, or something yet to be cleaned up. Longtime clean tech advocate Dan Reicher, who has left Google's clean energy efforts to run a new Stanford center for energy policy and finance, sees a high price of carbon as great for investors and venture capitalists who back them.

China’s U.S. debt holdings make it a powerful negotiator

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Worrying about the power China has over the U.S. as America’s largest foreign creditor has become a national pastime. It’s a bipartisan issue in Congress and a favorite subject among pundits lamenting the decline in U.S. influence around the world. But could China really use its Treasury purchases to shape U.S. policy? Diplomatic cables released by WikiLeaks and obtained by Reuters suggest that has already happened.

Emily Flitter’s special report outlines a diplomatic flare-up between the two superpowers following the U.S. financial crisis. Chinese officials said they were worried about the safety of their U.S. investments. U.S. diplomats worked hard to ease the tensions, but the conflict ultimately led to the request of a personal favor by a top Chinese money manager in a meeting with U.S. Treasury Secretary Timothy Geithner.

ElBaradei: From nuclear diplomat to Cairo politics

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EGYPT/ELBARADEI-SQUAREWho is Mohamed ElBaradei, the professional Egyptian opposition figure who joined the ranks of disaffected Eypgtians to topple President Hosni Mubarak after thirty years in power?  Does the 68-year-old diplomat and lawyer have what it takes to become Egypt’s next president if it holds free and fair elections? 

Louis Charbonneau’s special report takes a close look at ElBaradei’s performance while at the helm of the U.N. International Atomic Energy Agency (IAEA), where he stood toe-to-toe with the Bush administration over Iraq and Iran. It tells how he survived a plot by hawkish U.S. politician John Bolton to oust him and went on to win the Nobel Peace Prize in 2005 jointly with the IAEA, the U.N. nuclear watchdog.  It looks into his questionable record as a manager while showing that he may have what it takes to lead Egypt — if he wants the job. 

The hurricane guessing game

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Unpredictable weather is making life difficult for insurers — see today’s special report: ”Extreme weather batters the insurance industry.”

By Ben Berkowitz

Every year forecasters at Colorado State University take their most educated guess as to how the next year’s hurricane season will unfold. It always draws headlines, but as history shows, that initial “best guess” is usually somewhat far off the mark.

Jamie Dimon: Good banker? Bad banker?

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The U.S. mortgage business is a “mess” in need of overhaul, JPMorgan Chief Executive Jamie Dimon reckons.

(See our special report on Dimon today: “Jamie Dimon wants some R-E-S-P-E-C-T”)

WikiLeaks, OpenLeaks, GreenLeaks and more leaks

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A Reuters exclusive details the emergence of two anti-corporate, WikiLeaks-style websites in Europe, both called GreenLeaks. The sites promise to leak confidential documents regarding environmental abuses by a host of industries.

The report by Mark Hosenball also reveals the rise of other possible WikiLeaks copycats that would focus on specialized topics or regions — from Russia and the European Union bureaucracy to international trade, the pharmaceutical industry and the Balkans.

In Gatsby country, tea and red ink

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TAXES/NASSAU-TEAPARTYLocated just east of New York City and the setting for F. Scott Fitzgerald’s novel “The Great Gatsby,” Nassau County makes an unexpected backdrop for a fiscal crisis. It is one of America’s wealthiest counties and, according to Forbes, it has the highest concentration of affluent neighborhoods in the United States.

But on Wednesday, New York state took control of Nassau’s finances, dealing a huge blow to Tea Party Republican County Executive Edward Mangano and a black eye for the Tea Party, the grassroots movement built around the core principles of constitutionally limited government, free-market ideology and low taxes. The county, which has vowed to battle the takeover in court, must now come up with a new budget.

A peek inside our layer

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We stepped into the new new Media Universe for our report on Augmented Reality, creating our own app which will alert anyone using it (iPhone or Android-phones only so far) when they are near one of the new movers and shakers of the business. It wasn’t so hard — you can see how we did it here.

But for anyone who jtarmo betterust wants an overview, here’s the contents of the layer we made and published through Hoppala (on a Firefox browser) and AR browser firm Layar. It’s our take on the movers and shakers in the AR industry, mainly linking to Twitter feeds, and Tarmo Virki is happy to learn of any updates. These entries are unadorned:

Boeing’s extreme outsourcing

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Today’s special report from Kyle Peterson takes an in-depth look at the development of Boeing’s 787 Dreamliner. Boeing went further than ever before in outsourcing much of the work on the plane, upsetting its unionized workers in the Seattle area. This graphic shows why.

So what’s the result?

A revolutionary, light-weight aircraft that is nearly three years behind its delivery schedule.