Sun 3 Dec 2006
For the latest random news articles on hedge funds, Pfizer, REITs, and more…
There’s a good article at Bloomberg on Hedge Funds, and how Goldman is now the largest hedge fund manager out there.
One interesting quotes from the Bloomberg article… one fund “targets a return of 5 percentage points more than T-bill rates. In 2003, that figure was 6 percent. On Nov. 8, with T-bills yielding 5.1 percent, it was more than 10 percent.” Wait a minute, your investors were paying you 20% of the profits to earn a 6% return?
Pfizer is stopping development of their cholesterol drug torcetrapib. Expect to see some volatility in the indexes on Monday if PFE plunges as it is a member of the Dow, S&P 500, and S&P 100 (OEX). And with a market cap of $200b, it is (or was) the 5th largest component of the Dow.
The sale of EOP to private equity by Sam Zell may signal we’re near a top in REITs… Zell has a reputation as one of the smartest investors out there… From Dennis Gartman’s eponymous letter (quoted from a second party):
We said last week that from two or three years hence, the private equity ?boys? will wonder how it was that they allowed themselves to be so thoroughly and completely taken by Sam Zell who sold them his REIT at a price they themselves inflated.
Zell’s shareholders will look back and say that few corporate managers had secured such value for their shareholders as had he; the buyers, on the other hand, proved to be the weak hands that Zell’s strong hands sold into.
A while back I owned shares of JOF, the Japan Small Cap Fund. I’ve since sold my shares of JOF and moved on to prefer and own EWJ instead… but for some reason I keep getting proxy vote requests from JOF — including an overnight DHL package and phone calls asking me to vote! Yet another reminder why corporate actions are expensive (even for a closed-end fund).
December 3rd, 2006 at 2:36 pm
Another random tidbit… Schwab (www.schwab.com/lending) is offering 1/4% rate discount on some loans for current broker customers. Shopping for a loan? Consider opening up a brokerage account to get the rate discount…
December 4th, 2006 at 10:35 am
Related to your comment, Merrill Lynch (and others, I’m sure) allows you to use your mutual fund holdings as your “down payment” on a house, which is quite clever since it keeps you fully invested (and they can collect fees on your money) and you are incentivized to pick them for your mortgage. Plus, they end up with a rich collection of data on your investment and loan repayment habits to use for future marketing and customer analysis purposes. A friend on mine used their substantial mutual fund holdings at Merrill Lynch (given over the years by their parents) to get a 100% house loan for their first home over 6 years ago, back before 100% financed home loans were fairly common.