| The Investment Column: Barclays investors should keep faith after ABN ...
In normal times, Barclays' shares would have bounced in the last few weeks after it lost out to Royal Bank of Scotland in the battle to buy ABN Amro. Instead, the bank's stock has fallen 12 per cent since 5 October, the day before it conceded defeat. Barclays is not the only bank whose shares have suffered in the credit crunch. But Barclays is of particular concern because the success of its Barclays Capital investment bank has been closely identified with the booming credit markets that seized up in August. The investment bank Credit Suisse restarted coverage of the stock yesterday with an 8 per cent downgrade to 2007 earnings, based on higher funding costs and expected reductions in trading and investment income. Bob Diamond, who runs BarCap, has done the rounds to remind investors that his business does commodities and foreign exchange as well as leveraged finance and structured credit.
Asian stocks up on rate cut hopes; commodities hot
SINGAPORE: Stocks rallied on Thursday as solid earnings and expectations of further US interest rate cuts outweighed worries about inflation even as oil hit a record high above $101 a barrel. Gold also hit a record above $945 an ounce, and silver touched a 27-year high, as funds poured into a wide range of commodities, betting they will outperform in an environment where growth is slowing and prices are rising.
Data on Wednesday showed a faster-than-expected rise in US consumer prices last month and further weakness in the housing market there.
"The US is entirely focused on the economic data that is coming out and we're getting revised forecasts for their economic growth in the downward trend," said Savanth Sebastian, equities economist at CommSec in Sydney.
Working Paper Synopsis: The Search for the Beta of Commodity Futures
In accordance with the principles of modern portfolio theory, sophisticated investors have increasingly sought to diversify their portfolio through the use of alternative investments. An "alternative investment" is generally regarded as supplementary assets or trading strategies other than long-only exposure to "traditional assets" such as stocks, bonds and/or cash. Alternative investments include various assets such as commodities, currencies, emerging markets and private equity, as well as a variety of trading strategies such as convertible arbitrage, distress securities, global macro, long-short equities, managed futures, short selling, etc. Adherents commonly assert that alternative investments has (i) a low to negative correlation compared to traditional investments, (ii) historical performance which reflects the potential for attractive positive expected returns, and (iii) is capable of acting as a hedge against inflation.
S. Wade Hansen
Hansen's articles have appeared in Technical Analysis of STOCKS & COMMODITIES magazine, BusinessWeek's Investor Education program, and CNBC's Investor Education program. He has been investing in the Forex market for years and has been a featured speaker at multiple Forex-trading workshops and seminars. He has also helped train tens of thousands of investors as the cocreator of the INVESTools Currency Trader, Advanced Options, and Advanced Technical Analysis education programs. .
Culling weak funds will strengthen ETF herd
The long-expected culling of the weak has begun in the world of exchange-traded funds. Eleven duds listed in the U.S. market are being closed and the safest bet on the stock markets right now is that more of these mutual fund alternatives will bite the dust before long. "We've always thought that the next bear market – and we're probably in one right now – would eliminate a lot of the duplicate funds and the esoteric funds," said Tyler Mordy, director of research at Hahn Investment Stewards & Co. Bring it on, baby. Closing ETFs addresses the confusing glut of products, while the impact on people who actually own doomed funds is minimal, other than a potential tax hit. ETFs are stocks that provide a clean, cheap way to buy the returns of hundreds of stock indexes and commodities.
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