January 2008
24 posts
1 tag
Internal Hedge Fund Platforms: Get the Model Right...
Trashing in-house hedge fund platforms is currently all the rage. And why not? They had a bad year, no? This from today’s Institutional Investor’s emii.com:
Poor performance by in-house hedge funds launched by investment banks and the like may lead some big Wall Street names to exit the field, Dow Jones reports. While many a top hedge fund enjoyed returns that outperformed the...
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Market Mania: Why it Makes Sense to Stand Back -...
Here are some assorted headlines from my current Bloomberg screen:
“Stocks in U.S. Rally After MBIA Says It Expects to Keep AAA Credit Rating”
“U.S. Personal Spending Slows, Jobless Claims Rise, Boosting Rate-Cut Bets”
“MBIA Says Capital is Adequate, Rejects Bankruptcy Speculation; Shares Rise”
“Bristol-Myers Posts Loss as Subprime Investments...
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The AMA, the FDA and Ratings Agencies: Conflicts,...
Money is a very powerful motivator. And this can inure to the benefit of the individual and to all of society. Unless it doesn’t. Like when there are clear conflicts of interest, where a financial payoff is received based upon performance that could be compromised due to self-interest, and where the conflicted party’s actions can hurt those whom they are purportedly supposed to be...
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Lessening the Reliance on VaR: It's About Time
Taking a new approach to quantifying risk: it isn’t just for Taleb zealots any more. And when such a move hits mainstream, you know something big is afoot. Bloomberg ran a pretty informative article today on the shift in risk management practices among investment banks, and how a firm’s stated VaR (Value at Risk) did not necessarily relate to how badly they were hit in the recent...
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"How to Lie With Statistics" a/k/a Ben Stein's...
This is the title of a legendary book written in 1954 by Daniel Huff. In short, it explains to the layperson how they can be misled by the way information is presented, how those serving up the figures can be economical with the truth and to generally be on guard when consuming numbers, charts and graphs. Well, my bells were going off as if I were in the midst of a five-alarm blaze as I read Ben...
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The Pier 40 Rally: You, the Community, Made it...
So today was the rally. At least 1,500 people made it out on a winters day to celebrate the Pier, its place in our community and the amazing people and institutions that make up Downtown NYC. We had incredible, supportive politicians representing our district - Assemblywoman Deborah Glick and State Senator Marty Connor. We had Mario Batali, a downtown fixture, a world-famous chef and restauranteur...
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What has the Credit Crisis Taught Us?
I have read a lot of different views concerning the credit crisis, the market dislocations in its wake, and the lack of confidence in the Fed’s ability to materially cushion the blow of the inevitable unwinding that will ensue. None has really brought it all together for me, however, in a way that looks at both the strengths and weaknesses of current market structure and regulatory regimes...
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Saving Pier 40: The Power of Community Activism
Almost nine months ago, over 1500 people of all ages came to PS 41 in Greenwich Village to hear about plans for repairing and rebuilding Pier 40. And tomorrow, hundreds of people are going to show up on a winter day to celebrate Pier 40 and rally around a cause that has served to further bond an already tightly-knit community, keeping Pier 40 as a park - forever.
The Event
This rally will be...
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Why Investment Banking Mergers Stink
This morning, DealBook linked to a Breakingviews piece on rumors of Credit Suisse possibly buying Bear Stearns. I immediately broke into a cold sweat even considering the possibility. Why? Because investment banking mergers are quite simply one of the most efficient ways of destroying the buyer’s shareholder value, especially when one considers the probabilities of a deal actually being...
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Alternative Asset Managers and Down Market Cycles:...
The equity market has been a roller coaster, characterized by bone-jarring volatility and single-stock blow-ups that are enough to make even the most steely-eyed hedge fund manager cringe. And private equity firms have seen arbitrage spreads explode, fueled by the knock-on effects of broken credit markets and concerns over whether the PE firms or the banks will walk away from agreed-to...
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Tuesday's Investment (and Life) Advice: Stop,...
People are freaked. Asia’s been smashed. Europe is in the toilet. And the US recovered from an early morning swan dive thanks to the Fed’s 75 bp easing, yet the credit markets aren’t exactly buying it (I mean, has anything really changed in the wake of more accomodative Fed policy except to telegraph their deep concern over the state of the economy?). In short, the “deep...
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Who REALLY Benefits from Volatility
Most articles on volatility, its genesis and characteristics, are quite scholarly yet fail to drive home a simple yet essential point: the key beneficiaries of volatility are those with liquidity and an understanding of value, plain and simple. I’m not talking about flow traders who want volatility so they can capture more bid/offer spreads, or position traders who swing for the fences in...
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(Economic) Reality Bites
I generally write about the economy and the markets from my little ivory tower, throwing stones, feeling frustrated and getting critical even though I am largely immune from the day-to-day impacts. Gas at $3.50 a gallon? It sucks, but I can handle it. A carton of orange juice that costs me $5 bucks? Irritating, but it’s not going to change my life. Even a domestic stock market that is down...
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Clear Asset's New ETF Contest: School Support...
The first Clear Asset Management ETF contest was a huge success. Over 100 entries. Dozens of great ideas. One big winner with ten other winners. It was so successful that Clear Asset is going to do another contest starting February 25th, but wants to broaden the schools from which to draw ideas. The first contest involved Columbia, Lehigh and NYU. Three great schools. Clear Asset would like other...
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Monitor110 has a New CEO
So it’s official: Monitor110, the company I have helped build and lead over the past three years, has announced the hiring of a true world-class financial technology leader, Brennan Carley. His hiring is the result of a thorough search process that yielded several impressive candidates, but none possessing his unusual and powerful balance of technology expertise, strategic thinking, Wall...
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Compensation and Retention: Wall Street and...
Attracting and retaining the best. This is the lifeblood of fast-moving, innovative fields like Wall Street and technology. And equity participation is a key vehicle for both aligning employee and shareholder motives as well as creating “golden handcuffs” though vesting provisions. The problem is when the music stops: this could be due to the cooling of a rapid-growth phase and...
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My Advice to College Students: Pursue Passion
College. The best of times, the worst of times. The best because of the friends I made (including my future wife), the fun I had, the independence it afforded me and the credential it gave me to pursue the career of my choice. The worst because I was academically immature, spiritually unable to take advantage of a once-in-a-lifetime learning opportunity, too focused on getting my yah yahs out and...
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The Depths of Wall Street Balance Sheet...
This week gave us several new announcements of massive capital requirements, funds needed to bolster eroding Wall Street balance sheets. These revelations came as no surprise. And my sense is that we might finally be getting a handle on the magnitude of the losses truly sustained by the largest broker/dealers, amounts that are at least 2x larger in aggregate than we were led to believe at the...
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The Wall Street/High Tech Disconnect - Or is it?
This year’s coverage of the Consumer Electronics Show (CES) has made one thing clear: people, or the media, at least, have gotten blown away and disgusted by its sheer scale. What can you possibly glean from the football fields of booths and swarms of visitors at a show that has now come to reflect the noisiness and confusion of the Internet? I agree, it is hard to figure out what is of...
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Alpha Today, Gone Tomorrow?
Is alpha going the way of the buggy whip? Short answer: no. It is simply that the alpha generation game has changed, and has certainly become more competitive. Is the ability to extract alpha from conventional sources of information becoming harder? Of course - with more managers staring at the same news and data and more dollars chasing the same trades, what would you expect? And Reg FD in the...
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Leveraging the Collective Brain: The First Clear...
And it was a big success. Clear Asset’s CEO, Andrew Corn, wrote a detailed post on the contest and announced the winners on his blog. He received dozens of submissions, many of which were of extremely high quality. I know that selecting the first place winner was an extremely difficult task for Andrew and his portfolio management team. And this first test case was limited to three schools -...
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Ace's Terrible, Horrible, No Good Very Bad Day:...
Poor Ace Greenberg. Here is a guy - no, a legend - that helped shape the world of block trading and merger arbitrage on Wall Street. THE guy corporate chieftans and major investors would call when they needed to accumulate or move a large chunk of stock. An incredibly philanthropic guy, a guy that forced charitable giving among the most highly compensated members of his firm. He didn’t say...
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Money:Tech 2008: Be There or Fall Behind
Some of you have heard about the Money:Tech 2008 conference in New York February 6th and 7th. Paul Kedrosky has a really good post about it that went up today. I am also participating in the program, joining an illustrious panel of investment professionals (how I got included I’ll never know) including Stewart Alsop of Alsop Louie Ventures, Cary Davis of Warburg Pincus and Bruce Golden of...
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Healthy Blogging in 2008, Ok?
Hi, everyone. It has been a much needed hiatus from blogging, hanging on my PC, and just generally thinking about business, deals and staying current much of the time. Not that I didn’t check my Blackberry, take some calls, and read the Wall Street Journal and the New York Times on occasion, but I was operating at about 20% of my normal fevered pitch. I thought it might kill me. But it...