We are often asked why we don’t preach the “endowment style” of investing that is prevalent with many other online investing sites. Our response always is the same: “Why on Earth would we want to lose money?” Sure, saying you are investing like Harvard and Yale sounds great for marketing purposes. These are supposed to be the smartest guys in the world. But well informed investors know that most of the top endowments have blown up over the last few years. Harvard and Yale have endured catastrophic losses, that they will need a generation to recover from. Another problem with mirroring endowments, is that they invest largely in illiquid assets like real estate and private equity, which are hard to replicate using ETFs.
The bottom line is we implore retail investors everywhere to be careful of the marketing hype that exists online when it comes to endowment investing. Please do your research before you dive in head first. Here is a list of the largest 2009 College Endowment losses:
http://www.cnbc.com/id/35199757
- Chanos- Crazy, or Brilliant?
Jim Chanos, famed contrarian investor has made a lot of noise recently, with his proclamation that China is on the brink of collapse. Everybody thought Jim was crazy, until a few weeks ago when China surprisingly announced it was putting in bank restrictions to curb lending and try to tighten the countries purse strings. So maybe he’s not so crazy after all:
Bubbles are best identified by credit excesses, not valuation excesses. And there’s no bigger credit excess than in China.”
We happen to agree with Jim. China, like every other booming economy throughout history eventually grows too fast and faces a large speculative shock. There is no data that would make us believe otherwise. Whether this happens in 3 years, or 30 years is anyone’s guess. Some would argue, this collapse occurred in 2008, when the Chinese market was pummeled. But it would take a prolonged crash for China to truly be in a depression. And their stock market was on a tear last year. The key maybe in how the Chinese real estate market turns….
http://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-planning
Lots of chatter recently about the imminent collapse of the EU, in response to the economic demise of Greece, Spain, and Italy. If that happens, it will make some currency and bond speculators very rich. Here are some great reads on the subject, from MoneyNews and Nouriel Roubini-
http://moneynews.com/StreetTalk/spain-euro-zone-roubini/2010/01/27/id/348162
http://moneynews.com/StreetTalk/EuroZone-Collapse-EconomicWeakness-/2010/01/05/id/345384
Peter Thiel, one of the most influential guys in the entrepreneurshipworld, also happens to run a big hedge fund- Clarium Capital. They have had a rough few years, posting a 5% loss in 2008, after being up big in the first half of the year, then in 2009 being down over 25%. We wish Peter and the rest of the Clarium team all the best. They are good investors and hopefully can recover from their recent slump…
We have opened our new exciting Advisor Platform in private beta. There has been great feedback so far. Some of the features of the platform include-
- live position summaries, news, interactive risk, performance,
- firm-wide analytics, alerts, graphs, chart
- 10 sophisticated analytical tools including portfolio dissection, exposure, backtesting, event studies and scenarios
- Access to the Hedgeable Funds
- Proprietary research and 3rd party reports
- Live Global Heat Map, News, Alerts
- Live Television
If anyone wants to take part in the Beta test please let us know. The minimum amount of money that one must manage is $5 million.
We are excited to announce that we will be releasing the Hedgeable Advisory Suite in Private Beta on February 1. The Platform is going to have even more features than we first announced a few weeks ago. If you have not been in touch with us regarding the free 30 Day Free Trial, please contact us at info@hedgeable.com. Please remember that the Platform is only available to those who manage over $1 million.
- Is it the end of the line for the E*Trade Babies?
Just when I was looking forward to some dancing/talking babies during the SuperBowl, it is becoming very apparent that E*Trade is imminently going to be sold. Is TD Ameritrade going to make another deal in 2010? That is the most likely candidate to buy E*Trade. When you think discount broker you immediately think E*Trade, in fact they are almost synonymous with the discount brokerage market. But most people don’t know that they have really struggled, almost going belly up a few times. They are neck deep in debt and had billions in toxic mortgages on their books. They do have a really good brand name and about 1-2 million users (TD has over 6 million), so it would be a nice acquisition for TD. We shall see how it all pans out….
Cake Financial has a last second firesale to E*Trade
Cake Financial has officially closed up shop, announcing a last second firesale to E*Trade yesterday. We are assuming it was a firesale, because Cake had been struggling seen launching a few years ago, but we don’t really know. The social investing space has become really crowded, with Covestor and Kaching both in the mix. We wish Stan Carpenter and the Cake team the best of luck. Hopefully they got a nice deal and get preferred shares of stock from whatever company buys E*Trade (more on that in a minute).
We have completely redesigned the interface and navigation on the account screen. Hopefully the display is now cleaner, fresher, and more graphical.
The New Account Dashboard
View of New Account Dashboard with Position Summary
Happy New Year everyone! In 2010 we are hoping to really take Hedgeable to the next level. Here is what we are planning for the first month of the new year:
- Advisory suite to be rolled out free for 30 days to the first 100 lucky advisors who contact us. Release date toward end of January.
- Brand new user interface for the account screen with a more graphical display and an account dashboard- it will be sleek, functional, and much improved! Release date toward the end of January.
- New interface on edit portfolio screen where users of Dynamic Advisor can add/subtract securities and cash automatically, without emailing us. Release date middle of January.
