In emerging markets, something bad happens every 3 to 4 years, and something very bad happens every 7 to 8 years. Bad things tend to happen when periods of high growth store up imbalances which accumulate till breaking point or hide fundamental structural flaws. More often than not, they are borne from lack of diversification [...]

Part of the recovery and healing process of the world economy will involve an evolution of the trade positions of countries. As profligate nations save and emerging market consumers expand, Western trade deficits and emerging market trade surpluses are likely to contract towards balance. The transactional demand for currency will likely support the USD and [...]

I am not an equity market bear; if anything I am firmly of the view that the world economy is on the path of recovery and repair. Equity markets have, however, run well ahead of themselves and of fundamentals. Technically, equities are heavily overbought. Fundamentally, they are not cheap either. In an earlier article dated [...]

The rally in global equity markets masks the fact that economic fundamentals remain weak. The bulls say that the recovery is underway, that green shoots of economic recovery are sprouting, that economies have passed their trough; some even go as far as to suggest a V shaped recovery (Goldman Sachs is one of them). The [...]

Who bought bank shares without knowing what banks do? Who bought CDO’s without knowing how they work? Who bought RMBS without knowing how they work? Who invested in private equity, real estate, hedge funds, long only equities, commodities, FX, corporate bonds, sovereign bonds, CDS, ABS, structured products, without understanding their markets, their fundamentals, their payoffs [...]

Markets rarely ever move in straight lines. Regardless of fundamentals, it was irrational to believe in February 2009 that equity markets would sink to zero. In early March, equity markets rebounded and are on an almost constant upward incline. Beware.
We now speak of distressed valuations supporting a more constructive outlook. We talk about the green [...]

On 8 June, I wrote in the Straits Times, a newspaper in Singapore that Temasek Holdings should not shy away from risk despite recent losses. Here is the article: 
 
“Temasek’s track record has come under fire of late for a couple of false steps, notably its investments in Merrill and Barclays. These false steps are unfortunate, [...]

Although I have never been a marketer, and am firmly on the buy side, being part of First Avenue Partners, effectively a marketing firm active in hedge funds, private equity and real estate, as well as a hedge fund seeder, gives me a very interesting view on what investors want. Being responsible for due diligence and manager selection [...]

The month of June is replete with hedge fund conferences. Conferences earlier this year were either poorly attended, or else investors attended them for the free breakfast or lunch, a chance to commiserate with fellow sufferers of the global financial crisis/hedge fund witch hunt. What a difference a couple of months of rising markets make. A [...]

As investors agonized over whether markets were in a bear of bull rally, money continued to be made by hedge funds. Let’s look at the 1 month numbers. Equity long short returned a strong 5.74% on the back of rising equity markets. They captured roughly half of the upside in equity markets. That’s not the [...]