Warren Buffet has put real money ($320K)to prove his long-held belief that experts cannot beat S&P over long run. I agree with WB. Check out details at:
WB bet about S&P and Hedge Funds returns
While running after long-tail, returns (after hefty fees) of majority of hedge funds (except top 10%) is normally below market returns and I am strong believer of efficient market theory over long run (though in short duration, markets could be inefficient and provide great opportunities)
However I think S&P could be wrong benchmark going forward. By 2018 when this bet concludes, US would be only about 30% of overall market capitalization across the world with BRIC countries having major growth. If I have to put a bet, I would bet on international equivalent of S&P 500 - I don't know if there is an index which tracks top 500 world companies
Now coming back to oil - I am glad that it is back to $131 and looks like it is going to $120 in next few weeks - hopefully it would reduce the pain almost all of world population is facing. As usual, Republicans blocked the "oil windfall tax" bill in Senate. In one way, democrats may be happy that republicans blocked the bill so that democrats can use this during election and capture Senate, Congress and White House
As I predicted, now that Dow has gone below 12300, I am sticking with my prediction that Dow would go above 13000 (and could reach 13500) by end of this year. However that's possible only if oil comes down below $100 and Lehman does not go under!
Good luck and good night
/Shyam
WB bet about S&P and Hedge Funds returns
While running after long-tail, returns (after hefty fees) of majority of hedge funds (except top 10%) is normally below market returns and I am strong believer of efficient market theory over long run (though in short duration, markets could be inefficient and provide great opportunities)
However I think S&P could be wrong benchmark going forward. By 2018 when this bet concludes, US would be only about 30% of overall market capitalization across the world with BRIC countries having major growth. If I have to put a bet, I would bet on international equivalent of S&P 500 - I don't know if there is an index which tracks top 500 world companies
Now coming back to oil - I am glad that it is back to $131 and looks like it is going to $120 in next few weeks - hopefully it would reduce the pain almost all of world population is facing. As usual, Republicans blocked the "oil windfall tax" bill in Senate. In one way, democrats may be happy that republicans blocked the bill so that democrats can use this during election and capture Senate, Congress and White House
As I predicted, now that Dow has gone below 12300, I am sticking with my prediction that Dow would go above 13000 (and could reach 13500) by end of this year. However that's possible only if oil comes down below $100 and Lehman does not go under!
Good luck and good night
/Shyam
Comments
AGAIN CONGRATS ON THE MBA...PRETTY SWEET
WE ARE IN TROUBLE AND I WOULD BE CAREFUL PICKING BOTTOMS
IF FORCED TO MARK TO MARKET LIKE AN IB MANY COMMERCIAL BANKS WOULD BE TECHNICALLY INSOLVENT
MY BOYS WM WB FED DSL ETC ARE PROVING THIS...
NOW THE JAWBONING IS ABOUT RAISING RATES
WELL GEESH I HAVE BEEN SAYING WATCH $TNX AND $IRX FOR A WHILE
INFLATION IS OFF THE CHAINS AND OIL IS THE NEW GOLD... I TOO HOPE OBAMA GETS ELECTED
1. HE FACES A GIANT SH*T STORM
2. MAYBE HE LISTENS TO VOLKER AND DOES THE RIGHT THING
3. IF PEOPLE EVER WAKE UP TO ALL THE CRAP OUR POLITICIANS AND .GOV RUN THEN PERHAPS WE CAN EFFECT CHANGE AND BECOME FISCALLY CONSERVITIVE
WE NEED TO PAY DOWN DEBT AS A COUNTRY
You could not have more right about all the things you posted. Hope you made some money by shorting these financials. I am more of a optimistic guy so "shorting" goes against my nature:-)
Keep in touch
well fortunatley for me I trade in reality and do not let the "short" or put position get in my way
if I am spending money/taking a position it is investing...it is also a bet...I am optimistic but one thing that has taught me well is to view companies in a pessimistic manner...if you can do this you can cut through spin...also if you view this way and are still impressed with co at current levels get long em
believe me shy...watching the market rally all crazy like that in april was painful but i faded as much as i could and I am doing well
if you get a chance you may want to watch this guys vid's
http://www.youtube.com/watch?v=kJOJYUJi4n8
and this guy
http://www.youtube.com/user/Crashof2008
time consuming but full of info
the latter guy Mr. FED really taught me about how the FED works and got me into reading FED reports etc...
oh also sorry if the douch_bag handle offends you...I like the name as it adds levity etc...
SIDE NOTE AND FUNNY QUESTION
GOING TO SAN FRAN NEXT WEEKEND
WONDERING IF YOU KNOW OF GOOD INDIAN FOOD PLACE I CAN VISIT
THANKS
Try New Delhi Restaurant - it is on Ellis street near Union Square.
If you are in mood to splurge (after making some money on your puts on financials), you can try Gaylord in Giradelli Square - it is upscale and costly but has excellent views of bay
Have fun
/Shyam
you see $tnx today
yeah I dunno which but I will try one of them out...thanks for the rec's
have a great day