It is very difficult to go wrong at 13 Amercan cents. CAAFF? Uhm, I must look more closely at these foreign shares traded on the US market. Round the clock trading is a competitive advantage not to be belittled.
Attached find news clipping from Bloomberg, following up my earlier post on hedge funds wading into technology. Not bad that Soros turned a year-on-year loss to a 30+% gain in 60 days.
We in Asia had a run-in with Soros and friends, and the ASian crisis had very little to do with non-transparency, cronyism, or lack of democracy. The storm was caused by high hard currency denominated leverage, speculation, and triggered by Soros and friends doing a hedge job on the over-valued (fixed to US$) currencies. Had you been an Indonesian billionaire, had all your assets in Indonesia, in local currency, you would have been worth no more than US$ 2 million (yes, two million) at the low point. Sort of a life style changing event in my judgement.
Hong Kong was lucky, in that we followed Malaysia's lead (turn off the light during a bar brawl and gang up on the foreigners) did not follow the Wall Street Journal rule book, defended ourselves, and taught Soros humility with a one day US$ 10 billion government intervention, and then the Russians immediately followed up with a lesson on prudence on foreign lending, and the Japanese then reminded Soros who the capital supplier to the US was. Longterm Capital nearly folds, Greenspan and Ruben panics, turns on the liquidity tap, and the rest of the story we know.
Watch out below when these famous people and the 'IPO lock-up period' expired i-net insiders starts selling, and worse, starts shorting. Asia, more particularly Japan, is a good place to ride out the storm due to its
(1) 10+ year recession/depression,
(2) high savings,
(3) megascale government sponsored liquidity,
(4) early i-net days, and
(5) low stock ownership rate.
When and if you want to run, run silently and quickly, into the night side of the world when NYSE is open, run to the CSCO, ORCL, EMC, MSFT, QCOM(?) and other shares with high international i-net potential and Japanese/Asian shares such as SFTBF, Sony, China Telecom ...
My guess for 2000 is that Soros will be testifying in the Senate in 2001.
Soros's Quantum Fund Rebounds on Technology as Robertson's Tiger Slumps
By Katherine Burton
Soros Jumps, Robertson Slumps as Tech Shares Rally (Update1)
(Adds closing stock prices.)
New York, Dec. 30 (Bloomberg) -- George Soros's flagship
$9.9 billion Quantum Fund is rounding out its best year since
1995, gaining about 32 percent, thanks to winning bets on
technology shares such as Qualcomm Inc.
Value investor Julian Robertson, even with Soros as the
world's largest hedge fund manager in mid-1998, dropped 22.5
percent, losing money for the second straight year as his biggest
holdings bombed.
The split between the two vaunted investors underscores how
surging Internet and telecommunications shares left stock pickers
who seek bargains in the dust. Robertson's Tiger Management LLC
now manages $8 billion, less than half Soros's $17.25 billion.
``Most funds have been shifting strategies, investing in
technology and initial public offerings more than ever,' said
Roland Lorenzo, president and chief operating officer of Credit
Suisse First Boston Index Co., which publishes a hedge fund
index.
That's what Stanley Druckenmiller did.
Druckenmiller, who manages Soros' Quantum Fund, has driven
returns for the year to 32 percent through Dec. 29, after losing
5 percent in the first 10 months. The fund, which can invest in
anything -- including global stocks, bonds, currencies and
commodities -- rebounded by snapping up technology shares.
Holdings
According to third quarter Securities and Exchange
Commission filings, Soros Fund Management held Qualcomm, which
has rocketed 190.5 percent since the end of October and is this
year's biggest gainer on the Standard & Poor's 500 Index. Other
stocks in its portfolio on Sept. 30 were Sun Microsystems Inc.,
Veritas Software Corp. and Parametric Technology Corp. All those
gained between 42.9 percent and 95 percent since Oct. 29.
The technology-laden Nasdaq gained 21 percent this month and
84 percent for the year, on course for the biggest gain ever by a
major U.S. index. IPOs raised a record $69.2 billion this year,
with new Internet stocks gaining an average 233 percent above
their offering prices.
Druckenmiller and Robertson don't comment on their
positions. While most investors in their funds also don't
comment, they vote with their wallets.
Investors have withdrawn $5 billion from Tiger funds since
September of 1998 and are permitted to pull money out again Dec.
31 at the end of the quarter.
Robertson has neither made nor lost money in December,
investors said, meaning his fund is down about 22.5 percent for
the year.
This year has been his biggest loser since he opened Tiger
in 1980, and is the fourth year he's lost money. In Tiger's 19-
year history, he's returned about 26 percent a year, on average.
Robertson's trouble is that he's a value investor, who has
specialized in buying low-priced stocks in relation to their
earnings. His biggest holding U.S. Airways Group Inc., has
tumbled 36.5 percent this year.
Returns
All in all, it was a banner year for stock hedge fund
managers, who bet on falling as well as rising shares. Through
November, equity hedge funds had returned 30.29 percent on
average, according to CSFB/Tremont Hedge Fund Index. That's the
best return since 1994, when the database was created.
Even stock-picker Leon Cooperman, whose biggest holdings in
at the end of the third-quarter were more value-oriented
companies like Park Place Entertainment Corp., returned about 16
percent, net of fees, through Dec. 27 for his $1.1 billion Omega
Overseas Partners. That's just behind the S&P 500's 20 percent
gain for that period.
U.S. stocks weren't the only place to make money.
Emerging market funds were up 31 percent this year through
November, on average, after being down 30 percent last year,
according to Charles Gradante, co-principal of Hennessee Group
LLC, a New York Consultant that matches investors with hedge
funds.
International funds, which dropped 2.5 percent in 1998,
jumped 31 percent through November, largely due to rebound in
Europe and Japan, he said. And risk arbitrage funds, which bet on
merging companies, were up 16 percent, on average.
Even risk arbitrage managers who did better than average,
though, lagged behind some technology and telecommunications
funds, which were up 60 percent or more.
``With an increasing percentage of the average hot dollar
chasing Internet stocks, a 30 percent to 40 percent arbitrage
return doesn't seem to crank many scooters,' said Robert
Chapman, who runs Chapman Capital LLC, a Los Angeles hedge fund
that specializes in mergers and will end the up more than 40
percent. |
