At the end of October last year 2007, the FTSE 100 was 6,721. Just a year later, and now the index is 3,890. That’s a fall of 42%!
US, London and Japan stocks are far from alone. Share prices have plunged round the world, and have recently fallen so fast that there’s the smell of blind panic around. What’s more, now the great and the good among the politicians and central bankers are competing with each other to tell us how bad the recession will be, and how long it will last. In other words, this might seem to be about as bad as it gets – Sir John Templeton’s fabled point of “maximum pessimism” - which is just when contrarian investors start coming into their own.
But while sniffing out shares that have fallen right out of favour isn’t too difficult right now, there’s a much bigger problem out there. Hedge funds are in forced sale mode! Stock markets may be in fire-sale territory (even longer-term bears such as Jeremy Grantham believe stocks are now closer to being undervalued) but a lot of the big sellers are the hedge fund managers. They bought stocks with borrowed money, and are now having to offload them.
While we can’t yet know exactly what’s being sold, we do know there’s plenty more stock still in the pipeline. The hedge fund industry has been staggering through its worst time in two decades, with an average loss of 17% this year. That beats the performance of most global stock markets, but it’s still not exactly great for a concept that was supposed to be able to sidestep declining markets (though to be fair, ‘short-selling’ bans haven’t helped recently).
Now the heat is really being turned up. Some 8,000 hedge funds with more than $1.7 trn in assets are “being caught in a vicious cycle” say BusinessWeek’s Matthey Goldstein and David Henry, “as worried investors pull out their money”. The problem lies in the mix of plunging markets and massive de-leveraging, i.e. paying down debt, across the financial system. Over the three months to September, another $179bn was wiped off the value of hedge fund assets by falling asset prices, according to Hedge Fund Research.
Spooked by the market falls, and keen to have ready cash at hand, investors have been pulling their money out at a rapid rate, with almost $31bn being withdrawn over the quarter – which means hedgies need to sell more assets to repay clients. On top of this, as markets fall, lenders are also cutting credit lines to their hedge fund customers or are making ‘margin calls’, i.e. demanding that those funds come up with extra cash to back up their borrowings.
And as if that wasn’t enough, the Lehman Brothers bankruptcy is still tying up tens of billions of dollars-worth of hedge fund assets. Lots of money managers had “parked” cash and other securities at the investment bank's prime brokerage operation. But these accounts are now frozen.
But it’s about to get even worse...
That’s more than enough bad news for any industry to cope with. As many as 30% of hedge funds will be shutting up shop “in a Darwinian process”, says Emmanuel Roman at GLF Partners, and the US authorities will force-feed regulation onto the rest: “there need to be scapegoats, and they are going to go hunt people”. That will make business even harder, and lead to even more forced selling.
In London, out of 450 hedge funds, more than 100 could be at risk, says Miles Costello in The Times. New York Professor Nouriel Roubini, who has been spot on about how bad things were going to get, agrees that hundreds of hedge funds will fail. “We've reached a situation of sheer panic. Yet I fear the worst is ahead of us. Don't be surprised if policy makers need to close down markets for a week or two in coming days”. This is pretty apocalyptic stuff. But the cavalry isn’t about to appear over the horizon.
US Treasury Secretary Henry Paulson confirmed to Bloomberg yesterday that unregulated firms like hedge funds won't initially get government aid as “we're focused on regulated financial institutions.” So “you can argue that it could be worse than Wall Street because no one is coming in to save the hedge funds”, says Hank Higdon at Higdon Partners.
Why you shouldn't go bargain hunting just yet? What does this mean for the ordinary investor?
Well, because of the hedgie effect, share prices could easily fall some way further than anyone expects. “The market’s going to overshoot on the downside”, says Peter Boockvar at Miller Tabak, who sees the Dow tumbling to 5,000 next year, more than 40% below today. “When that occurs, I’ll be a raging bull”. So it’s a brave man, or woman, however contrarian, who’s prepared to dip more than a very small toe in the market with the hedge funds in forced sale mode for some time to come. I certainly wouldn’t be buying any funds, passive or actively managed.
Period.
King of the Birds, Lord of the Skies
Gather ye rose buds while ye may, old time is still a flying;
and this same rose that you see today, tomorrow will be dying.
CarpeDiem: Seize the Day!
- Dead Poets Society
Friday, October 24, 2008
Father and Son
I try to be a good father. Give my son everything he needs. Pay for his phonics class. Take him and mom out for fine dining. Have yearly photo shoots... etc...
But compared with Dick Hoyt, I suck.
You see, eighty-five times he's pushed his disabled son, Rick, 26.2 miles (41.92 km) in marathons. Eight times he's not only pushed him 26.2 miles in a wheelchair but also towed him 2.4 miles in a dinghy while swimming and pedaled him 112 miles in a seat on the handlebars - all in the same day.
Dick's also pulled him cross-country skiing, taken him on his back mountain climbing and once hauled him across the U.S. on a bike. Makes taking your son bowling look a little lame, right?
And what has Rick done for his father? Not much - except save his life.
This love story began in Winchester, Mass., 43 years ago, when Rick was strangled by the umbilical cord during birth, leaving him brain-damaged and unable to control his limbs.
"He'll be a vegetable the rest of his life," Dick says doctors told him and his wife, Judy, when Rick was nine months old. "Put him in an institution."
But the Hoyts weren't buying it. They noticed the way Rick's eyes followed them around the room. When Rick was 11 they took him to the engineering department at Tufts University and asked if there was anything to help the boy communicate.
"No way," Dick says he was told. "There's nothing going on in his brain."
"Tell him a joke," Dick countered. They did. Rick laughed. Turns out a lot was going on in his brain.
Rigged up with a computer that allowed him to control the cursor by touching a switch with the side of his head, Rick was finally able to communicate. First words? "Go Bruins!" And after a high school classmate was paralyzed in an accident and the school organized a charity run for him, Rick pecked out, "Dad, I want to do that."
Yeah, right. How was Dick, a self-described "porker" who never ran more than a mile at a time, going to push his son five miles? Still, he tried. "Then it was me who was handicapped," Dick says. "I was sore for two weeks."
That day changed Rick's life. "Dad," he typed, "when we were running, it felt like I wasn't disabled anymore!"
And that sentence changed Dick's life. He became obsessed with giving Rick that feeling as often as he could. He got into such hard-belly shape that he and Rick were ready to try the 1979 Boston Marathon.
"No way," Dick was told by a race official. The Hoyts weren't quite a single runner, and they weren't quite a wheelchair competitor. For a few years Dick and Rick just joined the massive field and ran anyway, then they found a way to get into the race officially. In 1983 they ran another marathon so fast they made the qualifying time for Boston the following year.
Then somebody said, "Hey, Dick, why not a triathlon?"
How's a guy who never learned to swim and hadn't ridden a bike since he was six going to haul his 110-pound kid through a triathlon? Still, Dick tried.
Now they've done 212 triathlons, including four grueling 15-hour Ironmans in Hawaii. It must be a buzzkill to be a 25-year-old stud getting passed by an old guy towing a grown man in a dinghy, don't you think?
Hey, Dick, why not see how you'd do on your own? "No way," he says. Dick does it purely for "the awesome feeling" he gets seeing Rick with a cantaloupe smile as they run, swim and ride together.
This year, at ages 65 and 43, Dick and Rick finished their 24th Boston marathon, in 5,083rd place out of more than 20,000 starters. Their best time? Two hours, 40 minutes in 1992 - only 35 minutes off the world record, which, in case you don't keep track of these things, happens to be held by a guy who was not pushing another man in a wheelchair at the time.
"No question about it," Rick types. "My dad is the Father of the Century."
And Dick got something else out of all this too. Two years ago he had a mild heart attack during a race. Doctors found that one of his arteries was 95% clogged. "If you hadn't been in such great shape," one doctor told him, "you probably would've died 15 years ago."
So, in a way, Dick and Rick saved each other's life.
Rick, who has his own apartment (he gets home care) and works in Boston, and Dick, retired from the military and living in Holland, Mass., always find ways to be together. They give speeches around the country and compete in some backbreaking race every weekend, including this Father's Day.
That night, Rick will buy his dad dinner, but the thing he really wants to give him is a gift he can never buy.
"The thing I'd most like, "is that my dad sit in the chair and I push him once."
By Rick ReillySports Illustrated
- Used with permission
Dick and Rick Hoyt have a book and DVD. To learn more about this very special father and son team go to: www.teamhoyt.com
But compared with Dick Hoyt, I suck.
You see, eighty-five times he's pushed his disabled son, Rick, 26.2 miles (41.92 km) in marathons. Eight times he's not only pushed him 26.2 miles in a wheelchair but also towed him 2.4 miles in a dinghy while swimming and pedaled him 112 miles in a seat on the handlebars - all in the same day.
Dick's also pulled him cross-country skiing, taken him on his back mountain climbing and once hauled him across the U.S. on a bike. Makes taking your son bowling look a little lame, right?
And what has Rick done for his father? Not much - except save his life.
This love story began in Winchester, Mass., 43 years ago, when Rick was strangled by the umbilical cord during birth, leaving him brain-damaged and unable to control his limbs.
"He'll be a vegetable the rest of his life," Dick says doctors told him and his wife, Judy, when Rick was nine months old. "Put him in an institution."
But the Hoyts weren't buying it. They noticed the way Rick's eyes followed them around the room. When Rick was 11 they took him to the engineering department at Tufts University and asked if there was anything to help the boy communicate.
"No way," Dick says he was told. "There's nothing going on in his brain."
"Tell him a joke," Dick countered. They did. Rick laughed. Turns out a lot was going on in his brain.
Rigged up with a computer that allowed him to control the cursor by touching a switch with the side of his head, Rick was finally able to communicate. First words? "Go Bruins!" And after a high school classmate was paralyzed in an accident and the school organized a charity run for him, Rick pecked out, "Dad, I want to do that."
Yeah, right. How was Dick, a self-described "porker" who never ran more than a mile at a time, going to push his son five miles? Still, he tried. "Then it was me who was handicapped," Dick says. "I was sore for two weeks."
That day changed Rick's life. "Dad," he typed, "when we were running, it felt like I wasn't disabled anymore!"
And that sentence changed Dick's life. He became obsessed with giving Rick that feeling as often as he could. He got into such hard-belly shape that he and Rick were ready to try the 1979 Boston Marathon.
"No way," Dick was told by a race official. The Hoyts weren't quite a single runner, and they weren't quite a wheelchair competitor. For a few years Dick and Rick just joined the massive field and ran anyway, then they found a way to get into the race officially. In 1983 they ran another marathon so fast they made the qualifying time for Boston the following year.
Then somebody said, "Hey, Dick, why not a triathlon?"
How's a guy who never learned to swim and hadn't ridden a bike since he was six going to haul his 110-pound kid through a triathlon? Still, Dick tried.
Now they've done 212 triathlons, including four grueling 15-hour Ironmans in Hawaii. It must be a buzzkill to be a 25-year-old stud getting passed by an old guy towing a grown man in a dinghy, don't you think?
Hey, Dick, why not see how you'd do on your own? "No way," he says. Dick does it purely for "the awesome feeling" he gets seeing Rick with a cantaloupe smile as they run, swim and ride together.
This year, at ages 65 and 43, Dick and Rick finished their 24th Boston marathon, in 5,083rd place out of more than 20,000 starters. Their best time? Two hours, 40 minutes in 1992 - only 35 minutes off the world record, which, in case you don't keep track of these things, happens to be held by a guy who was not pushing another man in a wheelchair at the time.
"No question about it," Rick types. "My dad is the Father of the Century."
And Dick got something else out of all this too. Two years ago he had a mild heart attack during a race. Doctors found that one of his arteries was 95% clogged. "If you hadn't been in such great shape," one doctor told him, "you probably would've died 15 years ago."
So, in a way, Dick and Rick saved each other's life.
Rick, who has his own apartment (he gets home care) and works in Boston, and Dick, retired from the military and living in Holland, Mass., always find ways to be together. They give speeches around the country and compete in some backbreaking race every weekend, including this Father's Day.
That night, Rick will buy his dad dinner, but the thing he really wants to give him is a gift he can never buy.
"The thing I'd most like, "is that my dad sit in the chair and I push him once."
By Rick ReillySports Illustrated
- Used with permission
Dick and Rick Hoyt have a book and DVD. To learn more about this very special father and son team go to: www.teamhoyt.com
Wednesday, October 22, 2008
Falling down or Staying down?
"Failure is not the falling down, but the staying down."
Mary Pickford
(1892–1979)
Canadian actress
They may have fallen down, but they didn't stay down. Check out these examples of resourceful and resilient people refusing to give up:
Before his circus was "The Greatest Show On Earth", P.T. Barnum filed for bankruptcy due to unwise business investments, and even contemplated suicide. He chose instead to start his famous circus, which he then merged with competitor James A. Bailey's. The Barnum and Bailey Circus netted Barnum over $2 million during his lifetime.
Milton Hershey had only a 4th grade education and four failed candy businesses when he filed for bankruptcy. His fifth business attempt, the Hershey Foods Corporation (now The Hershey Company) is America's largest chocolate manufacturer.
Mary Pickford
(1892–1979)
Canadian actress
They may have fallen down, but they didn't stay down. Check out these examples of resourceful and resilient people refusing to give up:
Before his circus was "The Greatest Show On Earth", P.T. Barnum filed for bankruptcy due to unwise business investments, and even contemplated suicide. He chose instead to start his famous circus, which he then merged with competitor James A. Bailey's. The Barnum and Bailey Circus netted Barnum over $2 million during his lifetime.
Milton Hershey had only a 4th grade education and four failed candy businesses when he filed for bankruptcy. His fifth business attempt, the Hershey Foods Corporation (now The Hershey Company) is America's largest chocolate manufacturer.
Tuesday, October 21, 2008
Shares may well be cheap...but they may get a lot CHEAPER!!!
Is this a good time to buy back in to the market? I am sure at some point many will be asking this question.
With share prices crashing around our ears, there’s clearly no lack of doom and gloom around at the moment. But if you’re a bit of a contrarian thinker (means people go left, you go right), who likes selling when markets are frothy and sneaking back in when everyone else is dumping stock in panic, you might be thinking it's time to buy.
Shares have dropped such a long way, it’s very tempting to start thinking about finding some bargains. But WAIT!! Are you aware what is the next scary thing thats about to unfold?
Hedged funds!
Yeah right. What’s happening on the hedge fund front may mean it’s not quite that simple and easy for you to time an entry now to buy back … really.
Yes, stocks are cheap now, but they will get cheaper, a lot cheaper soon...heehaaa :)
With share prices crashing around our ears, there’s clearly no lack of doom and gloom around at the moment. But if you’re a bit of a contrarian thinker (means people go left, you go right), who likes selling when markets are frothy and sneaking back in when everyone else is dumping stock in panic, you might be thinking it's time to buy.
Shares have dropped such a long way, it’s very tempting to start thinking about finding some bargains. But WAIT!! Are you aware what is the next scary thing thats about to unfold?
Hedged funds!
Yeah right. What’s happening on the hedge fund front may mean it’s not quite that simple and easy for you to time an entry now to buy back … really.
Yes, stocks are cheap now, but they will get cheaper, a lot cheaper soon...heehaaa :)
Monday, October 20, 2008
"Claypot" Laksa?
I dined out at the Food Republic (Vivo City) last night, and had a really interesting encounter with this stall that sell one of our favourite local dish - LAKSA!
The signboard read: "Claypot Laksa: $6.90"
Wow! That's steep for a bowl of almighy but ubiquitous laksa, I thought.
Wait a minute, I just had one last week near Katong, for a mere $4.00. Served in a plastic bowl.
But wait another minute, I also just had a bowl of Laksa last last week near my good old neighbourhood coffeeshop, for... $3.00. Sadly, it was also served in plastic bowl.
So now I understand:
Between Laksa and "Katong" Laksa, the different is $1. (or the real different is actually just the word "Katong")
Okay, now between "claypot" laksa and "Katong" Laksa, the different is ... $2.90 !!! (or the real different is just the word "claypot")
Now it set me wondering:
1. Does laksa really taste better in claypot? I doubt so.
2. Does eating Laksa in Katong cost $1 or 2 more?
3. Will it be cheaper if it is Sengkang Laksa?
4. Must I pay more if my Laksa is prepared elsewhere, but sell and served in Katong?
I am sure by now you get what I am hitting :)
No no... is it really better if it is actually "COOKED" in a claypot?? I doubt so too.
So, those diners that paid $6.90 for that touted bowl of heavenly milk noodle is actually paying for the container (claypot) ... yeah ... just the vessel that hold the ordinary, everyhwere-available laksa. I find it laughable and pathetic.
Remember: Anything that is written "Claypot" is not really that "Claypot"... if you know what I mean.
Laksa in a claypot does little to enhance the flavour. It does enhance the bottomline for the laksa seller though...that I am very certain.
What a ripped-off!!!
The signboard read: "Claypot Laksa: $6.90"
Wow! That's steep for a bowl of almighy but ubiquitous laksa, I thought.
Wait a minute, I just had one last week near Katong, for a mere $4.00. Served in a plastic bowl.
But wait another minute, I also just had a bowl of Laksa last last week near my good old neighbourhood coffeeshop, for... $3.00. Sadly, it was also served in plastic bowl.
So now I understand:
Between Laksa and "Katong" Laksa, the different is $1. (or the real different is actually just the word "Katong")
Okay, now between "claypot" laksa and "Katong" Laksa, the different is ... $2.90 !!! (or the real different is just the word "claypot")
Now it set me wondering:
1. Does laksa really taste better in claypot? I doubt so.
2. Does eating Laksa in Katong cost $1 or 2 more?
3. Will it be cheaper if it is Sengkang Laksa?
4. Must I pay more if my Laksa is prepared elsewhere, but sell and served in Katong?
I am sure by now you get what I am hitting :)
No no... is it really better if it is actually "COOKED" in a claypot?? I doubt so too.
So, those diners that paid $6.90 for that touted bowl of heavenly milk noodle is actually paying for the container (claypot) ... yeah ... just the vessel that hold the ordinary, everyhwere-available laksa. I find it laughable and pathetic.
Remember: Anything that is written "Claypot" is not really that "Claypot"... if you know what I mean.
Laksa in a claypot does little to enhance the flavour. It does enhance the bottomline for the laksa seller though...that I am very certain.
What a ripped-off!!!
Wednesday, October 8, 2008
Song: You Will Never Walk Alone
Along life's road, there will be sunshine and rain,
Roses and thorns,
Laughter and pain.
And cross the miles, you will face mountains so steep,
Deserts so long,
Valleys so deep.
Sometimes the journey's gentle,
Sometimes the cold winds blow.
But I want you to remember...
I want you to know...
Chorus:
You will never walk alone,
As long as you have faith,
Jesus will be right beside you all the way.
You may feel you're far from home,
But home is where He is,
And He'll be there down every road,
You will never walk alone.
The path will wind,
And you will find wonders and fears,
Labors of love,
And a few falling tears.
Across the years, there will be some twists and turns,
Mistakes to make, and
Lessons to learn.
Sometimes the journey's gentle,
Sometimes the cold winds blow.
But I want you to remember,
Wherever you may go...
Jesus knows your joy,
Jesus knows your need.
He will go the distance with you faithfully.
Written by Lowell Alexander
Copyright 2001
Word Music, Inc
ASCAP
Roses and thorns,
Laughter and pain.
And cross the miles, you will face mountains so steep,
Deserts so long,
Valleys so deep.
Sometimes the journey's gentle,
Sometimes the cold winds blow.
But I want you to remember...
I want you to know...
Chorus:
You will never walk alone,
As long as you have faith,
Jesus will be right beside you all the way.
You may feel you're far from home,
But home is where He is,
And He'll be there down every road,
You will never walk alone.
The path will wind,
And you will find wonders and fears,
Labors of love,
And a few falling tears.
Across the years, there will be some twists and turns,
Mistakes to make, and
Lessons to learn.
Sometimes the journey's gentle,
Sometimes the cold winds blow.
But I want you to remember,
Wherever you may go...
Jesus knows your joy,
Jesus knows your need.
He will go the distance with you faithfully.
Written by Lowell Alexander
Copyright 2001
Word Music, Inc
ASCAP
Wednesday, September 24, 2008
Seasons of Love - From RENT Musical
Artist: RENT Musical
Song: Seasons Of Love
Five Hundred Twenty-Five Thousand Six Hundred Minutes
Five Hundred Twenty-Five Thousand Moments so Dear
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure - Measure A Year?
In Daylights - In Sunsets
In Midnights - In Cups Of Coffee
In Inches - In Miles
In Laughter - In Strife
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure
A Year In The Life
How About Love?
How About Love?
How About Love?
Measure In Love
Seasons Of Love
Seasons Of Love
Five Hundred Twenty-Five Thousand Six Hundred Minutes
Five Hundred Twenty-Five Thousand Journeys To Plan
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure The Life
Of A Woman Or A Man?
In Truths That She Learned
Or In Times That He Cried
In Bridges He Burned
Or The Way That She Died
It's Time Now - To Sing Out
Tho' The Story Never Ends
Let's Celebrate
Remember A Year In The Life Of Friends
Remember The Love
Remember The Love
Remember The Love
Measure In Love
Measure, Measure Your Life In Love
Seasons Of Love
Song: Seasons Of Love
Five Hundred Twenty-Five Thousand Six Hundred Minutes
Five Hundred Twenty-Five Thousand Moments so Dear
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure - Measure A Year?
In Daylights - In Sunsets
In Midnights - In Cups Of Coffee
In Inches - In Miles
In Laughter - In Strife
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure
A Year In The Life
How About Love?
How About Love?
How About Love?
Measure In Love
Seasons Of Love
Seasons Of Love
Five Hundred Twenty-Five Thousand Six Hundred Minutes
Five Hundred Twenty-Five Thousand Journeys To Plan
Five Hundred Twenty-Five Thousand Six Hundred Minutes
How Do You Measure The Life
Of A Woman Or A Man?
In Truths That She Learned
Or In Times That He Cried
In Bridges He Burned
Or The Way That She Died
It's Time Now - To Sing Out
Tho' The Story Never Ends
Let's Celebrate
Remember A Year In The Life Of Friends
Remember The Love
Remember The Love
Remember The Love
Measure In Love
Measure, Measure Your Life In Love
Seasons Of Love
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