28 July 2009: Authors or Analysts?

We had a meeting with one of the banks we have an account with. The person managing the fixed income portfolio said that we would have to see whether what we are going through are green shoots or weeds. Sometime back the finance minister of Germany said that she gardens and she would call something a green shoot only when she is able to see some green. A person I know wrote a commentary titled "Apropos the Stock Market." In the years I have known her, I think this is the first time I have heard her opinion on the market. However I have never heard her use a word to the quality of Apropos before. I am one of the gateways to the family and it is my solemn duty to protect the family. All of us in the family office are either second generation employees of the company or directly related to the company. We are who we are because of the company. I do not know where the future will take me. However I do know that it would take a cataclysmic event to do anything that would compromise or hurt the family. I like my job and what I do. As a kid I wanted to be a Priest. My friends tell me that I should be an author,poet or musician. However I do not think I am going to go away from the world of finance and this blog is not a path to penetrating that space. Writing should come natural to all of us in the field of finance. We rarely state the reality. Everything we say is open to interpretation. What trades or strategy we do is dependent on what we perceive as the truth or it may be because we are letting the mass public hear what they want to hear. Very few people have the guts or talent to tell things as they see it. I am a poet. Every word I write is carefully measured. In my poetry especially I purposely write things so that they are ambiguous. Next Monday City Girl who writes for the London Paper will be revealing her identity and will be publishing a book as she has quit her job. Another person to walk away from the evil of the city. All of us in the world of investments are guilty of some sin or the other. Finally I guess our humanity catches up with us. We see the city for who she really is. However should we blame her for what she has become? After all it is we who have created her.And we end up walking away once we either tire or get guilty of prostituting her. I shall end this by quoting the same quote from Oscar Wilde that city girl did; "The only way to get rid of temptation is to yield to it." Sent from my BlackBerry® wireless device

July 21 2009

One of the best feelings I get is when the "experts" from the major financial institutions comes up with the same conclusion that I have after I have realized it. Yes it is narcissistic of me but that it is the flower of my birthday and therefore it is to be expected. The latest episode was last night when one of the sports commentators on Sky said "One small step for Flintoff, one big step for England." Earlier in the day I wrote on my facebook "One small step towards the Urn and one big step for England." The ASX increased by .01% today. That .01% increase can be attributed to the applause the populace at Lords gave Ricky Ponting an applause when he admitted that they were outplayed. The FTSE on the other hand has increase by over 1%. The share price of all the sponsors of the English Cricket Team have increased since yesterday. The only sponsor of the Australians who have had their share price increased is 3G. However 3G is 50% owned by Vodafone. Now what would a normal Aussie bloke do if he knew that? Does the average Aussie cricket fan know that Fosters have sold the rights to brew Fosters in Europe to Scottish and Newcastle which is owned by Heineken? In Europe the beer associated with Australia is not Australian!! Everything is not what it appears to be. Pure transparency among equity funds and hedge fund does not, will not and should not exist. If transparency did exist then everyone from a 90 years old grandmother in Timbuktu to Wall Street would be buying the same things. If that would happen then there will be no money to be made. Efficient markets cannot exist. It is the risk and uncertainty that gives rise to opportunity. All creation stories and theories begins with Chaos. Since that is the case then who are we to go against the Gods?

July 16th 2009

Matthew Lynn who is a columnist for Bloomberg wrote a very interesting article on whether the seriousness of Steven Jobs health was of material consequence to release the information earlier than when Apple actually did. I believe that this is a gray area. A line should be drawn. However the question is where the boundary between public and personal space should start for a prominent public figure. Humans are voyeuristic in nature. This is not about which celebrity is sleeping with whom. Yes there are people who feed on this but Katie Price breaking up with Peter Andre will not have as much of an effect on the world as the health of Steve Jobs or Warren Buffett. The value of companies and funds are associated with the people who lead it. Will the successor of Apple and Berkshire Hathaway be the same without Jobs or Buffett? The performance of Absolute Capital Management fell dramatically after Florian Homm who co-founded the company suddenly walked out of the company. The point of all of this is that there is a big possibility of people losing a lot of money if something had to happen to prominent people in industry. I am not insinuating that CEO's twitter their life but if there is any issue that will potentially influence a company or a fund then full disclosure should be made as soon as possible. As usual I have to bring cricket into the picture. The very next day after the first test match was over a public declaration was made that Andrew Flintoff had to undergo a scan on his knee. The results were not published but immediately Steve Harmison was called up as a precaution. However there were also pictures published of Flintoff practicing in the nets and the announcement by Flintoff that he was going to step down from Test cricket after this series. Flintoff is the talisman of the English side and a very important part. His departure will have a more profound effect on this series than if Andrew Strauss who is the captain on the side got injured. I do not know if Flintoff will play today but the English Cricket Board handled his situation in a significantly better way than Apple did with Steve Jobs.

July 13th 2009

The Ashes season has started. Probably it was one of the most exciting first test match of an Ashes series. Australia won the first test match in 2005. The Australian index outperformed the FTSE by 2.36% starting from the Monday before the Test match to the next Monday. In 2006 the ASX outperformed by .19%. Australia won that match too. Last week the FTSE outperformed by 2.61%. England drew the match. However Australia missed a golden opportunity to win the match. If Jenson Button had to win the German Grand Prix instead of Mark Webber then I would guess that the the difference would have been in excess of 3.0% Ricky Ponting was furious that England used time wasting tactics. At least Nathan Hauritz was honest enough to admit that Australia would have used the same tactics. Besides I am pretty confident that had the Aussies taken the last wicket and won the match then they would have been totally pompous about it. It is not that England breached the spirit of the game but the Aussies are just sore losers.

July 9th 2009

I am writing this from the tube. A strange place to be writing a blog from but thank God for emails and blackberries.
There were 2 old people in the tube and a blond pony tailed man gave up his seat and took them by the hand and escorted both of them by the hand. The man was partially blind and the lady needed the help of a walking stick. It was then that another girl got up and so did I.
I was too busy reading that Primark had an increase in their sales. Sometimes we are so engrossed in the economics of the world and the next big idea that we forget that the primary responsibility of a relationship manager or a fund manager is to get their client from the precarious position of leaning against the sliding doors of a crowded moving train to a seat of safety.
We are lucky to have some really good relationship managers. They were there to take us from the door to the seat. They were also there to tell us when to get up and start running and when to get out of the train and to sit on the benches and just watch the trains go by.
However there is one bank which we are not happy with. Their focus is not on building a long term relationship. There is little alternative to what they have to offer so for the time being we are staying put. However getting into this bank has opened my eyes to the seedier side of the finance field. A world due to various reasons I have escaped from. A world that I read about through the columns and books written by Geraint Anderson. Reading that a world exists where people are willing to do anything for money and actually seeing it and hearing about it is two different things. The scales have been falling from my eyes. In this world of greed there are few things that can save us. Ethics, concern about our fellow people, compassion and love. It is the small things in life that matter. Money is important but it is not the end all. The hug from a true friend, the kiss of a lover, laughing at the silliest of things and the pleasure of a family. These are the things that matter in the end.
Sent from my BlackBerry® wireless device

July 7th 2009

Today is four years since the bombings in London. A lot has changed since then. However the Ashes is upon us again and it is less than 24 hours away. As in 2005 there is a good possibility that England will win this series. Someone on face book said that the chances of England winning the Ashes is as good as America having an economic recovery. I do not think that the recovery of America will start tomorrow and will be significantly better by the time the Ashes end. However what I do know is that America is on the path of recovery. The distressed funds cropping up is testament to this. Roger Federer created a record at Wimbledon over the weekend. He deserved it. However I have to admit that I did admire Roddick. I do not think he is a better player than Andy Murray or Roger Federer. However what he did was he studied his opponents, created a strategy and stuck to it. His plan was good enough to beat Murray and to take the finals to a five sets. The talent of Federer was better than the skill of Roddick combined with his plan. That match is an epitome of the financial market. A beautiful sunny day, a lush green carpet of grass for the most part. The baseline however nearly caused both players to slip at different times. Finally strategy is not good enough to win. You have to be talented.