Before today's post here is an official transcript of my interview this morning on FBN.Alexis: So Roger what do you think?
Roger : Um, der, well, gerflack.
Alexis: Back to you in the studio.
Just kidding, it went fine.
WSJ had an article yesterday about long/short mutual funds having a better run lately than during the market beat down from last summer. According to Morningstar there are 162 long/short mutual funds but if you look at the last and take out all the multiple classes of the same fund the number is closer to 53, at least that is what I got when I counted.
The idea of owning absolute return is appealing and probably more so than it was a year ago. It might be so appealing that some folks may want to switch to more of these in their portfolios. This could be a good idea but doing so after a big decline, like we've just had, and before the comeback that will happen at some point is probably a bad idea. There will likely be some big rallies when the new cycle starts, whenever that is.
Speaking of Morningstar they have some new ETF coverage in a blog they are calling Basis Points. So does this mean they are moving the direction of offering useful content? Based on the first real post... no.
They found a filing for some fixed income funds that apparently dive into credit default swaps and maybe some other fixed income derivatives too, not sure about that. After an attempt to explain how the CDS markets work (not critical of that, it is a good summary) and a rehash of the risks mentioned in the prospectus the author concludes "long story long, these funds look like trouble."
Writing a summary that attempts to be a detailed study they need to explore the uses of these funds especially since, IMO, they never met a new concept they liked and don't have much cred in analyzing ETFs. I have not studied the CDS ETFs, I may not be able to even understand them if I did study them but a one sided exploration doesn't really do much. The issuer has something in mind and I am quite certain that like most products there are probably positives and negatives and anyone considering them should be able to rely on getting the pros and cons to make their own decisions.
16 comments:
Would be nice to see someone to replace James Michaels on Forbes on Fox with a cool, logical head. hint, hint, nudge, nudge, Fox.
Great job, Roger.
lol
i look enourmous, not fat, just big.
i'm kind of a slim guy, at least i thought i was.
thanks david, I don't get so nervous that i forget stuff so usually not an utter embarrassment.
bill the only way i could do tv regularly would be if we set up a studio down at the fire station.
Your Morningstar link doesn't work (at least for me). I poked around the site and couldn't find the article you're referring to.
and hah, 10s after I post that, I find it. Click here
bad link?
thank you for the right one then!
good job. I liked your comment at the beginning. So Roger what do you think? lol.
thank you
just checked, it looks like FBN did not put my interview on the website.
I can figure how to get it from my TiVo to my computer I'll YouTube it.
Roger, could you clarify the difference between a long/short fund and a 130/30 fund please? Thestreet.com has a short article on the latter today. Thanks very much.
What's the yellow band on your left wrist Roger?
and no fancy analogue rolex for you...just the digital you go jogging with.... :P
don't worry, just razzing you and trying to make you paranoid.....
good on you for your success...
anyways, I trust guys who wear cheap digital watches more :P
Hmmmm, Roger appears on FBN the same day Google misses by $60m. Coincidence?
long short is more vague and does not have to adhere to a certain mix (unless the prospectus requires)
130/30 implies a more rigid structure for the manager to work with.
The yellow band is a Lance Armstrong bracelet.
The watch is a Shark from Freestyle, I have been wearing them since college.
Roger,
First, congrats on the show biz debut :-). Since I missed it, I hope you're able to Youtube it.
Regarding long/short funds, there was a link not too long ago on Seeking Alpha, I believe, that lead to a study on all the various permutations (130/30, 120/20, etc..), and mentioned was made, in passing, that actually a 150/50 ration showed signs of being the "optimal" ratio, although the piece didn't go into why that might be so...fwiw..
Jan
Daily Show called business news "Babes and Bald Guys", so you need to lose some hair, lol.
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