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Home / Business / & # 39; Oblivious & # 39; equity investors are not ready for what is next, hedge fund manager warns

& # 39; Oblivious & # 39; equity investors are not ready for what is next, hedge fund manager warns

Investing in passive index funds has had a brilliant maturity over the past 10 years, revealing the shortcomings of the active approach in a market where everything is in full rally mode. In fact, during that time, only 24% of the active funds represented their passive counterparts through 2018, according to Morningstar.

However, there is a feeling out there, but as markets are twisted into economic and political turmoil, we can see an active renaissance.

Jose Rasco, investment manager for HSBC Americas, recently told Barron that it is time for investors to embrace the active approach.

"There are parts of your portfolio where you obviously do not need much active management, and there are parts of the portfolio where you always need active management," says Rasco. "But as you come later in the business cycle, we feel you are more likely than you do not need more active management. "

As a reminder to the uninitiated passive funds, largely a market index without leadership follows some decisions, as opposed to active. At least, Crescat Capital Rasco hopes it right.

& # 39; Can we reach less than 20% one and no recession at all? We strongly doubt it.

Kevin Smith, Crescat Capital

The hedge fund rescued its Chinese stock and currency shorts for a sweet 201

8 appearance. According to Crescat's global macro hedge fund, according to the annual report to investors, 40.5%, and the long short hedge was 32%.

The fund has experienced a tough start to the year – just as most investors are betting on a rally – but CIO Kevin Smith is sure the return of the bear market will mark a return to Crescat's outperforming ways.

"We enter a bear market in 2019 that will coincide with the start of a global recession that will not be officially recognized until it has begun," he told investors. "We believe September 2018 marked the significant peak of the US stock market for the current economic cycle."

Here he sounds the alarm last week on Twitter:

Smith says the damage to stock at the end of the year has changed investor psychology and probably has triggered a cyclical change of shares.

"The 2018 valuation mark is amazing in showing that the S & P 500 is more fundamentally overvalued than it was on the two former historic securities markets in 1929 and 2000, bona fide speculative way," he warns. "We believe that most investors remain unaware of these valuation facts."

The Fed's uplift and macro decline in China is the primary catalyst that ultimately breaks "all the bubble," Smith says.

"Global stocks have rallied for years in the hope that a US / Chinese trade agreement and a Fed tightening can prolong the business cycle," he wrote. "Please note that historical busts from speculative values ​​late in an economic cycle have led to significant bear markets. The last four notes in the US have ranged from 46% to 86%. Can we get this time with less than 20% one and no recession at all? We strongly doubt it. "

His conclusion: This is a great climate for selling stocks.

Not much to sell so far this morning, but with the stock market with a view to making it 10 in a row (see "State" below)

The Market

The Dow

DJIA, + 0.58%

S & P

SPX, + 0.50%

and Nasdaq

COMP, + 0.75%

has a nice busy start.

Check out Market Snapshot for more coverage

It's like oil thoughts

CLJ9, -1.75%

after POTUS tells OPEC to "relax", the prices say too high.


DXY, -0.06%

is down, with gold

GCJ9, + 0.05%

also slightly softer.

Shanghai Composite

SHCOMP, + 5.60%

went cruising into a beef market, with an almost 6% gain after President Trump said he would postpone a March 1 deadline for a US tariff increase on Chinese imports.


SXXP, + 0.36%

is mostly in green.


9 weeks – It is the winning stretch that the blue chips enjoy right now, as part of the best start of the year since 1987. During the first 36 trading meetings in 2019, Dow has risen 11.6 %, and S & P 500 has increased 11.4%.

Dow Jones Market Data


It's enough to unpack in Warren Buffett's annual letter to shareholders over the weekend, but the headline figures show that Berkshire Hathaway

BRK.A, + 1.13%

had one of their worst years ever with a $ 25.4 billion loss due to an unexpected write-down on Kraft Heinz

KHC, [0.8459032] -0.83%

. Should Traders Ask Questions About Oracle of Omaha's Touch lately? (See the diagram below for more). He told CNBC this morning that he overpaid for Force, among other sins.

Talking about Kraft Heinz, the company gradually looks to sell its Maxwell House coffee business, and has employed the investment bank Credit Suisse to explore its options.

A M&A Monday is on its way. Spark Therapeutics

ONE time, + 120.50%

shoots news about an offer from the Swiss pharma giant Roche

ROG, -0.14%

– a 122% premium for Spark from Friday's price. An offer of $ 1.31 billion for Clementia Pharma

CMTA, + 74.03%

from the French Ipsen

IPN, -5.28%

has sent these shares flying. And Barrick Gold

ABX, -0.93%

GOLD, -1.23%

has made a hostile bid for Newmont Mining

NEM, -2.36%


Michael Cohen, former lawyer Donald Trump, is scheduled to testify to lawmakers next week and he is expected to be grilled for his role as long-term fixer of the president. Former white housekeepers Omarosa says what Cohen can reveal about Trump kids is a "big, red line."

At the annual Mobile World Congress in Barcelona, ​​Spain, Sony

+ 1.20%

SNE, + 1.44%

has launched smartphones with movie screens quality screens, and Huawei has a new folding phone that will cost quite a lot $ 2600.

Heard of Peloton Interactive? The start-up of the home exercise has reportedly received large banks on board for its listing – Goldman, J.P. Morgan. Although the plans have not been completed, the potential value fluctuates around $ 8 billion.

We saw the Oscar so you didn't need it. Here are all the winners, including a gentle surprise that takes top honors. And don't forget the $ 100,000 gift bags.

The chart

According to Skoke Investment Group is less than 35 shares in S&P 500 actually in red since the beginning of the year. One of these shares: Warren Buffett's Berkshire Hathaway, as you can see from this chart:

Most of the blame lies with Kraft Heinz, of course, but it wasn't so long ago that Coke

KO, -0.11%

which also constitutes a large part of the portfolio, was hit by a decrease of 8%. To be fair, if you take out Coke and Kraft from the mix, the top holdings in the fund only do well:

"It is hardly a disaster and actually quite impressive when you consider the big downturns in KHC and KO, "Tailored wrote.

Read: Here's why Berkshire can endure a mega disaster

The quote

"Therefore, red state voters are so angry. They don't hate us, they want to Be us, they want to go to the party. It's like we are the British royal family and they are Meghan Markle's dad "- Real Time host Bill Maher hosted. Look at the clip:


Finally, Craigslist's founder's $ 85 million in journalistic donations.

A Kalashnikov drone … what could possibly go wrong?

California man imprisoned for 39 years gets $ 21 million for unlawful conviction.

Anti-wax content was only demonized on YouTube. Finally.

Talking about measles, an unvaccinated French boy is blamed for bringing them back to Costa Rica.

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