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The Best And Worst Performing Assets In 2014
Anyone who put on a long Shanghai Composite, short Brent trade on January 1, 2014, congratulations: you can now retire. However, since nobody did and instead the groupthink herd of beta-levered momentum chasers known as hedge funds were mostly long the S&P and short Treasurys, it explains why most of them generated negative returns in 2014. Here is how all the other main asset classes did in 2014, denominated both in local currency and in the soaring USD.
But first some comments from Deutsche Bank:
As far as market performance goes 2014 will likely be remembered for a few things. The amazing run in Chinese equities into year end, a strong Dollar, the ‘surprise’ rally in Treasuries, and the sell-off in Oil are some of the notable themes. Crude’s biggest annual decline since 2008 weighed heavily on US energy producers (both equity and credit). The combination of an oversupplied physical market and the best year for the Dollar since 2005 certainly didn’t help the year for Oil. That being said, despite the weakness in Energy stocks, the S&P 500 still finished the year not far off its historical highs and enjoyed its longest streak of annual gains (6 years) since the 1990s. The spread widening in energy credits had a meaningful impact on US HY which was a relative underperformer against US IG. The latter clearly also benefited from what was also the best year for Treasuries since 2011. European fixed income also had a solid year with peripheral bonds outperforming on the prospect of ECB’s QE. The performance of European equities was less impressive though with Greek equities a key laggard this year on renewed political volatility. Away from DM, lower oil, geopolitics and the outlook for the Fed Funds rate were some of the headwinds for broader EM. The EM MSCI posted its first back-to-back annual decline in 12 years whilst the Rouble had its worst year since the Russian default in 1998.
Within our selected sample of key global asset classes, the top five ‘winners’ of 2014 were Shanghai Composite (+58%), Spanish bonds (+16%), BTPs (+15%), Gilt (+15%), and the S&P 500 (+14%). On the opposite end the worst performers were Brent (-48%), WTI (-46%), Greece Athex (-29%), Portugal General (-21%) and Silver (-19%). The main chart in Figure 1 gives us a quick snapshot of the year’s performance. The chart is colour coded by the main asset classes and ranked from best to worst. Our usual performance table is also updated in the PDF for those looking for a detailed breakdown.
Local currency:
In USD:
Source: DB
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The best performing assets of 2015 will be BitAssets :)
What do the ZH guys think of BitUSD, BitGold & BitSilver being an alternative to the Goldman Sachs financial system?
https://m.youtube.com/watch?v=fnunXnLdJdw&feature=youtu.be
They're fungible & secured by an average of 300% collateral in BTS.
Bitcoin is soooo 2014....
Ha! Bitcoin had a very bad 2014, losing over 50% on the year. Mining strength increased about 30x, merchants like Microsoft and Dell started accepting it but the price really floundered. On the otherhand Bitcoin just celebrated its 6th birthday and it will be sticking around for a good long time to come.
My business uses bitcoin for 100% of internal and external payments. I seriously can't imagine what it would be like going back to moving funds around using 20th century technology.
"I seriously can't imagine what it would be like going back to moving funds around using 20th century technology."
I can: It would be like not losing 70% of the value of my business' funds.
Seriously, with Bitcoin currently at $273, anyone who bought bitcoin within the last year is seriously under water...
Bitcoin's inflation means it can't sustain itself in a bear market & it's a victim of it's own success as more utility is actually bad for Bitcoin.
It's volatilty means retailers can't hold it, so a sale in Bitcoin equates to a sale of Bitcoin, this is important to grasp.
The alternative is stable BitAssets by BitShares, currently no.5 by market cap. They solve the volatility problem and as they require 300% collateral at creation a little demand goes a long way. I got into Bitcoin at $40-ish, mostly got out in the $500-700 range. Stable decentralised assets are what solves Bitcoin's problem. Think about a decentralised USD in high inflation countries.
"I got into Bitcoin at $40-ish, mostly got out in the $500-700 range."
So what you said is that it was a speculative move on your part since you aren't holding your Bitcoins for transactional purposes. Just wanted to see how high speculators could drive it and make some money speculating with them. Speculation does seem to be what Bitcoin is all about.
Originally for me it was part of a SHTF hedge and speculative as I believed the deteriorating financial situation and government over-reach would drive people to decentralised alternatives. Cyprus proved that to be true and BTC functioned as I expected given a catalyst. Part of my reason for divesting was a centralisation of mining problem. (Hashing power concentrates in a handful of pools, so it's hardly decentralised.) I've dabbled in others but the majority of their business models are flawed. BitShares is the first one I can confidently back even though if I went into detail I could point out some faults. Their killer app, fully decentralised and 300% collateralised BitAssets that hold the value of major currencies & commodities are the nuts though. It's the big story of 2015, you'll see. It's possible a competitor Ethereum, scheduled for release in March could steal their thunder but the developers on that are confessed Keynesian's so I doubt it, their approach to stable currencies is whack so far.
I'm way more interested in Ripple, and even Stellar too, as exchange platforms, than I am in Bitcoins. BTC doesn't seem as efficient when opperated as a decentralized exchange. As far as I can tell bitcoin is currently wrapping up its show and about to fade into history. BTC gateways like Bitstamp have adopted the protocol, and gateways that focus on XRP like Snapswap are doing well. New gateways seem to be popping up more often as time goes by.
I dislike CBs as much as anyone who sees through the scam and I would welcome an alternative that isn't controlled by CBs/GS, but internet access is not a divine right (especially when your service can be shut down for an anti-govt tweet with no notice). Bitcoin is an interesting experiment and a refreshing proposal, but it is not exactly the second coming of the messiah.
Yeah I'm not in Bitcoin anymore. It's clearly an unsustainable business model long term. You make a good point about Internet access. As I mentioned I'm all about stable assets this year. This was the right thread to get in first, if nothing else to point back to at the end of the year. BitGold & BitSilver don't hold a candle to my phyzz but they have a place in my portfolio because they can't be confiscated, seized, global 10 second transactions and they pay interest which will be a big deal this year for BitCurrencies too as negative interest rates become more widespread.
how cute Deutsche Bank describes the currency of it's "host" as "local currency". this is actually the only cute thing about that monstrosity
Does anyone need a ruler?
Here's an online template which you can print to create one, though bigcharts calls it "10-year Spanish bond yields".
Organic market my arse.
http://www.bigcharts.com/quickchart/quickchart.asp?symb=BX%3ATMBMKES-10Y...
Heard a bob puissant radio minute this morning with 2015 predictions. Said Russian default? Doubt it
Defaults are for people or countries hopelessly in debt. That would NOT be Russia. Let me think...
Its about time the Chinese woke up and realized that paper assets are where you want to be. Not physical stuff like real estate. Certainly not gold.
As long as most people continue to fund real estate through massive mortgages and leverage then real estate is paper too.
50 on oil. Good night, nurse.
The value investor in me has been so bored with this market for so long, it's tempting. Not doing anything until rig count bottoms out in any case, we'll see what information develops.
How to spell RiGgeD?
"Don't fight the fucking Fed."
"groupthink herd of beta-levered momentum chasers known as hedge funds were mostly long the S&P and short Treasurys" ...really?
Oil and silver at the bottom of the barrel?
What could possibly go wrong?
2014 the year of the paper.
I thought the Long Treasury returned something like 25% plus?
why does the chart show US govies returning 10%'ish?
Mr. Raoul Pal sharing some thoughts on the dollar and other macro themes.
http://mauldin.realvisiontv.com/3947311990001