Warren Buffett

The Financial System Is Breaking Down At An Unimaginable Pace

Now it’s $13 trillion... the total sum of negative-yielding debt in the world has increased in the last sixteen days alone by an amount that’s larger than the entire GDP of Russia. And just like the build-up to the 2008 subprime crisis, investors are snapping up today’s subprime bonds with frightening enthusiasm. So this trend will continue to grow for now, until, just like in 2008, the bubble bursts in cataclysmic fashion.

Iconic Hedge Fund Sequoia Explains Why It Liquidated Its Entire Valeant Stake

"Our new leadership elected to sell our position in Valeant Pharmaceuticals, exiting completely by mid-June. Valeant was our largest position to start the year and its 80% decline through June 30 badly penalized our results. For the first half, Sequoia generated a negative 13.2% return vs. a positive 3.8% return for the S&P 500 Index."

The Chinese Will Need Another Bailout

Here we go again. China is primed for more bailouts as their corporations and State Owned Enterprises (SOE) continue burning through billions of yuan.

China To Use Pension Funds As $300 Billion "Plunge Protection Team"

The country’s local retirement savings managers, which manage about $300 billion, are handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities including equities. Why the shift? Simple: to help stabilize markets during the next rout. During last year’s tumble, policy makers armed state-run investing company China Securities Finance Corp. with more than $480 billion to try and limit declines. Now it's the pensions' turn.

Morgan Stanley Lists The Ten Excuses Hedge Funds Give For Bad Performance

The alpha from the HFRI long-short index was close to 14% per annum in the early 1990s, and has been slightly below zero for the past few years. Why is this? We don’t claim to have some systematic rank ordering of reasons for the decay in performance, but here are ten thoughts.

Why The Next Decade Will Foil Financial Plans

"This time is 'not different'. The only difference will be what triggers the next valuation reversion when it occurs. If the last two bear markets haven’t taught you this by now, I am not sure what will. Maybe the third time will be the 'charm'."

Nothing Lasts Forever

As the man who perhaps best rode the coat-tails of an ever-increasing wave of American credit expansion exceptionalism (only to come undone in recent times as that game ends), it is no surprise that Warren Buffett explained in February that "for 240 years it’s been a terrible mistake to bet against America, and now is no time to start." We don't mean to rain on his parade too much, but the following charts suggest "nothing lasts forever" and time is ticking...

Legendary Investor Paul Tudor Jones Cuts Hedge Fund Fees As A Result Of Poor 2016 Performance

One month after news that legendary investor Paul Tudor Jones' $11.6 billion hedge fund Tudor Investment had seen some $1 billion in redemptions as a result of poor performance and the exit of several money managers, some of whom spent decades at the firm, the inevitable next step has followed: Tudor is trimming the fees it charges some clients in its biggest fund amid losses this year.

Tim Price: Why I'm Voting To Leave The European Union

On 23 June 2016, this British citizen will be voting to leave the European Union. To me it’s clear: the EU has not only become too big for its own good, it’s too big to do hardly anything good. Back in 1975 when the UK first confirmed membership in the EU (when it was called the European Economic Community), it made sense. But the EU didn’t turn into a peaceful, efficient, multi-national trading bloc that enables commerce and prosperity. Rather it has become an ever-expanding, unaccountable bureaucracy ruling over vastly disparate nations who are increasingly at odds with one another.

Frontrunning: May 17

  • As Brexit vote looms, U.S. banks review their European commitments (Reuters)
  • Oil’s Strength Continues to Boost Global Stocks (WSJ)
  • Trump closing gap with Clinton, poll shows (Hill)
  • In Adjacent Pennsylvania Counties, Republicans Are Split on Donald Trump (WSJ)
  • Make America Gold Again: Calls for Everyone's Favorite Standard Are Back (BBG)

Soros Makes Gold His Largest Holding As He Cuts Equity Exposure To Lowest Since 2013, Doubles S&P Puts

One of the more closely watched 13F reports yesterday in addition to that of Warren Buffett was that of Soros Fund Management, the family office of George Soros, which revealed that while the 85 year old billionaire was not quite as bearish as his former chief strategist Stanley Druckenmiller, or Carl Icahn for that matter, had turned decidedly sour on overall equity exposure.

Apple Jumps After Berkshire Reveals 9.8 Million Share Stake

After three consecutive weeks of seemingly relentless bad news for Apple, moments ago the stock jumped by $2 dollars, rising from $90.5 to over $92.50. There was some confusion as to why the jump and then it was revealed that none other than that "other" billionaire, Warren Buffett, has decided to start building a stake in the world's biggest cell phone company to the tune of 9.8 million shares or about $1.07 billion as of March 31.

Frontrunning: May 16

  • European Stocks Fall as Chinese Economic Data Disappoint (WSJ)
  • Oil Climbs to Highest Since November as European Shares Retreat (BBG)
  • Yen weakens on Japan intervention talk before G7 meets (Reuters)
  • Wall Street’s Bond Forecasters Splinter as Fed Credibility Wanes (BBG)
  • Amazon to Expand Private-Label Offerings—From Food to Diapers (WSJ)
  • Oil prices rise on Nigerian outages, Goldman forecast (Reuters)