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CurAlea Associates LLC is an independent risk and due diligence advisory firm focused on hedge funds and family offices.

Thursday, September 26, 2013

Hedge Fund Man

Hedge Fund Man - by Peter Ort

He's a PM and a trader
He's got a signal turning green
He's a restless young risk taker
Wants to run the big money
He's got no problem with his high fees
And his lockup is secure
He's cleaning up his network
To keep his sources pure

Learning to lower the beta of the Old World Man
Learning to make the alpha like a New World Man

He's bought some concentrated stakes
And learned when to sell and apply the brakes
He's old enough to know what options to write
But young enough to confuse it
He's noble enough not to take in too much cash
But weak enough not to refuse it
He's a Hedge Fund Man...

He’s got activism fever
Spin off your factories and farms
He's a fighter and no stranger
To the sell side and their charms
He's got market timing power
With quant models on patrol
He's got to watch the advance/decline line
And keep his risk control

Trying to double the pay of the Old World Man
Buying a Swiss chalet like a New World Man

He's forgotten the drawdown of yesterday
He knows a high water mark is here today
He's noble enough to see his risk is not right
But weak enough not to defuse it
He's wise enough to raise a yard
But fool enough to lose it
He's a Hedge Fund Man...

Learning to lower the beta of the Old World Man
Learning to make the alpha like a New World Man
He's a Hedge Fund Man...
He's a Hedge Fund Man...
New World Man – by RUSH

He's a rebel and a runner
He's a signal turning green
He's a restless young romantic
Wants to run the big machine
He's got a problem with his poisons
But you know he'll find a cure
He's cleaning up his systems
To keep his nature pure

Learning to match the beat of the Old World Man
Learning to catch the heat of the Third World Man

He's got to make his own mistakes
And learn to mend the mess he makes
He's old enough to know what's right
But young enough not to choose it
He's noble enough to win the world
But weak enough to lose it
He's a New World Man...

He's a radio receiver
Tuned to factories and farms
He's a writer and a ranger
And a young boy bearing arms
He's got a problem with his power
With weapons on patrol
He's got to walk a fine line
And keep his self-control

Trying to save the day for the Old World Man
Trying to pave the way for the Third World Man

He's not concerned with yesterday
He knows constant change is here today
He's noble enough to know what's right
But weak enough not to choose it
He's wise enough to win the world
But fool enough to lose it
He's a New World Man...

Learning to match the beat of the Old World Man
Learning to catch the heat of the Third World Man
He's a New World Man...
He's a New World Man...

CurAlea Clips - September 26, 2013

  • 6% YTD outperformance of US small cap stocks (Russell 2000 +27.6%) vs large cap stocks (Russell 1000 +21.4%)
  • 22% YTD outperformance of top performing S&P sector (Consumer Discretionary +28.5%) vs worst performing S&P sector (Telecom +6.4%)
  • Contact CurAlea Associates for a Daily Market Review
 

Tuesday, September 3, 2013

August 2013 - Monthly Commentary



August 2013 Monthly Commentary - Please contact CurAlea Associates for a Daily Market Review.
August was a month of heightened risk aversion within the context of the relative calm that has pervaded most global asset markets in 2013.  The combination of geopolitical tensions in Egypt and Syria, ongoing concerns over the tapering of the Federal Reserve’s asset purchases, the continued rise in US treasury interest rates, and the looming dual deadlines of a September US government shutdown and October debt default impacted global asset markets. 
Almost all major developed market equity markets fell in August, led by a 3% fall in the S&P 500.  There was fairly large dispersion across US sectors, with the worst performing sectors down 5% (Financials and Utilities) and the best performing sector flat on the month (Materials).  The trend of large cap value outperforming growth since early 2012 reversed sharply in August.  While Emerging Market equities were roughly flat in local terms and down 1.7% in USD, there was very wide dispersion here as well with the biggest losses in Indonesia (-10%), Philippines (-9.4%), and Thailand (-8.7%) and the biggest gains in Argentina (+12.3%), Korea (+2.6%) and China (+2.4%).   
In currencies, the USD Index was up 0.8% in August, with gains against all major developed market currencies except the British Pound, which strengthened by 2% versus the USD.  The dollar was also stronger against most emerging market currencies with the exception of the Korean Won, Taiwan Dollar, and Chinese Yuan; the weakest emerging market currencies were the Indian Rupee (-9.1% and consistently hitting new record lows versus the USD during August), Indonesian Rupiah (-9%), Turkish Lira (-5.1%), and Mexican Peso (-4.9%).
US Treasuries moved lower again in August, with continued yield curve steepening.  10 year rates closed the month at 2.78%, up from 2.58% at July month end, but down from the 8/21 intra month high of 2.89%.  Investment grade and high yield US credit spreads widened in August, while European sovereign spreads were largely unchanged with the exception of Portugal, which widened.
In commodities, the GSCI index closed up 3.4% in August, led by strength in Precious Metals (+7.9%), Energy (+4%), Livestock (+2.2%), Industrial Metals (+1.8%), and Agriculture (+0.4%).  Within individual commodities, Silver led gains (+19.5%), followed by Soybeans (+12.5%), Platinum (+6.8%), Gold (+6.3%) and Brent Crude (+5.8%); Coffee was the weakest performer (-4%), followed by Sugar (-3.7%), Wheat (-3.5%), Cotton (-2%), and Corn (-1.2%).