“Western politicians just can’t help themselves”, said an Asian equity portfolio to Spy this week. “If they make idiotic statements at home, that is one thing, but coming out to Taiwan and grandstanding, as Nancy Pelosi has done this week, is downright bonkers no matter how one feels on the issue.” Now we have warships and warplanes zooming around the place. Has Ukraine taught the great and the good, anything at all? The only winner seems to have been gold, which has emerged from its slumber and rallied fifty bucks.
Has BlackRock’s decision to partner with digital currency exchange, Coinbase, finally provided the crypto world with the credibility it needs to get thriving again, wonders Spy? Coinbase shares rallied more than 10% yesterday when the news was announced. This comes on the back of a rally in Bitcoin itself over the last few weeks from $19,000 to just over $23,000, at the time of writing. “Our institutional clients are increasingly interested in gaining exposure to digital-asset markets,and are focused on how to efficiently manage the operational life cycle of these assets,” Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, said in the statement. What does this all mean? Spy guesses that integration of digital assets into the real-world financial services will continue to accelerate.
The S&P 500 hit the low for the year on June the 17th. And then, as markets are wont to do, we have had a rather fun rally. The S&P is now up 14% for the brave souls who took the plunge that day. The question that is running across investors’ minds: is this a large dead cat bounce or the beginning of something longer lasting? Some funds have had a spectacular month. In the last 30 days or so, BNP Paribas’s US Growth Classic is up 16%, so is BlackRock’s US Growth. The absolute winner is Morgan Stanley’s US Advantage – up 25%. Take profits or hold on for the ride?
Another week, another ETF that promises dividends. Touchstone, an US-based asset manager has just launched The Dividend Select ETF with the rather useful ticker, DVND. This is a vanilla-flavoured active ETF that will, apparently, include 40-55 dividend paying stocks. With the rapid pace of ETF roll outs, covering every possible sector and asset class, it got Spy wondering if the traditional mutual fund structure has any significant benefit for investors whatsoever? Is the old concept of locally regulated funds even applicable in the era of decentralised finance, when all strategy types are accessible on cross-border exchanges? It usually takes regulators years to catch up with the market and this area remains particularly unpoliced.
Ever heard of Marcho Partners? Neither had Spy until this week. Marcho is a tech-focussed hedge fund that is based in London. Why should you care? This fund had at least $1bn in AuM at its peak, but is has had a shocker of a year and that money has evaporated. The entire strategy is down a whopping 84% since the 1st of January, which must be something of a record. Tech certainly had a bad start to the year but to get things so spectacularly wrong takes some extra skills. Spy is not too surprised that when visiting Marcho’s website, apart from the name of the company and an address, no other information is being offered.
Every summer, something bizarre happens which raises a few eyebrows of those people sitting on the beach drinking their gins and tonic. For 2022 the crazy rally in AMTD Digital shares must take the cake. What made the tiny Hong Kong financial company rally from $7.80 to $2,555.30 at its peak? Another ‘meme stock’ rally it seems. The stock has now fallen back rom its highs to the still completely insane price of $846, giving this tiny business a market capitalisation of $155bn. Goldman Sachs is ‘only’ worth $114bn, Morgan Stanley is worth $147bn and Barclays about $47bn. Spy is not usually one for giving out tips but this must, surely, offer the short of the century.
As inflation rages across the world and academics, talking heads, central bankers and sundry pundits give their views, Spy remains convinced that alcohol and money printing is by far the best comparison. Alcohol and printing money both feel very good at first and the effects are terribly exciting and happen rather quickly. But, soon, the party stops being fun and if one stops drinking or stops printing money, the tricky thing is that the benefits do not flow through for a while. The alcohol is already in your system and the inflation is out there too. Even without a further drop of alcohol, the hangover still needs to be endured. So too with inflation.
Friday fun fact: In Cluj-Napoca, Romania, you can pay for your bus ticket by completing 20 squats in 2 minutes. A device, apparently, measures the squats and then issues a bus ticket that is valid for a trip into the city. Spy is all too aware that obesity is a modern curse. Too many fun things to eat and drink, too many easy ways to avoid exercise. Yes, Netflix, I am looking at you.
In Singapore, Spy’s photographers have seen HSBC pushing some sustainable wealth solutions to their Premier customers.
Until next week…
