Hedge Fund Investor Survey A recent survey of hedge fund investors showed that many of them, over 50% are satisfied with their alternative investment or hedge fund investments right now. Only 30% of this same group were satisfied with their stock and bond investments. I thought this would be interesting to post here and important because it cuts through the bias placed upon the reporting on hedge fund blow ups, billion dollar take downs and locks ups that we have seen a lot of in the mainstream news outlets. Here is an excerpt from another blog posts on this subject: The survey, of 400 clients with $3 million or more in investible assets, ...

Lisa Hess, a Forbes contributor, recommended repositioning portfolios to take advantage of new world of rising oil prices, rising inflation, and uncertain monetary policy. Stocks and Bonds do poorly, according to Hess, because bond prices go down as inflation forces up interest rates and stocks go down as companies have a hard time keeping selling prices ahead of rising inputs.

What to do:

1. Short U.S. Treasurys

a. UltraShort Lehman 20+ Year Treasury (TBT)- bets against long maturities

b. UltraShort Lehman 7-10 Year Treasury (PST)- bets against shorter term maturities

2. Invest in companies that profit from rising demand of commodities

a. Titan International

- makes huge tires for agricultural machinery

b. Hemisphere GPS

- manufacturer of GPS and steering systems for tractors

- devices improve productivity

- trades at 38x but earnings could double each of next few years

- widespread adoption of GPS for large scale farming is inevitable

c. American Commercial Lines

- barge manufacturer

- operates barges moving grain,

...

There is an alleged ancient Chinese curse, “May you live in interesting times.”

While there is no historical proof of the origin of that curse, there is ample current proof in the securities markets that we are living in interesting times. It’s simply nasty out there — or at least it feels that way.

The image shows the year-to-date performance of six key asset classes:

US Total Stk Mkt (VTI)
Non-US Developed Stk Mkts (EFA) - excludes Canada
Emerging Markets (EEM)
US Equity REITs (VNQ)
Commodity Basket (DJP)
US Aggregate Bonds (AGG)

Commodities are up, REITs are up but rolling over, and everything else (stocks and bonds) is down.

Click image to enlarge

That made us think about advice from Warren Buffet for difficult times. Here are some of his comments that may be relevant as investors watch wilting portfolios:
Occasional outbreaks of those two super-contagious diseases, fear and greed, …