Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Investment’

BlackRock v Blackstone

Posted by hkarner - 15. Januar 2018

Date: 11-01-2018
Source: The Economist: Schumpeter

Mirror, mirror on the wall, who is the mightiest finance tycoon of them all?

THE two most successful entrepreneurs on Wall Street of the past two decades work on opposite sides of Park Avenue. Larry Fink, 65, is a Democrat whose hand is glued to a Starbucks cup and who runs BlackRock from 52nd Street. Stephen Schwarzman, 70, is a Republican who wears striped shirts with plain collars and runs Blackstone from between 51st and 52nd. The two are ex-colleagues, but have sharply opposing views on investment and management. Their trajectories illustrate how finance is changing. Mr Fink, once the underdog, is on top.

His firm, BlackRock, is the world’s largest asset manager, with $6trn of assets. It stands for computing power, low fees and scale, and is booming. Mr Schwarzman’s firm, Blackstone, is the largest “alternative” manager, focused on private equity and property, with $387bn of assets. It stands for a time-honoured formula of brain power, high fees and specialisation. Lately, it has trod water. Den Rest des Beitrags lesen »

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Many happy returns: new data reveal long-term investment trends

Posted by hkarner - 6. Januar 2018

Date: 04-01-2018
Source: The Economist: Free exchange

Property yields more than shares and bonds; investment returns outstrip economic growth

DATA-GATHERING is the least sexy part of economics, which is saying something.

Yet it is also among the most important. The discipline is rife with elaborate theories built on assumptions that turned out to be false once someone took the time to pull together the relevant data. Accordingly, one of the most valuable papers produced in 2017 is an epic example of data-retrieval: a piece of research that spells out the rates of return on important asset classes, for 16 advanced economies, from 1870 to 2015. It is fascinating work, a rich seam for other economists to mine, and a source of insight into some of today’s great economic debates.

Rates of return both influence and are influenced by the way firms and households expect the future to unfold. They therefore find their way into all sorts of economic models. Yet data on asset returns are incomplete. The new research, published as an NBER working paper in December 2017, fills in quite a few gaps. It is the work of five economists: Òscar Jordà of the San Francisco Fed, Katharina Knoll of the Bundesbank, Alan Taylor of the University of California, Davis, and Dmitry Kuvshinov and Moritz Schularick, both of the University of Bonn. (Messrs Jordà, Schularick and Taylor have spent years building a massive collection of historical macroeconomic and financial data.) For each of the 16 economies, they craft long-term series showing annual real rates of return—taking into account both investment income, such as dividends, and capital gains, all net of inflation—for government bonds and short-term bills, equities and housing. Theirs is the first such data set to gather all of that information for so many countries over so long a period. Den Rest des Beitrags lesen »

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Investors: 3 Things That Can Go Wrong in 2018

Posted by hkarner - 23. Dezember 2017

Date: 22-12-2017
Source: The Wall Street Journal

Don’t luxuriate in the incredible market gains of 2017. Here are the most important risks of the year ahead

In the international markets, a stronger dollar would hurt overextended emerging-markets borrowers. In the past these were mostly sovereigns, but since the 2008 crisis it has been EM corporates that leveraged up.

Investors who spend their holidays looking back at what’s happened this year will be wallowing in happy nostalgia, as virtually every asset went up. But investing is about the future, not the past, so break away from the complacency-inducing returns of 2017 and think about what could go wrong.

A look back at what went right is a helpful way to frame the question. Here are three big things that didn’t happen in 2017, and could hurt:

Monetary tightening. The Federal Reserve raised rates three times this year, yet it became easier to borrow and over long periods actually got cheaper. Instead of rising, long-dated bond yields fell, and global monetary conditions were further eased by the weakness of the dollar. The Chicago Fed’s National Financial Conditions index is at the loosest since January 1994, the year that surprise Fed tightening crushed the bond markets. Den Rest des Beitrags lesen »

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Intangible assets are changing investment

Posted by hkarner - 21. Dezember 2017

Date: 19-12-2017
Source: The Economist: Buttonwood

Forecasting profits is not as helpful as it used to be

WHEN you work as an equity analyst at an investment bank, your task is clear. It is to comb all the statements made by corporate executives, to scour the industry trends and arrive at an accurate forecast of the company’s profits. Achieve this and your clients will be happy and your bonus cheque will have many digits.

But is all this effort worthwhile? Not as much as it used to be, according to Feng Gu and Baruch Lev, writing in a recent issue of Financial Analysts Journal*. The authors imagined that investors could perfectly forecast the next quarter’s earnings for all companies. They then assumed that investors bought all the stocks that they expected to meet or beat the consensus of analysts’ forecasts; and that investors could short (ie, bet on a declining price) the stocks of those that were predicted not to reach their estimates. They made their investment two months before the end of a quarterly reporting period and got out of their positions one month after the quarter ended (by which time the earnings have been reported).

In the late 1980s and 1990s, this would have been a highly successful strategy, achieving excess returns (over those achieved by stocks of similar size) of 4% or more every quarter. But these abnormal returns have dropped: in recent years they have been only 2% a quarter. A similar effect appeared when examining the returns that would have been achieved by perfectly predicting those companies that achieved annual earnings growth. Den Rest des Beitrags lesen »

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Millennials are coming into money and want to invest it responsibly

Posted by hkarner - 24. November 2017

Date: 24-11-2017
Source: The Economist
Subject: Generation SRI: Sustainable investment joins the mainstream

IN 2008, when she was in her mid-20s and sitting on a $500m inheritance, Liesel Pritzker Simmons asked her bankers about “impact investing”. They fobbed her off. “They didn’t understand what I meant and offered to screen out tobacco,” recalls the Hyatt Hotels descendant, philanthropist and former child film star. So she fired her bankers and advisers and set up her own family office, Blue Haven Initiative. It seeks investments that both offer market-rate returns and have a positive impact on society and the environment. “Financially it’s sensible risk mitigation,” she says. “Our philanthropy becomes far more efficient if we don’t need to undo damage done in our investment management.”

Such ideas are gaining ground, particularly among the young. Fans of “socially responsible investment” (SRI) hope that millennials, the generation born in the 1980s and 1990s, will drag these concepts into the investment mainstream. SRI is a broad-brush term, that can be used to cover everything from divestment from companies seen as doing harm, to limiting investment to companies that do measurable good (impact investing). The US Forum for Sustainable and Responsible Investment, a lobby group, estimates that more than a fifth ($8.7trn) of the funds under professional management in America is screened on SRI criteria, broadly defined, up from a ninth in 2012 (see chart). Den Rest des Beitrags lesen »

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Wer investiert verantwortlich?

Posted by hkarner - 23. November 2017

Die genau Definition inkl. Kommentar: CRIC Definiton veranwortlich Investierender inklusive Kommentierung

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Another Sign Europe Is Over Crisis? Its Companies Are Investing at Home Again

Posted by hkarner - 29. Oktober 2017

Date: 27-10-2017
Source: The Wall Street Journal

After chasing growth abroad for years, large eurozone corporations are expanding their footprint in Europe as region’s economy picks up

European business is coming home.

Daimler AG is planning to spend billions to get its German factories ready for an electric-car push. Property giant Unibail-Rodamco SE is expanding its shopping-mall footprint across the region and laser-equipment maker Trumpf GmbH has built a new distribution center in Germany to handle surging demand.

For years, European business has chased growth abroad, spending billions to build new factories in the U.S., Mexico, China, Brazil and other fast-growing emerging economies while investment in Europe languished. Now, as growth takes hold in Europe nearly a decade after the financial crisis, industry is investing in Europe again. Den Rest des Beitrags lesen »

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Income Investors: It’s OK to Be Sad, But Don’t Get Desperate

Posted by hkarner - 8. Oktober 2017

Date: 07-10-2017
Source: The Wall Street Journal By Jason Zweig

Old bull markets don’t produce new ideas. They just produce new ways for investors to hurt themselves with old ideas.

With stocks at record highs and the income on bonds not far from record lows, circumstantial evidence suggests investors are getting restless — if not desperate.

Chasing “yield,” or trying to get higher investment income, is one form of desperation. Last month, $1.6 billion in new money poured into exchange-traded funds holding high-yield corporate bonds, according to FactSet. Den Rest des Beitrags lesen »

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Investors are not great at predicting politics

Posted by hkarner - 12. August 2017

Date: 10-08-2017
Source: The Economist: Buttonwood

Wishful thinking may lead them astray

FINANCIAL markets are supposed to be the font of all wisdom, weighing up the information available and condensing it into a set of prices. Investors are presumed to have an insight into the future—falling bond yields are seen as a sign that the economy is slowing, for example.

But are investors that clever when it comes to politics? Gambling markets show how they assess political risk. They expected the Remain campaign to win the Brexit referendum and Hillary Clinton to become America’s president, and were proved wrong. Indeed, on Brexit, the mass of gamblers (the general public, in other words) backed Leave, but the odds were skewed by some wealthy punters who favoured Remain. Those rich gamblers were probably people who trade in financial markets; the plunge in the pound after the result suggests that most investors were caught on the hop.

Before the presidential election, most people on Wall Street to whom Buttonwood spoke thought that a victory for Donald Trump would be bad for the markets. But as the results came in, there was a sudden change of tone and both the dollar and equities rallied. Den Rest des Beitrags lesen »

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The Coming Financial Volatility

Posted by hkarner - 25. Juli 2017

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