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Hyrcania

Hyrcania
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  • Already up on the day, crude oil flies higher on a report of an attack and explosion on a Saudi pipeline. WTI crude (USO) +2.3% to $109.48, Brent crude (BNO) +3.7% to $127.20.  [View news story]
    Fool --

    Iranians don't benefit from increased oiled prices. They export oil and import gasoline, which they then subsidize. Higher oil prices means higher gasoline prices.
    Mar 1, 2012. 04:04 PM | Likes Like |Link to Comment
  • The Truth About Asset Allocation And Active Management [View article]
    Re: 5. As cited in David’s article, asset allocation is a determinant of variability. What you are describing is a completely different activity which is rebalancing. It also presupposes that the only way to rebalance is to sell positions which have grown and buy additional holdings which have underperformed. Nothing could be further than the truth. You can easily rebalance say, an equity allocation, by simply selling equities who’s growth prospects or intrinsic value estimates have altered. In conjunction with a better opportunity in the fixed income side of the portfolio, a rebalancing can occur. There exists much more potential for thoughtful rebalancing than simply selling your winners and buying back a losing asset class. It also presupposes that it was the asset class in general that contributed to the performance and not individual holdings which as stated, can be managed thoughtfully.

    Re: 6. This should be apparent to anyone who has any business investing. However I don’t understand your last sentence regarding deciding how often decisions need to be made. Periodic reviews are a traditional part of asset management, but the portfolio monitoring does not stop there. Active portfolio management entails responding to any developments identified, either by yourself or teams of analysts as time passes with respect to each holding. This is an extremely time consuming task (which is why I state “teams of analysts” who are consulted to get the best of their insight.) The portfolio manager must be ready to respond to these changes and reconcile them with their individual investment theses pertaining to each specific holding. In your portfolio of 25 stocks this is not an activity that occupies three hours after breakfast every day.

    Re: 7. The average management fee on a balanced portfolio should be in the neighborhood of 1%, 2% at the highest. If that is considered 50% of your return, then you obviously are getting a very poor level of performance that could be matched by bank CD. No asset manager that has survived decades of market turbulence made a reputation by delivering only twice their investment fees. As management fees are based on assets under management, they are aligned with the investors interests – increasing the principal of the portfolio and managing volatility.

    There is no basis for saying the money management industry predicates “fear” – this is just another specialized industry. Mechanics can be accused of holding you back from working on your car for “fear” of not knowing what you are doing and ruining something or hurting yourself. The fact is that investing can be quite complicated, especially if you are at a life stage where you have a specific determined level of income you are trying to generate, or some other goal you are trying to reach on a risk managed basis. No good investment advisors want their clients to fear anything, rather the desire is to EARN trust through prudent management and service delivery.

    You also have no standing to say the industry hides behind “jargon and numbers that misleading and deceptive.” This is one of the most regulated industries in the world and there are globally accepted, often mandated, performance reporting and disclosure requirements designed so that investors can make informed and prudent decisions.

    I’m sorry, but you are completely mistaken in your understanding of Beta.

    Beta is not the same thing as variance which is what you are identifying. Beta is a product of the correlation coefficient times [the variance of the stock/variance of the market]. It takes it to account the movement of the security with the market, and its directionality.

    The only thing I can agree with your writing, which again I am sorry to say reads more like conspiracy theory against an industry that you resent for some reason, is that investors should always think for themselves. This applies to all individuals employing the service of anyone to do anything. You should know, based on your stated experience, that in this business the investment advisors are (or rather should be) working at the behest of the clients in their comfort level and their understanding of their own investments. It is a relationship built on trust and understanding, not blind authority – and investors are plenty bold enough to understand this.
    Feb 21, 2012. 04:06 PM | 1 Like Like |Link to Comment
  • The Price Of Gas Is Outrageous, And It Is Going To Go Even Higher [View article]
    The late Matt Simmons did excellent research on this issue over a decade ago and should be the first source to consult.

    The era of cheap, easy to obtain oil has long passed and it isn't limited to gasoline/energy by any means.

    Decades to come, this will seem like a memory of heaven.
    Feb 21, 2012. 12:47 PM | 1 Like Like |Link to Comment
  • The Truth About Asset Allocation And Active Management [View article]
    Points 1 and 3 are only valid.

    Point 3 actually gives further credit to active money management, one example is through Value investing and at its most basic with a Buffet approach. Value investing by defintion is identifying a company who's intrinsic value is thought to be higher than its current price based on individual research and investment outlook. One could make the argument that it is possible to identify an actually overvalued stock as undervalued by mistake, but in practice this often means buying stocks which are out of favor. You are correct in your assertion that it is difficult, which is where the talent and art of active management lies. One would only buy high and sell low if they rely on favoritism for stock selection.

    I would advise against wording criticism as in point 4, with all due respect it appears needlessly resentful of individuals who give investing the academic attention it deserves and the professionals who have been successful in managing their clients money. If investing prudently and risk management were simple, investors wouldn't hire professionals to manage their money - professionals with proven performance track records of research-based investing at lower levels of volatility. That is precisely the point of the very well-written article: asset allocation is not sufficient without active management.
    Feb 17, 2012. 03:14 PM | Likes Like |Link to Comment
  • Alliance Bernstein Vs. S&P 500 Call Options [View article]
    I understand how you are thinking about this but I would suggest taking a couple things in to consideration.

    First, the charts of AB against the SP are very divergent beginning in summer of 2010. From a technicial standpoint, you would expect to see profitability lag the SP, yet what we are seeing is actual divergence, this tells you that profitability is not related to the SP price.

    Another aspect to consider is AUM does increase with general upward market movement for existing assets, but this is independent of flows out of the firm. There have been studies believe it or not, which asset managers frequently refer to internally, that performance is actually a third of fourth reason clients move their assets away from the firm - the first is frequency of contact with advisors and client servicing issues. You'd be surprised how much private investors will stick with a strategy if the trust in the advisor is established or if they perceive difficulty in finding another advisor.

    The last aspect I would challenge is that cost base is fixed. While it can be said that employee salaries are somewhat fixed and that bonuses are market performance based, this doesn't take into consideration attritition. When firms lose advisors, they often recruit "more expensive" talent from other firms in the hopes that flows will increase with an existing book of business that she/he can bring over. Also factor into account potential losses from strategies going sideways/down.

    One other very important point - AB is a limited partership with a distribution required to investors. Changes to the distribution will be a major, arguably the most important, factor in valuation.

    Best,
    N
    Feb 8, 2012. 01:45 PM | Likes Like |Link to Comment
  • Brent crude falls off 1% and WTI crude trims 0.6%, seemingly oblivious to a little more squawking from Iran's navy chief about how "easy" it would be for the nation to block the Strait of Hormuz. (previous[View news story]
    Iranian goverment officials and clergy are liars and fools. The Iranian military are neither.
    Dec 28, 2011. 04:54 PM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    The lengths you people go to justify the absurd is pathetic.

    Any light(not coming from the sun) that you are referring to could only have been created PRIOR to the creation of the EARTH, on which the plants that were "created" could not use the light-not-coming-from- the Sun... for photosythesis.

    Plants, and no life really, can exist on a planet like ours without the Sun.

    And be the way genius, the Moon doesn't emit light whatsoever - the only reason you can see it is because it is reflecting the light of the SUN.

    The REAL truth, is that you're an idiot.
    Nov 18, 2011. 11:50 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    It's terrifying really.
    Nov 17, 2011. 11:40 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    Since I seem to know your stupid religion better than you - let me remind you:

    (1:11-13) "Let the earth bring forth grass"
    Plants are made on the third day before there was a sun to drive their photosynthetic processes (1:14-19). Notice, though, that God lets "the earth bring forth" the plants, rather than creating them directly.

    THIRD DAY, SON.

    You belive in desert fairy tales.
    Nov 17, 2011. 11:38 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    You are such an embarassment:

    (1:3-5, 14-19) "Let there be light"
    God creates light and separates light from darkness, and day from night, on the first day. Yet he didn't make the light producing objects (the sun and the stars) until the fourth day (1:14-19). And how could there be "the evening and the morning" on the first day if there was no sun to mark them?

    There are no LIGHTS in the firmament until:

    1:14 And God said, Let there be LIGHTS in the firmament of the heaven to divide the day from the night; and let them be for signs, and for seasons, and for days, and years:

    Idiot.
    Nov 17, 2011. 11:36 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    Fool.

    I am familiar with every old map - The Persian Empire extended to parts of Bulgaria at one time - that has nothing do with your completely erroneous definition of what "Persia" means.

    And I could care less about Israel, Egpyt or Palestine.
    Nov 17, 2011. 11:33 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    *1941
    Nov 15, 2011. 11:42 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    All excellent comments Strike - you are 100% on target, especially giving up arguing with this complete lunatic.

    I don't know what it is about web forums/blogs/comments that attract religious fanatics - whether its Benz forums or Stock sites - but I have learned the hard way to never engage them, tempting as it may be to point out their childlike inadequacies.
    Nov 15, 2011. 11:39 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    hahahah!!

    Don't forget the creation of plants before the creation of the Sun (which plants require for photosynthesis) and then almost as an afterthought, the creation of the TRILLIONS of stars.

    These books are complete bullshit.
    Nov 15, 2011. 11:36 AM | Likes Like |Link to Comment
  • 5 Reasons Why Israel Will Not Attack Iran - But If It Does, How Will Currencies React? [View article]
    That is the absolute stupidest comment in this collection of absolute stupid comments.

    Iran has always been Iran - Persia is merely the name of one of one major subset of Iranians that had several large, long-standing empires that include the countries you refer to at one point or another. "Persia" was also encouraged to be used by the stupid Allies to downplay Aryan history in Iran(Iran literally means "Land of Aryans"), a subject of interest by the Axis powers on the verge of an alliance before an Allied invasion in 1940.

    This information is available to you in a kindergarten library.

    You can also find a book on Afghanistan and Pakistan and figure out why there would never be a military alliance with those countries - especially Afghanistan - that's hilarious.
    Nov 15, 2011. 11:34 AM | Likes Like |Link to Comment
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