Things from my Newsblur (was Google Reader, with a stop at Old Reader): Oct-12 Edition

Welcome to part 2 of this “Things from my…”, though you’ll notice that I cunningly waited till the calendar rolled over to October so that I didn’t have to mess around with the title! 

- The Erstwhile Hedge Fund King of Akron…
Seriously, how do people like this end up running someone’s money, what possesses people to entrust them with their hard-earned money, etc. (Roddy Boyd, Southern Investigative Reporting Foundation)

 - How Brazil’s Richest Man lost $34.5bn 
The fascinating tale (so far, at least) of the rise and fall of Eike Batista who built the OGX group of companies and whose personal wealth at $34.5bn made him one of the top 10 richest people in the world at the start of 2012…and who, as 2013 comes towards its close, is potentially on the verge of losing it all. (Juan Pablo Spinetto, Peter Millard, and Ken Wells, Businessweek)

 - Mayor Bloomberg’s Geek Squad 
With Mayor Bloomberg departing his role this year, this article helps shine a little light on one of his big successes – the Office of Policy and Strategic Planning.  It’s where Bloomberg most obviously used his business background with its focus on collecting/analyzing/using data, to…err well get the City to collect, analyze and use data to be more efficient!  (Alan Feur, New York Times)

 - 5 Statistical Problems That Will Change the Way You See the World 
Humans are instinctively bad at understanding statistics and probability; take a look at these (relatively simple) problems and see how bad…and how data can be misleading, especially if viewed on a surface level.  (Walter Hickey, The Atlantic)

The What If? Section  

This blog/site is so special it gets its own section – after all, haven’t you always wanted answers to the questions you’ve long pondered but never been smart enough to figure out?  Well, Randall Monroe, a friendly former NASA physicist takes the time to use physics to answer one of these questions each Tuesday.  Here are 5 (just 5, I know) of my favourites – though please note, it’s entirely possible that (i) a lot of small children submit questions, or (ii) Our Man thinks like a small child! 

- Yoda: How much force power can Yoda output?   

Sure, he’s small and green and uses the force…but how strong is the force – like, could he get it to power a car or a house or a city or a planet or what? 

- Machine Gun jetpack: is it possible to build a jetpack using downward firing machine guns? 

It’s fine if you’re in NZ where the Civil Aviation Authority has given out a permit for a jetpack but what about the rest of us…we need a plan B! 

- Leap Seconds: Every now and then we have to insert a leap second because the Earth’s rotation is slowing down. Could we speed up Earth’s rotation, so that we do not need Leap Seconds?

 As a bonus, you’ll also discover why your smartphone and desk phone have different times! 

-  Droppings: If you went outside and lay down on your back with your mouth open, how long would you have to wait until a bird pooped in it? 

I mean, who hasn’t wondered that! 

- Sunset on the British Empire: When did the sun finally set on the British Empire? 

SPOILER Alert - it still hasn’t, so deal with it people!

September 2013 Review

Portfolio Update 

- Currencies:  A position in YCS, which is Short the Japanese Yen vs. the US Dollar, was added to the portfolio near the end of the month.

Performance Review  

The portfolio rose by 134bps during August, which brought the YTD performance to -0.25%.  

Naturally, after Our Man talked about his bullishness on the US Dollar, it was the currency related positions that were the biggest detractors from performance.  The Dollar weakened against the Euro, Yen and Australian Dollar during the month, especially after the Fed decided not to taper, which led to the Currencies book (-80bps) and the China Thesis (-73bps, the L Chinese A-shares position helped reduce the loss within this book) posting sizable negative returns.  However, the strength of the Euro coupled with the rising markets meant these losses were more than offset by the Other Equities book (+201bps), where the exposure to Greece (+111bps) and Spain (+75bps) drove performance.  The rising equity markets, and continued good newsflow, helped the position in THRX appreciate during the month ensuring the Value Equities book (+71bps) was a strong contributor.  Elsewhere, the performance was fairly marginal; Absolute/Bond Funds (+14bps, helped by falling interest rates), NCAV (+1bps), Puts/Hedges (-9bps) and Energy Efficiency (+9bps).

Portfolio (as at 9/30 - all delta and leverage adjusted, as appropriate) 

15.8% - Other Equities (GREK, EWP and EWI)  

13.5% - Bond/Absolute Return Funds (DLTNX and HSTRX) 

9.0% - Value Idea Equities (THRX, and DRWI) 

1.0% - NCAV Equities 

0.3% - Energy Efficiency (AXPW, and XIDE) 

-0.2% - Hedges/Put Options (premium of 1bps in XLP Jan-14 puts, 5bps in XLB Jan-14 puts and less than 1bp in EWG Jan-14puts)

-12.3% - China-Related Thesis (CROC – Short Australian Dollar, partially offset by CAF – Long Chinese A-Shares) 

-38.9% - Currencies (EUO – Short Euro, YCS – Short Japanese Yen)

30.0% - Cash  

Disclaimer:  For added clarity, Our Man is invested in all of the securities mentioned.  He also holds some cash and a few other securities (of negligible value).  You should not buy any of these securities because Our Man has mentioned them, but should do your own work and decide what’s best for you.