In Case You Missed it (you did), 2013 Edition

We shared some of the most read posts of 2013 earlier this week, and today give you the 10 posts which we thought were pretty darn good, but which you just didn’t seem to have time to read (according to the stats). Maybe you’re new to the blog, maybe you were at your kid’s school play, maybe you just plain didn’t like what we had to say… Whatever the reason, here’s 10 posts that weren’t widely read (but in our humble opinion – should have been…)

1. “Hedge Fund Advertising – Managed Futures Style

It was a shock to many, when 4 of the 5 commissioners representing the SEC made an unprecedented decision to strip the multi-decade old ban on general solicitation by hedge funds. While we often tell anyone who will listen that managed futures are not hedge funds… in this case – the privately offered funds of managed futures programs are surely part of ”hedge fund advertising.” So what does this landmark ruling mean for the commodity pools/managed futures funds sort of caught in between securities and futures regulations?

2. “You Thought That was Bad? Look at These Monthly Losses

We noticed Meb Faber posted a blog visualizing the biggest monthly declines each asset class has had dating back to 1972, but it omits managed futures. We threw managed futures in the group to see how it stacks up.

3. “1st at Morningstar = 144th in the Real World

Back in July, 361 Capital’s Managed Futures mutual fund had been named the best performing fund over the past 12 months, according to Morningstar. But we can’t help but think this is a little like being the cleanest dirty shirt.  So how does their 8.12% return over those 12 months rank amongst the 784 programs in our database and against our recommended list. Hint, it isn’t  #1.

4. “3 Reasons XLE isn’t the Inflation Hedge you’re looking for

We’re not regular readers of the Seattle Times, but when a client saw managed futures mentioned in a recent Q&A in the investing section – they pointed us to the piece… The reader said they were considering investing in managed futures, but wanted the columnists’ advice first. The columnist responds by stating that managed accounts are only good for managers and not for anyone else, instead suggesting investing in the XLE energy based ETF. Let’s take a look at a side by side comparison to see which one is better, shall we?

5. “You Think Gold’s been doing Bad, Check out Gold Miners…

What’s the only thing worse than being long gold? Being long a gold mining company who has massive exposure to the plunging gold price, as well as some added extra exposure in terms of the company’s management, fixed costs, debt, and so on… Just look at the performance of these commodity producer/miner ETFs versus the commodity ETFs versus the actual commodity itself.

6. “The Field Guide to Surviving Volatility

Our friend Jeffrey Dow Jones (yes, that’s his real name) over at the Cognitive Concord Blog was out with the above titled post , and it couldn’t be more timely in our opinion.

7. The Death of Orange Juice? 30 Years after Trading Places…

It seem like just yesterday Eddie Murphy and Dan Aykroyd were in the old Comex pits making millions off of Frozen Orange Juice Concentrate. Now 30 years after Trading places, it looks like the hype surrounding Orange Juice is fading, with only 20,000 outstanding contracts.

8. “The picture from Space that shows why Commodities are non-correlated to the Stock Market:

How on earth does a weather picture of the Wyoming & South Dakota have anything to do with stocks not being correlated to commodities? Well, the storm ended up killing tens of thousands of cattle in South Dakota because they hadn’t grown their winter coats yet. That came out to be 15 to 20% of cattle in South Dakota. But how does this prove stocks are non correlated to the stock market?

9. “Devil of a Dilemma: Add the Carry Trade to Trend Following?

We not all that into “foreign exchange portfolio’s” seeing people get too carried away trying to get foreign exchange exposure without really understanding what that is or does. However, one of Eclipse’s paper does a sufficient job highlighting managed futures, and suggests combining FX Trend Following with FX Carry Trade looks better than by themselves. But it comes with the caveat of a higher correlation to the FX Carry Trade during crisis periods.

10. “Winton Capital – Shrinking Risk, Shrinking AUM

We’ve pointed out from time to time that when a CTA grows bigger, its monthly gains and losses often grow smaller. CTAs don’t really come any bigger than Winton, and they’ve definitely been a prime example of this trend. Well as it turns out, not everyone is excited about the lower volatility, lower risk/return version of the Winton they once knew.










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DISCLAIMER

Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.

The entries on this blog are intended to further subscribers understanding, education, and – at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex, and is not intended as investment advice, or an offer or solicitation for the purchase or sale of any financial instrument. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.

*The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship and self reporting biases, and instant history.

The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on Attain’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by Attain, and averaging of various indices designed to track said asset classes.

It should be noted that past market performance is not indicative of future market movement.No market data or other information is warranted by Attain Capital Management as to completeness or accuracy, express or implied, and is subject to change without notice.

Managed Futures Disclaimer:

Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.