1. jack c said...

If you visit the Eclectica website you can download the fund manager commentary (Hugh Hendry) on The Eclectica Fund which contains a very frank insight into what is really going on in the world of econonmics/finance/fund management etc... a very worthwhile read (IMO)

You will need to register @ www.eclectica-am.com/fundlist.aspx?target=fundlist

3. hpwatcher said...

I watched this. Every time I see Hendry on TV I am struck by his arrogance and complete lack of circumspection. I'd much rather go by the cool counsel of Gillian Tett.

The only difference between them - Tett and Hendry - is one of style. They are more or less saying the same thing, but I prefer the direct style of Hendry.

ReCAPTCHA: lichens the

5. alan said...

Thanks for the post MG,

"Restructure Greek debt. Bite the bullet now. Don't award folly"

"purge the system of rottenness", "you make a mistake - you pay for it". "Greece won't pay its debts in 3 years time".

"why do banks pay dividends before they are secure?"

"A banking crisis is now a sovereign debt crisis". "time to get Greek, US, UK debts under control".

My favourite "when a government does a sticking plaster solution, it doesn't really work" - Gillian Tett wins a cigar!

7. jack c said...

hpwatcher said...The only difference between them - Tett and Hendry - is one of style

bit more to it than that (IMO) Gillian is author and award winning journalist (talks the game) whilst Hugh set up a company with his former Odey asset mgmt partners in 2005 that now has funds under management of approx US$ 450m (plays the game)

9. str 2007 said...

fancypants

Well lets hope the short term electoral interest pay out now and they get on with the correction so in 3-4 years time we can see ourselves in a much better position.

There's an awful lot of people in their 20's, 30' and 40's that will benefit greatly from a house price correction.

There's also an awful lot of people in a house they're not planning on moving from who couldn't care less either.

I genuinely think the one's who don't want a correction are very much in the minority.

Lets hope they can get them down and keep them down. (Like Germany has managed to do).

11. luckyjim said...

Ok, so I guess you'll all be investing in Hugh Hendry's fund. No ? Lets face it, he's on TV because he's a bit eccentric and always likely to say something outrageous. A bit like John McCarrock who, by the way, is a lousy tipster.
The 'let's just get Greece to default rather than repay their debts because it will be quicker' argument is nonsense. Yes, they may end up defaulting anyway but I would guess Hendry has a vested interest in the Euro collapsing and is benefiting from talking up the crisis.

13. sureseam said...

There are too many economists, politicians and others pretending that it (sovereign debt) is going to be okay in the end. The recent election being a case in point writ large. Hugh Hendry doesn't pretend about it and rather than mumbling in muted terms; he cuts the crap.

Are we seriously going to reach civil insurrection before anyone in the public eye starts plain speaking? A number of countries (Greece foremost and others close behind) are beyond the point of no return. Oh sure - if you assume perpetual low interest rates and high growth rate - we can all pretend otherwise.

Attempting to keep Greece going without default means a growing chunk of their GDP get tied up in interest payments until even the ECB and the IMF recognise it is unsustainable. Massive cuts in public spending and major tax rises will enrage society and there will be no end in sight to it. Alternatively a default would be unpleasant but, as mentioned would pass.

To accuse HH of trying to manipulate things, you have to accord him with massive influence that not even he imagines he has. He is merely pointing out that the emperor has no clothes.

Having looked at investing via Eclectica; I couldn't understand his approach, albeit articulate and sophisticated. Although better some years are better than others, he generally does well. The maxim about understanding your risks meant I stood back.

15. sneaker said...

@12

Bankers alas did not live by their wits - they were incentivised to take insane risks, gambling they would be bailed out. Senior management has mostly survived at many banks, but droves of mid- and low-level executives were culled and still can't find jobs because their skills are often useless in the real world. Very few bankers make it into the hedge fund world because they have delusions of grandeur about both their abilities and their place in the world. Hedge fund managers are mostly quite balanced, thoughtful individuals who know that nobody will save them it they get it wrong. This is, incidentally, not a defence of hedge fund managers but a correction to your argument.

Meanwhile, as for your assertion that investing with Mr Hendry would be a loser, take a moment to review his track record. The guy wouldn't be in business if he was a loser.

Happy to hear your response...

reCaptcha: mendoza brokerage

(is someone planting these or what??)

17. sneaker said...

@16

did you know that hedge fund investors will generally only invest in a fund where the manager has himself already invested?

so if the fund loses, the manager loses.

also, there is a high water-mark rule: if the fund goes through a losing period, the manager only gets paid if the "high water-mark" is exceeded.

this is a requirement that no investment banker operates under. they get paid on the rebound, regardless of the losses in a blow-up.

reCaptch: wormy thorities
(no, I'm not making this up!!!)

19. sneaker said...

@18

yes, they win by succeeding. most people who try to trade actively end up losing, so it is a very rare thing to make money. that's what the performance charge acknowledges. i don't see why that's a bad thing - it's a profit, for a service rendered, based on a skill. i'd rather managers fund themselves through lean periods from prior profits than get a gov't bailout - like a bank, or a car manufacturer. and nobody is obliged to invest in a hedge fund - they are generally a "plaything of the rich". so if a fund blows up, it generally doesn't hurt the little guy. protecting the little guy is what i'm all about.

the hedge funds that made money by buying credit derivatives such as cdo's mistook the good times for their own genius - and many of those managers are now bankrupt - and unemployable. that seems fair to me.

as it is, the mark-up on a pair of jeans in the high street can be as much as 10x - meaning, the shop is pocketing 90% of the ticket price. people *are* obliged to buy clothes. they are *not* obliged to invest in hedge funds. so let's think about what's a fair margin for a moment.

21. Sneaker said...

@20

"performance has little to do with managers' decisions"
this is more to do with mutual funds and investment trusts - not actively-managed discretionary funds.
the correlation of such hedge funds with general market indices is much lower. many funds (e.g. hendry himself!) do best in market crashes.

"when the bets go wrong it doesn't matter"
i disagree strongly - when bankers bets go wrong, they get bailed out. when hedge funds (except LTCM, of course, but that was 1998) go wrong their fund closes, they lose their own money and usually cannot ever get another job running a fund.

23. letthemfall said...

We'll have to disagree then. But the kind of discretionary fund open to all, the absolute returns, show a rather indifferent performance, and long term there are apparently few hedge funds that do better. There have been numerous articles pointing this out. Unless one is pretty expert oneself, I wouldn't pay the kind of money they ask for their expertise. The world is full of experts, and I've known quite a few myself - all very expert, until they aren't.

25. Beecee said...

I watched this 'discussion' and found a fellow traveller. I've read Gillian’s book but had never heard Hugh before, mea culpa and what sense he spoke! I then started to read up and seems that he went into gold the year before me (2003). All I will add that I wish I'd had the bottle to take those positions. I see considerable rise in Gold trading coming so that my focus. Maybe he's eccentric, if he delivers what the hell does it matter.

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