Dear rss free blog,
“Do
you seriously want to be rich?” was what Bernie Cornfeld used to
ask potential investors in his Swiss-based IOS, operator of
funds of funds and generator of huge commissions for Bernie and and
his salesmen who signed up US servicemen in Europe. It was a con.
Bernie went to jail.
Now
after a hiatus based on the Bernie episode, you can again buy a fund
of funds in the U.S. Today Advisor Shares Dent Tactical, an
exchange-traded fund was launched by Dent, under the ticker symbol
DENT, on the NYSE ARCA. It will invest in whatever ETFs,
excahnge-traded notes, exchange-traded currency trusts, or exchange
traded commodity pools its managers think will pay off. It tracks no
index and follows no allocation rules.
(When
I reported from Paris for the London Sunday Times in the 1970s
I contributed notes for a book the paper produced about l’Affaire
Cornfeld entitled Do You Seriously Want To Be Rich?)
I
lunched yesterday at the Harvard Club with Marc Chandler, who is both
a professor of political economy at NYU and head of global currency
strategy at Brown Brothers Harriman. BBH,
which manages the money of a college friend financing her artistic
career, is the surviving investment bank linked to a NY governor
(Averill Harriman), given the demise of the one linked to Herbert
Lehman.
(More
about NY politics below.)
Chandler
has just published an excellent book called Making Sense of
the Dollar: Exposing Dangerous Myths about Trade and Foreign
Exchange. It reads better than
its long title. Commenting on the 10th
anniversary of the euro, the purpose of the lunch sponsored by Dow
Jones Indexes, he called the common currency “an economic solution
to a political problem”.
Over
claims that the euro is some sort of rival to the greenback, he was
scathing: “each decade for the past three decades ahs seen slower
productivity growth than the one before” in Europe. “By contrast,
U.S. Productivity has generally been strong, even in this difficult
economic period.”
In
terms of global reserves, the Euro’s share is actually shrinking,
Chandler remarked. At the end of Q2 08 “the euro accounted for
26.8% of the world’s reserves” while at the end of Q1 09 “the
euro’s shares stood at 25.9%.” “Contrary to conventional wisdom,
there is no evidence that the dollar’s role in the world economy has
diminished either since the advent of the euro or due to the current
crisis.”
The
dollar remains “a reserve currency, invoicing currency, and the
benchmark currency for commodities.”
For
stock investors, Chandler examined the correlation of the DJ Euro 600
and the currency. Over 10 years the correlation was 26% and in some
periods was actually inverse (meaning one went up when the other went
down.) Today, however, the stock index and the currency are
correlated at a record 54%.
Should
we be selling euros or European stocks on the assumption that the
link would revert to the mean? Chandler warned against this. He
expects at least a double top in the euro against the dollar before
there will be a reversal, based on historic examples. And if we dump
the currency too soon, we will lose gains we should be getting, he
said.
He
thinks the export-machine countries, notably Germany, whose impact
helps explain the link between the euro and European stock market
performance, will eventually move toward manufacturing closer to
their customers, like US multinationals, and those from Finland
(Nokia) or even India
(Infosys).
Note
that Brown Brothers Harriman does not analyze or recommend European
stocks, only American ones. So my friend Sandys, despite being the
widow of a Frenchman, is wholly invested in US shares by the bank.
Now
about Leslie Crocker Snyder, defeated in her run for DA of Manhattan
yesterday despite my efforts. I’ve known Leslie for nearly 50 years
and she is a dedicated public servant who wanted to do something
useful now that she has retired from the bench. Four years ago, she
ran against the current DA, Henry Morgenthau jr, now 90. Her act of
lèse majesté
infuriated the venerable Morgenthau and his staff. So to stop Lesley
Morgenthau, they parachuted in Cyrus Vance jr, a lawyer from Seattle.
Vance
won. Many gossips argue that the failure of the New York
Times to support local candidate
Leslie caused her defeat. It is alleged that Morgenthau used his “Our
Crowd” Temple Emanu-El connections to get the newspaper
endorsement. No. The Sulzberger clan are now Episcopalians. Vance jr.
got Times support
because his father, former Secretary of State Cyrus Vance sr., had
been a member of the Times board of directors.
My
Radcliffe class produced a Senator (Liz Holtzman) and a Manhattan
Borough President (Ruth Wyler Messinger). No DA. And one global stock
guru (gurette?), me, to help you internationalize your Brown Brothers
Harriman portfolio, if you are lucky enough to have one.
News
about our recommended companies follows, mainly, again, about drug
companies (at the end after short items).
*To all Global-Investing.com members from Roger the Webmaster:
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-Roger
