Here is a Globe & Mail article that is too good to pass by.
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"Krishnamurthy Narayanan, and he goes by Nandu – showed up in town this week and was bullish.
“'I think we're ending the financial crisis now,' he said. 'There will be countries, like the U.S., that will go into recession. But this need not be a global recession. And there are some encouraging signs on that front.'
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"Lately, that has worked out rather well. His CI Global Opportunities Fund has returned 57 per cent in the past year, 19 per cent (compounded) over the past five. Nice numbers, but once you've made your money calling the credit crisis and short selling Washington Mutual, what do you do then?
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"'I like the whole Canadian market. I don't particularly dig the banks because I just don't know what's in there [on the balance sheet]. But I'd say virtually everything else is fine.'”
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"You buy uranium stocks: 'Ridiculously cheap.' Gold miners: 'Ridiculously cheap.' Pipelines, too: 'How bad a business is that? It's a fantastic business. You're just shipping gas. Why are people selling those?' Energy: 'Unless there's an absolute collapse in oil demand, you really can't see oil plunge all that much [more].'"
Here is a profile of Mr. Narayanan from the Globe Investor site:
Nandu Narayanan
Trident Investment Management, LLCStart Date: January, 2005
Fund Return: 29.24%
Nandu Narayanan, founder and Chief Investment Officer of Trident Investment Management, LLC, has 12 years of investment industry experience. Prior to founding Trident, he worked as an independent consultant on emerging markets to Credit Suisse Asset Management, as well as managing CI’s Asian and emerging markets funds. He also worked as Chief Equity and Emerging Market Strategist at hedge fund manager Caxton Corporation, and as an investment analyst at Tiger Management, another hedge fund firm. He holds a Ph.D. in finance and international economics and a master’s degree in management, both from the Massachusetts Institute of Technology, as well as a bachelor’s degree with a double major in economics and computer science from Yale University (summa cum laude).
Also manages: CI Global Managers Corporate Class, CI Trident Global Opportunities
For more information about Mr. Narayanan, visit this site: Morningstar.ca. An excerpt from the Morningstar article follows:
"Identifying himself neither as a bear nor a bull, but as an opportunist, Narayanan has long believed that credit markets were ripe for a fall, and hence offered lots of opportunities. But he was also prepared to take some small losses, positioning the funds to take advantage of the turmoil that eventually occurred last summer.
"'Our thinking is that credit markets are in serious trouble,' Narayanan says. 'The commercial paper market is locked up. We're in the third inning of what could be a very long baseball game.'"
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NANDU NARAYANAN,
CI TRIDENT
YTD return: 40.4%
1 year: 37.1%
Three year: 14.3%
Anticipating the popping of the credit bubble in the United States helped the $62-million CI Trident Global Opportunities Fund to generate a 12.5 per cent positive return for August, according to a company spokesman (CI noted the fund is not valued daily.)
How did CI Trident do it? By shorting selected areas of the credit markets, said portfolio manager Nandu Narayanan, chief investment officer of the subadviser, Trident Investment Management LLC in New York.
"First, we were short asset backed commercial paper and subprime loans," he said. "Those shorts produced positive impacts on our net asset value. Second, we were short on credit default swaps [debt insurance that loses value when there are defaults]. Third, we shorted U.S. mortgage insurers such as Radian Group Inc. and MGIC Investment Corp., whose stocks collapsed in the month. Over all, our bets that companies holding debt would see their shares fall generated about 65 per cent of our return in August. Year to date, these strategies have produced a 30-per-cent gain."
Mr. Narayanan is still holding his shorts, he said. He sees two crises ahead. The first is a continuation of the housing disaster that developed from speculative house flippers who did not even have money for down payments. The second is an unwinding of complex credit derivatives built on other derivatives.
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Holy crap 57%!!!!
ReplyDeleteNice to hear about someone who puts their money where their mouth is. So many yahoos spout off their predictions leaving chaos in their wake for no good reason.
I noticed Ken's post on Research in Motion (RIM) recently. Their problem is not based on current earnings, but on their precarious market position. RIM has an expensive product that dominates the market because it is good. But growth in this field is slowing drastically, and there are no barriers to entry. RIM will be besieged by low-cost competitors. Obviously I know nothing, because Yamana Gold (one of my largest holdings) is performing as poorly as RIM. However, I'd sleep at night holding Yamana for ten more years. RIM makes me nervous!
ReplyDeletelol , arnold is not in the best shape of his life :)
ReplyDeleteI expect he'll do better, now that he's retired from possibly the worst job in the USA!
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