May 11, 2011

Location Date: 
May 11, 2011

We are all excited about sharing our thoughts on markets and the alternative investment industry through frequent posts to this site.  And what an auspicious start we have today with Mr. Raj Rajaratnan's conviction for insider trading – the biggest case ever in the hedge fund industry.  Since Madoff made up his own trades, he could also be considered an inside trader but I digress.  I can guarantee you that all of the media attention will focus on Mr. Rajaratnam’s crime as opposed to all of the industry-related individuals at the companies involved – it takes two to tango but only one gets to cop a plea!  As pointed out in a Bloomberg report today, it is interesting that most of the over 40 other people charged in the investigation are “juniors” in companies with access to allegedly inside information.  How the government is ever going to police all of the “middlemen” is something to watch for over the next few years.

We hope our posts prove interactive, thought-provoking and entertaining.  Over the next while, we will refer along articles of interest and the themes associated with the macro environment in which investors and traders find themselves.  We will also keep you abreast of developments in the industry with our viewpoints added for colour. 

So here goes – our first post gives to a long-only manager – go figure.  But not just any long-only guy, but Jeremy Grantham.  If you have not followed his career or market calls, then it is never too late to start.  He admits he is not a market timer BUT his May letter attached is fabulous.  He states “...And whether it (the S&P500) will reach 1500 or not, the environment has simply become too risky to justify prudent investors hanging around, hoping to get lucky.  So now is not the time to float along with the Fed, but to fight it.” Enjoy!  And as always feedback is appreciated and welcome.

GMO May 2011 Letter

Jim McGovern