06/01/2004
With Vladimir Putin safely ensconced in the presidential suite for another four years and the price of oil moving steadily higher, what are the prospects for my investments in Russia?
Many fixed income hedge funds rely on highly leveraged carry trades, which exploit the steepness of the yield curve. If the Federal Reserve raises short-term rates later this year, these funds could lose a great deal of money. What is my exposure?
Leveraged financiers are discriminating more among the private equity houses. Since many suffered losses in the downturn of 2000 to 2003, banks are less eager to provide credit to all comers. Are my private equity firms of sufficient stature that they will be able to source the debt they need? How should I evaluate the private equity firms that come to pitch for my capital?
If I believe that long-term interest rates are set to rise later this year, should I unwind my laddered bond portfolio strategy, or can it continue to perform in a rising-rate environment?
Skyrocketing oil and gas prices are taking their toll on chemical companies like DuPont. Should I reevaluate my investment in this sector?
Japan’s fitful recovery seems to be gaining momentum, as banks’ nonperforming loan levels stabilize and the equity market inches higher. With the government seeking to keep the yen depressed, is it time for me to invest in Japanese assets?
U.K. mining giant Anglo American
said its 2003 earnings fell by $578 million due to unhedged adverse currency
movements. Meanwhile, Scottish Power, another U.K. firm, said it made $728
million by hedging its currency exposures wisely last year. How can I determine
if the companies in which I invest adhere to state-of-the-art risk management
techniques that will help them avoid losses?
Hungary, Poland and the Czech
Republic—the three largest countries to join the E.U. last month—have seen their
stock markets roar higher by 44 percent to 70 percent over the past year,
compared with a 23 percent rise across greater Europe. How can I tap this
investment opportunity? Is the rally over?
Half of the countries in the
eurozone will fail to meet the membership criteria this year. The E.U.’s
Stability and Growth Pact requires eurozone members to keep their borrowing at
or below 3 percent of gross domestic product. France and Germany have failed to
do so already, severely undermining the currency’s credibility, but Brussels
Eurocrats now expect four other states to breach that cap this year. What effect
will this have on the currency? Should I adjust my investment strategy toward
Europe?
Institutional corporate governance activists like CalPERS and
Institutional Shareholder Services are voting against corporate board titans
like Warren Buffett and Sandy Weill whom, they say, have allowed auditors to
take on non-audit work like consulting. Should this be a consideration in my own
investments?