Category Archives: Finance

George Soros on Financial Markets

In this valuable video, George Soros shares his lifetime learnings on Financial Markets. Some of the key messages are:
1. In business cycles, Earnings (EPS) rise will lead Valuation(P/E) rise, and Earnings (EPS) fall will lead Valuation(P/E) fall because investors tend to extrapolate the present into the future.
2. Whatever is known to the majority, can not create profits (competitive advantage).
3. Markets discount all the known things. The profits are in the unknown (events of the future), which are not yet discounted by the market.

George Soros on Financial Markets – Q&A

While this video is 5 years old, the content is still very relevant, and some of the implications and projections by George Soros have actually come true in last 5 years. The key point to note is that George Soros does not accept/agree with the Efficient Market Theory. While we can’t predict the future, it is possible to create scenarios and test them against the events as they unfold.

Open Society Foundations chairman and founder George Soros shares his latest thinking on economics and politics in a five-part lecture series recorded at Central European University, October 26-30, 2009. The lectures are the culmination of a lifetime of practical and philosophical reflection. Continue reading

Stay away from Alibaba – Mark Mobius

This video covers the concerns that Mark Mobius has about the Alibaba shareholding structure, i.e, dual shareholding with promoters having significant control and little recourse for minority shareholders. Its not considered proper in the USA and NYSE should not have accepted such a listing. But commercial considerations have dictated the current situation.

Dr. Mark Mobius, Executive Chairman, Templeton Emerging Markets Group. He earned Bachelors and Masters degrees from Boston University, and Ph.D. in economics and political science from the Massachusetts Institute of Technology (MIT).

VIX Products in High Demand by Investors

Volatility arbitrage though not new, has taken on a new dimension, as several new hedge funds have begun to deploy strategies involving VIX futures and options. We’ve seen the VIX universe continue to expand in surprising ways. For instance, a major investment group that principally trades energy and interest rate products, recently became a Trading Privileged Holder, or TPH at CFE. Other new users include European investors trading VIX products against fee stocks, a measure of volatility of the Euro Stocks 50. And banks in Brazil, now actively using VIX products for macro hedging. We also see increasing numbers of customers that sell implied volatility short, which has been an active topic in many trading forums. Its important to note we are still in the early stages of developing previously-identified customer segments globally, such as hedge funds, CTAs, proprietary trading firms and institutional investors. Many customers in these categories are early adopters meaning there is considerable room to further expand every category of VIX user. Quite simply, we believe investors of every type can potentially benefit from the added dimension of pure volatility provided by VIX futures and options, and that education is the key to unlocking that potential. – Ed Tilly CEO, CBOE (Q1’2014 Earnings Call, source: www.SeekingAlpha.com)