"There are times when the burden of taking other people?s money forces you to be active when you don't really have conviction. It gives you a sense of pressure and expectation. When it's your own money you don't have to do anything."

- Tony James, President of Blackstone, commenting on Stanley Druckenmiller's decision to wind up his hedge fund. As reported in The Financial Times.

And here is a section leading up to some of Tim Price's preferred investments:

In an unnecessary but valiant attempt to placate our earlier anonymous hedge fund executive, here are our views. QE2 looks like a done deal across Western administrations, and we expect it to be comparably as futile as the Japanese found it to be. But it may well sow a sufficiently critical mass of inflationary and currency-destructive seeds to justify, ultimately, inflation protection. In the meantime, government bond markets will remain well bid since deflationary pressures trump any other. We prefer, however, to invest in true quality rather than perceived high quality, and are therefore focused on the most creditworthy sovereign borrowers in the world which happen also to provide excellent yields by comparison to the overcrowded conventional yields available in usual suspect markets like the US, the UK, Germany.. Investment vehicles such as the New Capital Wealthy Nations Bond Fund (investment grade sovereign debt, which yields c. 7%) and Stratton Street?s Renminbi Bond Fund (Asian investment grade sovereign debt with a structural exposure that is long Renminbi and short US Dollar; current yield c. 6%) strike us as significantly more attractive on a risk-adjusted basis than the conventionally "riskless" government markets of heavily indebted countries like the US and the UK. In equity terms we have favoured for some time the most defensive blue chips. In other respects we see little by way of compelling wealth insurance except for absolute return funds with a demonstrable track record of capital preservation and growth, and gold. Happily for us, we are not managing a global macro hedge fund: in those areas outside our zones of highest conviction, we will be doing precisely nothing.

David Fuller's view Tim Price's suggestions are a worthy complement to the high-yield candidates which Eoin and I have reviewed in recent weeks.

The New Capital Wealthy Nations Bond Fund, registered in Ireland is certainly my preference among these two, mainly because the charges are much lower. The Stratton Street fund, which is not in the Library, has hedge fund style charges, including a 20% performance fee. We always suggest that potential investors also conduct their own due diligence. (See also email on bond fund's in Eoin's section below.)


My personal portfolio: S&P hedge short stopped out - Before going on holiday last week I placed a slightly in-the-money stop to protect my latest S&P 500 Index hedge short. This was triggered at 1095 for the September contract on 17th August against my short sale at 1100.13 on 11th August. These prices include all spread-bet dealing costs.

The choppy, rangy conditions in most OECD country stock market indices continue but most now show short-term oversold conditions.