Wednesday, January 12, 2005

I'm Super, Thanks For Asking

We have been a tad mystified by these ominous adverts that have been appearing on TV, extolling the "future of investing". We had thought that the future of investing was to buy anything apart from the dollar, and overweight forestry* But we're a sucker for ludicrous promises made on TV, although we have never acted on them. If anything else, we'd have been making too much money for PO Box owners in Bridgeport Connecticut, but we digress. We're here to talk about Superfund.

"Guten tag, My name is Christian Baha. I am the founder of Superfund, a managed futures fund...I would love to tell you more about Superfund, but regulations prevent me from describing it on television."

Crikey, the ad is all tasteful and monochrome, but there's still an air of the JT Marlin about it. Although we must stress there is nothing unethical that we have found about their business whatsoever. Same apparently goes for Forbes, which expressed gentle scepticism about Mr. Baha's claims, but found nothing untoward. They also note that he bought a bit of airtime over a couple of weeks over the winter of 2003-04 on the cable news channels. The latest publicity effort seems a tad more serious. (On a side note, try and google his name, and much of what you'll get are endless pleas for ecumencial understanding.)

All we'll say is, the man is using algorithms to pick which futures contracts his hedge fund will pick to invest in. It sounds as if he's at the start of the hedge fund cycle - clever trading process exploits inefficiencies in the market. Makes handsome money for small group of investors. But can the managers maintain this performance if other traders get wise to the trading process, or if his computers start laying such gigantic bets that they start to interfere with the market's operations?

We have no idea, since by day we mostly write about debt, rather than hedge funds. A hedge fund on paper is an investment fund formed outside of government regulation to invest on behalf of rich and savvy investors. But it's also a way to pension off former traders at investment banks, allow to them to practice their lunacy away from a bank's own money. They also allow the traders to try out a handful of tricksy trades over a long period rather than come up with a bundle of them every few days.

But we're jealous, writing about this insanity rather than enriching ourselves through it. And we really do think that Austrians have among the silliest accents in all of Europe. But, when it comes down to it, the only pitch we've ever been convinced by on TV has been the Magic Bullet's, and even then we didn't buy it because the ad was too cheesy. We rate the ad an underperform.

*Just kidding, children, gringcorp is not a registered financial adviser, this post should not be construed as a offer to buy or sell any security, and should be used for informational purposes only. In fact, it should only be construed as a childish attempt to ridicule people with funny accents. So there.


Post a Comment

<< Home