- Advertisement -
- Advertisement -

SEB Asset Selection lost 4.9 pct in October 2011

- Advertisement -

Copenhagen (HedgeNordic.com) October 2011 showed sharp reversals in all asset classes as investors switched from “Risk-Off” to “Risk-On”. Our fund posted losses in all asset classes and a loss of 4.9% in total, writes SEB Asset Selection.

– A parallel can be drawn to April 2008, when our fund lost 4.3pct. At that time, the equity market got very excited when Bear Stearns was rescued (JP Morgan Chase paid USD 1.1bn to acquire Bear Stearns). This time around, the equity market became excited about the massive political support to save Greece from bankruptcy.In 2008, the S&P 500 Index soared by 11.5 pct between the first positive news about Bear Stearns and the subsequent peak in the US stock market index. Until that point, the YTD performance 2008 was basically flat. The bull rally this time around was even more remarkable. From 3 Oct to 27 Oct 2011, the S&P 500 index posted a 16.8 pct recovery and the 2011 YTD performance is, in a very similar way, basically flat, writes SEB Asset Selection.

– Unfortunately, the period of optimism following the Bear Stearns rescue in 2008 did not last too long. After that, the US stock market experienced a 50 pct decline over the following 10 months. As has happened so many times before, politicians have either been unable or unwilling (rightly so) to stop a house of cards from collapsing. Back then, it was sub-prime debt in the US. This time, it is government debt in southern Europe. In both cases, groups of people have been willing to borrow unreasonable amounts of money to satisfy their short term consumption addictions. In both cases, they have put their long term financial stability at stake and ended up in a big financial mess. In both cases, a lot of pain has been and will be the end result, writes SEB Asset Selection in their October report.

 

Picture: (c) shutterstock—Keepsmiling4u

close

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

HedgeNordic Editorial Team
HedgeNordic Editorial Team
This article was written, or published, by a member of the HedgeNordic editorial team.

Latest

Most Popular This Week

Request for Proposal

- Advertisement -

Latest Articles

Month in Review – November 2022

Stockholm (HedgeNordic) – After a difficult end to the third quarter, Nordic hedge funds are enjoying a strong fourth quarter. The Nordic hedge fund...

A COO for Protean’s Growth Journey

Stockholm (HedgeNordic) – The founding duo of the newly-launched Swedish hedge fund Protean Select has appointed Daniel Mackey as the Chief Operating Officer of...

Tor Svelland’s Fund Tops the Ranking

Stockholm (HedgeNordic) – One month to the end of the year, Svelland Global Trading Fund of Norwegian Tor A. Svelland takes the top spot...

Will Equities Bottom Out Like in 1974?

Stockholm (HedgeNordic) – Growing signs that price pressures are easing suggest inflation may have peaked, which has some market participants wondering whether equity markets...

Rising Mortgage Rates and Falling Stock Prices

Copenhagen – (Jesper Rangvid): During 2022, mortgage rates have risen and stock prices have fallen, both negatively influencing households’ consumption possibilities. But how much...

The Spectacular Unspectacular 20th Anniversary

Stockholm (HedgeNordic) – Reaching the 20th anniversary in the often short-lived and fast-paced hedge fund world is quite an achievement. In fact, some activity...