How has the recession affected you?

[samb]

@pak-one

You have had some strong positions. Are you a day trader or run an investment house?

I am a fundamentals guy. I usually rely on the valuations, technicals less so on the short term momentum. I can’t be as active as you were, because my day job is in I-Banking which means lots of hours at the office and bonus payouts in Dec. Also I am not permitted to comment on rivals (Citi) or the energy sector.

Having said that, I was fairly leveraged in industrials as late as '07 Q4. I had a good mix of ADM, Cat. Etc based on P/E ratios, bankruptacy values (FF and E, cash on hand) and relative market share and it’s medium term trends. I started the selloff in '08 Q1 to shift about 25 percent of the capital towards a closed REIT run by my uncle. The REIT invested in hotels in W. Europe and resorts in emerging markets.It’s averaging a 17 percent return and has used the cash on hand to increase the equity stakes in some of the investments. I held on to the rest of the cash until later in the year when I went into the tanking property markets: I brought a condo in Cannes, 2 commerical units in Zurich, a few small (2-4 units) mixed use buildings in the US, also fully paid off my current residence.

I remember Oct 10 very well because I went into to grab Goldman and also picked up Walmart, Wells Fargo. For once I was highly liquid at the right time.

My bonus numbers were rather strong last year, so I am still banking some cash. I would love to get into ETFs and possibly commodities but it’s pretty diificult to do it when you barely have enough time to sleep.

My personal, inflation adjusted IRR is 15.3 percent. Not spectacular but I’m quite satisfied due to the minimal time investment.

wow… good stuff man… what was your reasoning for moving to cash in Q1 2008? regardless good call.. especially the Wells Fargo. Buffett is still apparently buying it…

through the last half of 08 and throughout 09, I just played in small illiquid arb type stuff… and found some names that I could arb over and over again. then the market melted down and the bids disappeared on those names. I remember there was a retractable preferred share where you could get 25 bucks by putting it back to the issuer. and around October, etc it was trading at less than 24 bucks. you could make an easy 4% every month just by buying that thing and putting it back to the issuer. there was some other interesting little things going on just like that.

2009 was a good year but I’m sad that those opportunities look like they’re all gone now or the spreads are much tighter. and because I was doing this stuff, I didn’t have any money to invest long-term in the market and missed the entire run up. and now, I’m hesitant to put anything in. guess I’m pretty doubtful of this magical recovery. as far as I can see people are still piling on debt like there’s no tomorrow which is what got us into trouble in the first place.