Everest Financial to Wind Up Business

Following a strategic review, Everest Financial Group is to wind up the business, return capital to shareholders and transfer the funds under management to other firms. I have units in the EAIT and EDIF funds and am a shareholder in Everest Financial. This once seemed to be a successful business but the GFC hit it hard. Particularly damaging were the actions of activist hedge funds that resulted in reducing funds under management to far too small a scale for the company to go on. The book value of the shares exceeds the market value so hopefully we'll get something decent back and hopefully a decent manager will take over EAIT and EDIF.

"Dow Jones" Replaces "Tremont"

CREDIT SUISSE AND DOW JONES INDEXES JOIN FORCES ON HEDGE FUND INDEXES

Former Credit Suisse/Tremont Hedge Fund Indexes To Be Rebranded Dow Jones Credit Suisse Hedge Fund Indexes

New York (June 22, 2010) – Credit Suisse, one of the world's leading financial services providers, and Dow Jones Indexes, a leading global index provider, today signed an agreement which covers the calculation, licensing, branding and marketing of the hedge fund indexes formerly known as the Credit Suisse/Tremont Hedge Fund Indexes. Under this agreement, the indexes will be branded Dow Jones Credit Suisse Hedge Fund Indexes, and Dow Jones Indexes will calculate, distribute and market the indexes, while Credit Suisse affiliates will continue to manage the financial products linked to them. Credit Suisse and Dow Jones Indexes intend to keep the methodologies and rules for each of the existing indexes consistent with past practices.

Got Schengen Visa

Snork Maiden got her Schengen visa which allows travel to most European Union countries apart from Britain:



I thought that it was strange that we had to get it from the Norwegian embassy because Norway isn't part of the European Union. But it turns out that Norway is part of Schengen though it isn't part of the European Union. Switzerland is too. At least we got the visa for free due to Snork Maiden being married to a citizen of the European Union, me (I'm also an Australian citizen). She is a citizen of PR China and it will be about another two years till she'll be an Australian citizen and then travel arrangements will be a lot easier.

A PF Blog with a Difference

This guy lives in a van while doing a masters degree at Duke University. I read an article by him before but just discovered he now has a blog. He seems to annoy a lot of people.

Savings Impact of Trip & Laptop

We spent a lot last month in particular on flight tickets to Europe and a new laptop computer. At least half of those expenditures are business expenditures much of which will be refunded at some point. Anyway, they still had an impact on savings:



The blue line tracks savings in non-retirement accounts minus the effect of investment returns. You can see that last month's spending did have a noticeable impact, but it is much less than the savings we accumulated in the last year. Retirement savings continue to accumulate in the meantime (the pink line). To get total retirement wealth add the pink and green lines. To get non-retirement wealth add the blue and brown lines. All four together are equal to net worth. I find this breakdown to be very useful.

Moominvalley Report May 2010

This month's numbers are pretty terrible, especially in US Dollars:



But, as you can see once you take out the exchange rate losses of $36k they aren't quite so bad. In currency neutral terms we lost 6.98% and in Australian Dollar terms 6.09% in terms of investment returns, whereas investment losses in USD terms amounted to 15.10%. However, the MSCI World Index lost "only" 9.48%.

Expenditure totaled a very high $10k due to the new laptop and the trip to Europe. Other events include the transfer of $A1,000 to superannuation I did this month.

Net worth fell by $US71k to $US377k (or by "just" $A33k to $A448k). The allocation to Australian large cap stocks fell by 0.6% of assets despite my switching money back into the Colonial First State Geared Share Fund. But the allocation to bonds also fell by 1.13% of assets a a result of the switch. Allocation to foreign stocks and hedge funds rose.

Another Leg of Our Trip Organized

Just booked a couple more steps in our crazy trip. We will fly from Copenhagen via Billund in Jutland - the Danish Peninsula - to Paris. I'd never heard of the airline or Billund which is just a village. But turns, out it is the headquarters of Lego and the location of the original Legoland themepark. This flight had the best combination of cost and timing. Also I booked somewhere to stay in Paris, which you can see above. E62 per night. Apparently, Jean-Paul Sartre and Simone de Beauvoir lived there for a while in the 1930s and 1940s.


There are still some steps to complete the planning for this epic voyage to six countries :) Snork Maiden hasn't been to any of these countries before.

Hedge Fund Index Performance May 2010

Credit Suisse/Tremont have published preliminary results for hedge fund performance in May:



The index lost 2.73% which is very similar to the HFRX result. All strategies lost except for short bias. Surprisingly though, managed futures lost 4.42% and equity market neutral lost 3.87% whereas HFRX found that systematic diversified and equity market neutral gained in May. HFRI also have
a "flash update":



They show slightly lower overall losses. Like HFRX they show gains for equity market neutral but small losses for systematic diversified and quantitative directional.

Dell vs. Mac

Enough Wealth suggested on my last post that really I could have gotten a Dell laptop and saved money over buying a Mac. So, at least part of my Mac purchase was discretionary. Well, I would have had to buy all new Windows versions of my software including a stats package that costs about USD700 so that would wipe out any gains and after 20 years of using Macs I'm not planning on switching. But anyway, I thought I could check out what a comparable Dell would cost for the purposes of this post.

This seems to be the closest model I could find:



It has the same CPU, screen width, and RAM though a slightly larger hard drive (500GB vs. 320GB). Price is $1,150 vs. $2,199 for the Mac. Actually, you can get the larger drive on the Mac for $2,339. So the Dell is $1,189 cheaper.

Are these models really comparable? Which would you get?

Shuffling Money Around

Recently we booked a trip to Europe. The tickets came in at $A5,900. And we're not yet done with trip costs. On the other hand, the people I am going to work for in Sweden are going to pay about $A2,500 of that, but probably not till October. Also I bought a new laptop for $A2,199. I'll gradually get some of that back over time through depreciation deductions on my tax but only 15-30% over 3 years.

Both of these were initially paid for with a credit card. But we will have the credit card bill paid off by the end of this month. I immediately paid off $A2,000 of the credit card bill with cash we had in a cash management account at Adelaide Bank. My pay went into when I worked for the Uni here and all Australian dividends etc. which are not reinvested are paid into. OCP.AX will be paying $A1,200 of a capital return into this account in two days time, which will help pay this back. My rationale is that I want to have an immediate Australian credit line available for emergencies. The card limit is $A10,000. Now we have close to $A4,000 available.

Next move is to set up to borrow $A4,000 on my Australian margin loan for a couple of weeks time just before the credit card is due. With that and the cash in the Adelaide account we can pay off the credit card. We had about $A32k of borrowing power, so I feel safe using an eighth of that. Over time it will eventually be paid back. The interest rate is lower than that on the credit card so that makes sense.

I'm still waiting to be paid for the two consulting jobs I did recently. The money should be paid in US Dollars for those.

Daily HFRX Performance for May 2010

The Daily HFRX hedge fund indices show an overall loss of 2.64% for May. In comparison to the MSCI World Index's loss of 9.48% that's not too bad. All styles lost money with the exception of equity market neutral that gained 2.08% and systematic diversified which gained 1.03%. With reference to the latter, I know that Man-AHL lost only 0.1% for the month.

Moominmama Portfolio May 2010

This was a tough month in the markets. Stocks, and especially European stocks, and non-US currencies were hard hit. Alternative investments just fell less than other investments. The MSCI World Index fell 9.48%. Given the portfolio's estimated beta of 0.47 performance this month was not good in comparison to the index either.

New Laptop

Yesterday, I bought a new MacBook Pro. The old one was less than three years old but it was again malfunctioning, has an almost useless battery, and cracks in the metal on both sides of the screen. Just a new battery costs more than $A200 and I decided not to put any more money into it. The new computer cost $A2,199 which is less than the $US2,159 that the last one cost in 2007. Both are the base model 15" model. This one has a 5 core chip instead of a 2 core chip, 4GB of RAM instead of 2GB, and a 320GB hard-drive instead of a 160GB one. The clock-speed is 2.4GHz vs. 2GHz. It's interesting that for a long time computers competed on faster and faster clockspeeds but in the last 3 years there have not been very large gains at all on this dimension. I'll be deducting the remaining value of my old computer from my taxes and a big chunk of this one. If I'm in the 30% marginal tax bracket that reduces the cost by a nice amount.

Also yesterday we visited the Norwegian embassy to deal with Snork Maiden's visa for Europe. Even though Norway is not in the European Union they deal with European visas for people visiting Scandinavia here. They are really unclear about the rules applying to people who are spouses of European citizens. Maybe we don't need to pay for the visa. According to the French government she wouldn't need a visa at all. I'm also working on organizing our accommodation in Sweden. Finding something there at a decent price that meets our requirements for the duration of our stay seems pretty challenging.