I see what you are saying about hedge funds, but November 15th was the last redemption day on most funds, since then we have seen a lot of deleveraging. But as many funds may disappear, many will be formed. Basically if you formed a fund now and could borrow money to leverage at anywhere near the low interest rates in the market (the UK will probably go to 0%) and invested all of it in corporate bonds and dividend yeilding stocks you would make a fortune.
You have to admit, it would be a compelling story to tell to potential investors.
Three month money is majorly cheap now, and with all the cashing out of funds over the last year there is a massive amount of money on the sidelines. Treasuries in the US were auctioned off at 0% and in some cases lower, this means that you would be paying money to the US government to borrow your money!!! That is unsustainable.
I think that a strategy of buying now for the long term is a no brainer. Investors were investing when dividends were nothing to write home about, now you can by stocks with didvidend yields of 10%+.
Basically you are getting paid to wait for the bull run, which inevitable will come. This is why I believe there is a firm base in the market. I am not saying it couldn't go lower, economic data is aweful, but we will not get another oportunity like this in our lifetimes, that is for sure. Take the Dow for example. if I fully invested now and armegeddon struck, deflation etc and the market fell another 50%, we would be at PE ratios across the board at about 3 or 4 times earnings, how long can that last?
I am more of a trader, but have moved my SIP into the markets fully now, and have liquidated as much as I can to average my investments across the markets, I am not fully invested with that yet, as I am waiting for another downleg, but I am about 60% in now. This is just money that I am leaving for years.
Even from a trading perspective, I have put in some positions that I am keeping on and leaving.. even with the cost of financing these positions (in index CFD's mainly) I believe that there will be huge profits avialable. I have several positions that I have left at lower levels on the Dow, they are on until the market hits 10,000.
Picking the next bubble is an interesting topic, green is good, but will they get the financing at the current oil prices?
I still believe that the web will throw up some good opportunities. Alternative payment methods is one area I am looking at. An example is
Check out with Cash it is not listed and is a start up but having an easy system that allows purchases on the web through a 'virtual' debit card for those that can't get one, or don't want to use their usual card on the web, is an example of how the web community adapts to market conditions quickly so this is a sector that interests me.
Also niche developement of social networks is an area I am looking at. Facebook and Myspace will look old fashioned in 2 years. I am particularly interested in social networks that are aligned with offline brands that have not entered this market yet and that can offer more than just 'friendship' etc.
There is a network, the name escapes me now, that is for investors, but it is connected with users brokerage accounts and aggregates real time investment decisions and creates 'crowd powered' recommendations. As social networking becomes a more sophisticated database management solution opportunities like this will emerge in listed businesses that leverage their digital rights.
sorry... I have ranted on....
New bull market?
