…Icahn, Soros, Druckenmiller and Zell’s all on my side. And most importantly, a UBS Client Advisor enthused excitedly, while we were sharing a hot jacuzzi tonight, that there’s no froth or bubbles in this current boiling-hot equities rally.
Okay, the encounter is a lot less salacious than it sounds. I was just soaking in the blisteringly hot outdoor jacuzzi in the estate on this slightly-chilly rained-out evening (recently found out that soaking my stiff and sore post-op lower back in hot water before and after my swim+water therapy sessions in the pool, eases the soreness and pain greatly) when this gent lowered himself gingerly into the steaming waters, and we do what us guys do when we find ourselves in close proximity sharing a small space half-naked with our wet bodies: we grunted/acknowledged each other, avoided each others’ eyes, shifted our positions to be as far away as the small space will allow using a divide-and-conquer algorithm, and started to meditate intensely upon the whatever-it-may-be but suddenly interesting object in front of us – for him a leafy tree or bush; for me, an amazingly deep azure blue ceramic tile arrayed into an Alhambra-like interlocking mosaic pattern…
But you can avoid filling in the awkward silence for only so long.
After we made our short introductions, what followed was actually a pretty interesting conversation. This Swiss gent with only the slightest of a Swiss-German accent in his English has been with UBS his entire career, starting with the famed Swiss direct apprenticeship at age 17 with their banks and financial firms, learning the ropes and working their way up through the ranks while obtaining their technical certification along the way. So, a true blue UBS man then. Very useful for me to pump him for some updates on the wealth and asset management scene in recent years, whether the trend towards IAMs (independent asset managers) is real and sustainable, his take and gauge on the popularity of discretionary portfolio mandates and/or managed account structures with clients, and his views of a certain once-gigantic-now-much-reduced-but-still-formidable US competitor. As expected, he took some swipes at Citi, for being silo-like across their functions, especially with client onboarding. (But I’ll reserve my judgement; after all, back in April I was seriously considering taking up an offer from an acquaintance in Citi for a portfolio position there. Thought it might be a good opportunity to see and experience a portfolio management role within the sell-side of the asset management industry, and potentially very useful for my eventual aims and ideas. But, am in a hurry to build my own thing…)
Anyway, as you would more or less expect from a client advisor/relationship manager, he’s a BOOYAH! bull.
Not sure whether he’s channeling Cramer, a previous Bianco, an expansionary Morgan Stanley, or his own cautiously hedged house view. But he was going on exuberantly about how we are still a long way off from the final euphoria stage of this current rally/bubble, and there’s ‘huge amounts of cash still sitting on the sidelines’.
Hmm, I still prefer the cool quantitative analysis of Hussman; though admittedly, what’s the point of being academically rigorous and iconoclastic, but with embarrassing negative returns over 1, 3, 5, and 10 year periods.
And here’s what the collective brain trust of the alternatives/hedge fund industry thinks of the current record S&P 2000 round number:
Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Plunge
“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.
Billionaire 1: Sam Zell
On Stocks and reality…
“People have no place else to put their money, and the stock market is getting more than its share. It’s very likely that something has to give here.”
“I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking,” he said. “If there’s a change in confidence or some international event that changes the dynamics, people could in effect take a different position with reference to the market.”
“It’s almost every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue,” he said. “When you got a demand issue it’s hard to imagine the stock market at an all-time high.”
He also lamented about how difficult it is to call a market top. “If you’re wrong on when, that’s a problem.” His answer: “You got to tiptoe … and find the right balance.”
“This is the first time I ever remember where having cash isn’t such a terrible thing, despite the fact that interest rates are as low as they are,” he added.
Billionaire 2: George Soros
Soros has once again increased his total SPY Put to a new record high of $2.2 billion, or nearly double the previous all time high, and a whopping 17% of his total AUM.