 |
|
Volume 1 - Issue 2
September 20,
2004
Basic Points:
The Bear and
The Dragon
By Donald
Coxe
| |
|
Last week a reader sent me a very
interesting essay by Donald Coxe, the Global Portfolio
Strategist, BMO Financial Group. He is also the Chairman and
Chief Strategist of Harris Investment Management in Chicago,
and Chairman of Jones Heward Investments in Toronto.
He looks at the global oil situation from a different
view, one truly "Outside the Box." There is more to oil prices
than Saudi production. "We'll miss the days," he writes, "when
the G-7 and OPEC managed matters so that we had free time and
money to blow on Nasdaq stocks, in the solipsistic confidence
that we knew it all and had it all."
Today's letter is
excerpted from the August 27, 2004: "Basic Points: The Bear
and The Dragon" by Donald Coxe, Global Portfolio Strategist,
BMO Financial Group.
|
| |
|
|
|
 |
Text excerpted from: "Basic Points:
The Bear and The Dragon"
By Donald Coxe |
 | |
|
Requiem for the Elites
Forecasting was so much easier when the global
economy was ruled by the Democratic White Men's Club of
the G-7 and the Swiss, plus the generally complaisant
Japanese. Yes, there was OPEC, but after the
unpleasantnesses of the 1980s, OPEC seemed, under Saudi
leadership, to be willing to keep the Club fueled with
cheap oil, so the global VIPs didn't have to spend much
of their discussion time (or much of their nation's
money) on OPEC and its quota problems. The Saudis might,
from time to time, have to intervene to prevent oil
prices from collapsing, but that was their worry. Those
global recessions caused by OPEC-spawned oil price leaps
were simply distasteful contretemps of history.
Besides, as the new millennium dawned, few, if
any of the Widely Respected among the intellectual,
political and financial elites were seriously interested
in oil or in commodities generally. Agriculture was an
ongoing concern, but only because the European Union
devoted more than half its budget to cosseting its
farmers and France made sure that nothing on the WTO
agenda was going to interfere with that arrangement.
Then came a series of shocks to the Club's
complacency:
1. George Bush, who had owned a
baseball team, was elected President, although he had,
from the Club's perspective, three strikes against him:
he was openly religious, he had a quasi-cowboy
background in the Texas oil industry, and he ran against
the sophisticated self proclaimed inventor of the
Internet.
2. Nasdaq's fall turned out to be
something much worse than the "correction" the elites
were so unanimously eager to call it.
3. The US
and the world slipped into a recession, the consequence
of the Triple Waterfall collapse of technology stocks
and technology companies.
4. Al Qaeda suddenly
became the most influential global multinational company
of the new millennium. It showed its ability to use free
TV slots as its key marketing tool. It displayed
sophistication in financing and recruiting
internationally, building its brand into a global force,
franchising that brand successfully, and disrupting
established trading channels--even to the extent of
shutting down the NYSE.
5. Bush's response to Al
Qaeda's most audacious venture was to declare a "War on
Terror." Not only did this mean driving the US defense
budget back up to levels that were somewhat reminiscent
of the Reagan era, but it meant open war in Afghanistan
and Iraq--two countries that European elites had long
been handling in what they called "constructive
engagement."
6. The Club's favorite currency was
the dollar. Its 45% appreciation against European
currencies during the late 1990s had caused some
embarrassment to the Euroelites, but they understood
that it kept the US consumer available for high-cost
European producers. That comfortable relationship was
put at risk when the dollar began to look like the
currency equivalent of a technology stock.
7.
China had concerned the industrial world mostly because
of its ability to set global prices at levels Club
members couldn't match for a continuously-increasing
range of manufactured goods. By 2002 it was becoming a
new kind of problem: by its fearsome purchasing power,
it was becoming the price-setter for an increasing range
of raw materials, initially metals, but
then--ominously--oil.
8. OPEC responded to the
novelty of a global shortage of oil by raising its
quotas, then producing flat out--yet global oil
inventories failed to rise. "Don't worry," said the
elites, "There's lots of oil in the world! Look at those
huge production increases in Russia, and the big inflow
of capital to develop the enormous reserves there. The
Saudis can turn on the taps any time. Oil is headed back
into the low twenties--maybe even the teens."
9.
Meanwhile, back in the Kremlin, the reconstituted KGB
elites looked at the runaway profits and rising power of
the oil oligarchs and decided to show who was boss.
Yukos's flamboyant Mikhail Khodorkovsky got slapped into
a jail cell, along with two ordinary criminals, where
showers are provided weekly; he was charged with almost
everything except supporting the Chechnyan terrorists.
Capital inflows collapsed, along with prices of Russian
oil companies' bonds and stocks. Forecasters had been
relying on Yukos to continue boosting its production.
Instead, its daily oil output fell by 4.5% to 1.72
million barrels a day.
10. In January 2004, Club
members were fretting that soaring oil and commodity
prices, and a strong global economy could re-ignite
inflation. Some central bankers were already tightening.
Global bond markets were sliding. Then China announced
it was going to rein in its spectacular growth.Within
weeks, the Middle Kingdom's economy had turned on a
yuan. Next, as if some miasma had mystically spread
across the world, economic numbers almost everywhere
turned from strong to moderate to weak. Leading Economic
Indicators worldwide turned down, with the US indicator
falling in both June and July, a trend shift of possibly
momentous proportions.
11. By July, global stock
markets had shed the last soupçon of bullishness
and had begun emitting ursine odors. The Fed finally
started raising rates in June, but, despite its strongly
bullish economic predictions, most of the data published
in the days and weeks thereafter made it look as if
Greenspan were taking away the punch bowl after most of
the partygoers had already left. Besides, some
conventional monetarists griped, by raising the
announced price of its money, all the Fed was doing was
ratifying what had already happened: year-over-year
growth of M-2 has been among the lowest in years.
The Fed was not suddenly shifting from a heavy foot on
the accelerator to a heavy foot on the brakes.
12. The front-page story worldwide became the
threat to the world from $50 oil.
What was going
on--and who, if anyone, was in charge?
The
Rivalry for Asia
Mao and Moscow inked a
friendship and alliance treaty in 1950. "The
Internationale" proclaimed the world-wide workers'
revolution, in which all men were brothers and national
distinctions would be wiped away within minutes of the
conquest of capitalism and colonialism.
By 1962,
the Sino-Soviet Partnership for Peace and Progress had
become the Sino-Soviet Rift. When China invaded India,
the USSR publicly supported India (but did not involve
itself militarily). Moscow and Beijing began to flood
Party newspapers abroad with competing claims for
Marxist purity. Result: splits within the avowed
Communist movements.
Of late, Beijing has chosen
to present its foreign policy principles to scholars and
diplomats under an old-but-newrubric, "The Five
Principles of Peaceful Coexistence." This propaganda
line says that nations can live peacefully together only
if they respect each others' sovereignty and territorial
integrity and refrain from interfering in each others'
internal affairs. Then the Chechnyan rebellion brought
Vladimir Putin to power. The rivalry of the 1960s
between Russia and China was about to be revived under
new management.
Putin's attack on Yukos is part
of his reinstatement of Kremlin control over the energy
sector. For example, recently, it was announced that
Vladislav Surkov, a Kremlin insider, was named to the
board of oil giant Transnefteprodukt, and one of Putin's
closest aides replaced a bureaucrat as head of Rosneft,
the state-owned oil company. By staffing his
administration with former KGB colleagues, he has built
a staff of the kind of dedicated, ruthless apparatchiki
that made the USSR the nation that was, for a time, #1
in ICBMs and #1 in space technology. The world was
overawed by a society that could achieve those
technological triumphs. That high-tech edifice was built
on the base of a primitive commodity-oriented
economy--agriculture, steel, mining, forest products,
oil and gas. Back in the 1950s, a commodity based
economy was wonderful.
One major economic group
remained beyond Kremlin control, and was threatening to
become an alternative power center as a result of the
China-driven change in world energy markets.
Putin doubtless understood long before any of
those highly paid prophets of Wall Street that oil
prices were heading much higher. That meant that he not
only had a splendid opportunity to move the economy
forward on a rising tide of oil revenues, but also that
he dared not let the oligarchs gain the kind of
political power that would flow from being immensely
rich sheikhs in a society where average incomes were
$8,000 (on a purchasing power parity basis).
The
Yukos drama is about (1) wresting profits from the
world's biggest publicly-traded oil production company,
and (2) publicly humiliating an oligarch (who happens to
have Jewish ancestry) who crossed the line in the sand
Putin had drawn against oligarchic participation in
politics, and (3) demonstrating to the world that,
whatever may have been past law and contract, no
significant oil, gas or pipeline development will occur
in Russia without Kremlin approval. It will involve
direct government ownership and control-- even when the
company is publicly traded. This is already being called
"The Renationalization of Russian Oil." Although Exxon
Mobil has pulled back from plans to make big investments
in Russia, Chevron-Texaco, Shell and Conoco Phillips
appear willing to take minority positions in state owned
firms in order to be able to gain access to Russian oil
and gas reserves. Big Oil is also digesting the
knowledge that one of Khodorkovsky's sins was to enter
into an agreement to supply natural gas to China. Putin
has overruled that deal, and is seeking to send the gas
by a much longer and costlier route--to Japan.
Why?
Maybe this is the opening salvo in
the next phase of that long Asian rivalry. Yes, the
Russians and the Japanese had a war nearly a century
ago, but Japan is no threat to Russia today. Japan has
money, technology--and a near-desperate need for oil and
gas.
The Bear & the Dragon in an
Oil-Short World
Putin's Petroputsch has
helped to roil global oil markets and stall the global
economy. He couldn't have this influence were it not for
the ravenous demand from The Dragon.
This week
Ed Hyman's ISI, reporting on the latest International
Energy Agency statistics, advises that world oil demand
since 1988 is up 25%, from 64.95 million b/d to 82.15
million b/d. In those sixteen years, European
consumption is up exactly 16%, US consumption up 18%,
Japan's up 25%, and China's up 175%. Yes, China's Great
Leap Forward in Oil Demand comes off a small base, but
its absolute consumption has risen more than the
US in that period--with American consumption up 3.08
million b/d and China's up 3.98 million b/d. China now
consumes more oil than Japan--7.6% of the world total,
compared with 7.4% for the world's second largest
economy.
Economics 101: all commodity prices are
set at the margin.
China's fast-growing demand
for oil at a time Russian oil production is constrained
by Putin Petropower Politics has had enormous impact.
By moving in just four years from being an oil
exporter to being the world's second largest oil
importer, China turned a short-term global oil surplus
into a long-term global deficit. As The Wall
Street Journal reported yesterday, neither OPEC nor
Big Oil are reinvesting their remarkable oil profits in
exploration and development. Russia is the single best
hope for being able to generate significant near
term--and longer term--production increases; it has
well-identified drilling targets, a theoretically
capitalist system, and grew its output faster in the
past five years than anywhere else in the world. OPEC is
no longer the answer; too many of its members are being
forced by dysfunctional economies to spend their oil
receipts in handout schemes, and few have enough
significant seismically-identified targets to drill and
develop enough production to more than replace the
inevitable production declines of this decade.
Russia has the hydrocarbon reserves, the brains,
and the cash flows to keep raising its output. To the
extent it liberalizes its oil industry, it will attract
gargantuan cash flows from Big Oil, which has virtually
run out of great places to invest its bourgeoning
profits.
Here is a snapshot of the global oil
situation:
1. Within OPEC, only Saudi Arabia,
Iraq, and Venezuela have potential excess production
capacity--and the total available increase within the
next 2 years is less than 2 million b/d. All other
members are operating flat out. Some members are
producing modestly below their quotas (such as
Indonesia), but that is because they have underinvested
in production capacity and their wells are experiencing
the inevitable decline rates.
2. The Saudis have
publicly announced plans to invest as much as $30
billion this decade in bringing on new production.
That's the good news. The bad news is (1) Most of this
will be heavy, high-sulfur crude, and Western refinery
capacity is already stretched. (2) Because of the
decline rate on existing Saudi oil fields, less than
half this new production will be a net boost from
current Saudi oil output. (3) Large-scale water
injection will be needed: water is, we are given to
understand, somewhat rare in the Saudi desert and must
be produced by desalination and then transported to the
wellhead. Apparently, these new fields wouldn't be
economic at real oil prices below $32 or so. (The Street
has, we understand, long assumed that (1) anywhere in
Saudi Arabia you punch a hole, oil comes up, and (2)
existing oil fields are near-perpetual producers.)
3. Iraq is able to produce more than 2 million
barrels a day except when terrorists blow up pipelines
and/or loading facilities. If (when?) the Islamofascists
have been crushed, Iraq could embark on a massive
capital spending program that could, if reserve
guesstimates are anywhere near accurate, treble its
production by 2010 or thereabouts.
4. Venezuela
has huge reserves of heavy oil, but they could only be
developed over many years and after many, many billions
of dollars have been invested. With the tainted
referendum victory of Castro buddy Hugo Chavez, the
priorities will be (1) to continue the huge handout
schemes the referendum vote generated: the state oil
company was tapped for $1.7 billion for election
goodies; (2) to supply oil to Cuba cheaply and on
credit, (3) to use similar petrobribes to influence
politics in other Latin American nations. Although Big
Oil is lining up to get Chavezian approval to develop
those massive Orinoco deposits, the companies will
surely be cautious about making multi-billion-dollar
investments in a hurry.
5. Oil production in
major existing Western production zones, such as North
Slope Alaska and North Sea, is either at or past its
peak. No new giant fields have been identified.
6. The oil reserves contained in the various
heavy oil sands deposits of Northern Alberta are very
profitable at oil prices above $30, as long as the
Canadian dollar sells at a discount to its American
counterpart, and as long as natural gas prices do not
trade significantly above their BOE (Barrel Of Energy)
equivalent--one-sixth the value of oil. (Natural gas is
used to heat up the oil stuck in the sands so it can be
pumped to the surface.) However, developing these
immense resources takes years and billions in capex,
and, in the meantime, Alberta's conventional crude
production will be declining, albeit modestly, so on a
net basis Canada cannot be a major factor in the global
oil equation.
7. Caspian oil reserves are huge,
but bringing them to global markets involves political
risks--getting agreements from all requisite
governments, some of whom are mere statelets, to the
production facilities and pipelines--and even greater
geopolitical risks--any route must pass through
territories already known for large-scale Islamic
terrorist activity.
8. Nigeria's production is
intermittently interrupted due to a multi-decade dispute
between the inhabitants of the Niger Delta (source of
most of the nation's oil) and the government in Abuja
(source of most of the nation's problems).
9.
The International Energy Agency, which underestimated
global oil demand for years, now includes Chinese and
Indian consumption in its calculations. It forecasts a
deficit of more than a million barrels a day for the
Fourth Quarter.
10. According to The Wall
Street Journal, the world's operating rig count
today is down by more than half from the peak [which was
near the top of oil's Triple Waterfall] in 1981. E&P
companies that take big exploration bets are punished in
the stock market, which wants dividends and stock
buybacks, because the consensus still expects a plunge
in oil prices. "Show us the money, don't put it back
into the ground."
For the first time within
living memory, oil is selling at free market prices.
That also means that the willingness to look for oil is
driven by the market's perception of future oil prices,
not by perceptions of what a cartel will dictate.
During the years before 1972, when the US was a
net oil exporter, the Texas Railroad Commission in
effect set a floor for oil prices through its regulation
of production in that state. OPEC took over when US
exports dwindled to insignificance and the nation became
a net oil importer on a grand scale. Barring a global
recession, OPEC will no longer have any real
price-setting function to perform. It is becoming a club
for Arab glitterati abroad. In recent weeks, Saudi oil
minister Al Naimi made repeated pledges to drive down
oil prices through increased production. For decades,
that kind of statement from a man in his position was
enough to send world oil prices plunging. This time,
markets treated his remarks as mere blustering--and oil
prices continued to rise. The market is in
charge.
Who Is "The Market?"
As oil prices kept rising farther and farther
above the Street's forecasts, the Shills &
Mountebanks, who told people to sell oil stocks because
of a coming oil collapse, scrambled to issue
explanations.
Their three most-disseminated
explanations:
1. Iraq
This claim is
founded in actuality: Iraqi oil production did fall by
more than 1.5 million b/d in 2003 until Halliburton and
the US Corps of Engineers and a group of courageous
Iraqi engineers and technicians got it back up to
speed--a year ago. Oil briefly spiked to $40 a barrel as
war loomed, but it traded between $26 and $32 for the
rest of 2003. So why continue to blame Iraq? The
advantages of this excuse are (1) that the idea that
Bush waged the war for oil is widely-believed,
particularly among followers of Michael Moore; so this
excuse plays to a demonology that is already
well-established; (2) Jihadists have targeted Iraqi
production and distribution facilities with frequent
success this year, but total production cutbacks are in
the millions of barrels range. So the S&Ms have a
point: except that those cutbacks would have been
meaningless if, as they insisted, there was a huge
global oversupply of oil.
2. Terrorist
Threats
The S&Ms suggest that a "fear
premium" of as much as $7/b is built into oil prices
because of terror threats toward oil facilities
worldwide. Fear can be rational or irrational. There's
no doubt Al Qaeda and its brethren want to cause trouble
in Saudi Arabia, and they certainly have the capacity to
sink an occasional oil tanker or blow up a loading
facility. But we've known since 9/11 of their aim of
destroying the West, so why shouldn't the "experts" have
long ago decided that oil deserved some kind of fear
premium, rather than, for three straight years,
predicting a coming oil price collapse? In any case, if
there's a $7 premium in spot oil prices, then global oil
inventories should have climbed dramatically as
frightened consumers hoard oil against Islamic fanatics.
But global oil inventories (apart from the Strategic
Petroleum Reserve) have risen imperceptibly.
3. A Speculative Mania
That S&Ms
should descry a speculative mania implies that those who
fostered the growth of the biggest of all manias had
acquired useful experience. It is as if O. J. Simpson
were to present a paper at a criminology conference
about anticipating domestic murders.
There's no
doubt that the oil runup has attracted speculators, but
there is reasonable doubt that they created it. The
asset that has outperformed almost all others this year
can hardly escape the attention of hedge funds,
commodity funds, and just plain punters. The Wall
Street Journal notes that T. Boone Pickens' hedge
funds have reaped more than $550 million in oil gains in
the past two years, and Paul Tudor Jones and other
well-known players have also won big.
But
non-commercial investors held just 28% of the long bets
on the NYMEX Crude contracts as of last week (according
to the Journal). Goldman estimates that the total
stake of such players would only be enough to drive oil
prices up by a few dollars.
Besides, for every
buyer, there's a seller, and there's no doubt that oil
producers have been selling heavily forward--more than
enough to overcome hedging purchases by consuming
industries, such as utilities and transportation firms.
Indeed, there is evidence that some E&P companies
have listened to the terrible advice they were getting
from Wall Street investment bankers and were selling far
ahead "to lock in overvalued oil prices." I've heard
tales of bankers telling firms that they could improve
their credit ratings if they'd sell forward, because
they could show lenders they had guaranteed profits far
into the future.
Speculative mania?
Looks to us like a difference of opinion between
those battle scarred oil industry executives who managed
to survive oil's Triple Waterfall and speculators who
believe that the 20-years of disappointment for oil are
yesterday's story.
Manias are when nearly
everybody agrees, creating Shared Mistake.
Yes,
when there's a 50% rally in the world's most important
commodity, there's bound to be raucous speculation. But
this isn't a case of the rooster's crowing that brought
the sun up.
Investing When the Story Is On
Page One
The Rule of Page 16 says that
investors should be leery of investing heavily in either
oil futures or oil stocks these days. That Rule says,
"You neither make nor lose serious money by the outcome
of a story on Page One. You make or lose serious money
from the outcome of a story that's now on Page 16 but is
headed for Page One."
Rule of Big Numbers: When
any market is moving--either up or down--toward a very
big number, and that number is daily discussed on Page
One, the market will get close, but not touch the magic
number. When every newscaster is talking of the threat
of $50 oil, you could feel some confidence that oil
would get close, but would then pull back.
Looking at oil's action in recent weeks, one has
to wonder about a short squeeze. None of the news
stories cited by the new experts on oil prices could
explain the relentlessness of oil's run from $36 in late
June to $49.
If so, who was getting squeezed?
We know that some of the big Wall Street
investment banks trade heavily in commodities for their
own accounts. Some of them have been bulking up their
oil trading facilities. Another possibility is that some
of the big E&P companies who had been "hedging" by
selling forward, realized they were actually
"speculating" big time, and that their shareholders were
getting reamed by their bets against oil. If so, they
might have bought in their out-month sales, thereby
putting pressure on the spot price
Regardless of
the internal factors in the oil market, there is no
denying that the run from $36 to $49 was bad news for
the global economy. Oil is now back below $45 and should
head back to $40 or even lower--once the short-term
speculators get squeezed out.
The best outcome
for investors would be a drop in oil prices back to the
mid-thirties. That would prevent a severe squeeze on
heating oil users this winter. Those who've shrugged off
the effects of high oil prices on car owners don't seem
to have considered what happens to residents of the
American Northeast if they're still paying heavily for
gas to drive to work and their heating oil costs are up
40% from last year.
The Stuff of a
Complicated Relationship
Much of the story
of this century will be about the complex relationships
that will develop between Russia and China-- and between
both those nations and India.
By cutting back on
Russian oil industry expansion at a time of the first
true global oil shortage, Putin has not only enriched
his nation and strengthened his currency reserves, but
he has made himself into the world's most influential
oil sheikh. He is playing his hand well.
China
must manage its relationship with its powerful neighbor
carefully. It needs almost everything Russia produces
(with the possible exception of vodka). It also needs to
keep the cost of its commodity imports--most
particularly oil--to levels its still-youthful economy
can afford.
We'll miss the days when the G-7 and
OPEC managed matters so that we had free time and money
to blow on Nasdaq stocks, in the solipsistic confidence
that we knew it all and had it all.
Basic Points is a
publication prepared by Donald Coxe of Harris Investment
Management Inc. ("HIM") and BMO Harris Investment
Management Inc. ("BMO HIMI") for the exclusive use of
clients of BMO Nesbitt Burns Inc., BMO Nesbitt Burns
Corp., HIM, Harris Trust & Savings Bank, BMO HIMI
and Jones Heward Investment Counsel Inc. (collectively
referred to as the "Global Asset Managers").
All
rights reserved.
The opinions, estimates and
projections contained herein are those of Donald Coxe
and do not necessarily represent the opinions of HIM and
BMO HIMI as of the date hereof, and are subject to
change without notice. HIM, BMO HIMI and the other
Global Asset Managers believe that the contents hereof
have been prepared by, compiled or derived from sources
believed to be reliable and contain information and
opinions which are accurate and complete. However, the
Global Asset Managers make no representation or
warranty, express or implied, in respect hereof, take no
responsibility for any errors and omissions which may be
contained herein and accept no liability whatsoever for
any loss arising from any use or reliance on this report
or its contents. Information may be available to the
Global Asset Managers which is not reflected herein.
This report is not to be construed as an offer to sell
or solicitation for or an offer to buy any securities.
The Global Asset Managers and their affiliates and
respective officers, directors or employees may from
time to time acquire, hold or sell securities mentioned
herein as principal or agent. Any of the Global Asset
Managers may act as financial advisor and/or underwriter
for certain of the corporations mentioned herein and may
receive remuneration for same. Each of the Global Asset
Managers is a direct or indirect subsidiary of Bank of
Montreal. Bank of Montreal or its affiliates may act as
lender or provide certain other services to certain of
the corporations mentioned herein and may receive
remuneration from the same.
® "BMO" is a
registered trade-mark of Bank of Montreal, used under
licence. "Nesbitt Burns" is a registered trade-mark of
BMO Nesbitt Burns Corporation Limited, used under
licence. TM "The M-bar roundel symbol" is a trade-mark
of Bank of Montreal, used under licence.
|
 | |
|
| |
|
That's all for this Monday
evening. I am getting on a plane tomorrow in Hamilton,
Bermuda, dodging a hurricane or two and spending the next
twelve hours getting to San Francisco.
Your wondering
what idiot agreed to this travel schedule analyst,
John F. Mauldin
johnmauldin@investorsinsight.com
|
| |
|
|
You are currently
subscribed as vronsky@comcast.net.
To unsubscribe, go
here.
Reproductions. If you would
like to reproduce any of John Mauldin's E-Letters or
commentary, you must include the source of your quote and the
following email address: JohnMauldin@InvestorsInsight.com.
Please write to Reproductions@InvestorsInsight.com
and inform us of any reproductions including where and when
the copy will be reproduced.
John Mauldin is president of Millennium Wave Advisors, LLC, a
registered investment advisor. All material presented herein
is believed to be reliable but we cannot attest to its
accuracy. Investment recommendations may change and readers
are urged to check with their investment counselors before
making any investment decisions.
Opinions expressed in
these reports may change without prior notice. John Mauldin
and/or the staffs at Millennium Wave Advisors, LLC and
InvestorsInsight Publishing, Inc. ("InvestorsInsight") may or
may not have investments in any funds cited above.
PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS.
THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN
INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE
INVESTMENTS, INCLUDING HEDGE FUNDS, YOU SHOULD CONSIDER
VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN
ENGAGE IN LEVERAGING AND OTHER SPECULATIVE INVESTMENT
PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN
BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE PERIODIC PRICING OR
VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX
STRUCTURES AND DELAYS IN DISTRIBUTING IMPORTANT TAX
INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY
REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN
MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND
ARE KNOWN ONLY TO THE INVESTMENT
MANAGER.
Communications from InvestorsInsight are
intended solely for informational purposes. Statements made by
various authors, advertisers, sponsors and other contributors
do not necessarily reflect the opinions of InvestorsInsight,
and should not be construed as an endorsement by
InvestorsInsight, either expressed or implied.
InvestorsInsight is not responsible for typographic errors or
other inaccuracies in the content. We believe the information
contained herein to be accurate and reliable. However, errors
may occasionally occur. Therefore, all information and
materials are provided "AS IS" without any warranty of any
kind. Past results are not indicative of future
results.
We encourage readers to review our complete
legal and privacy statements on our home
page.
InvestorsInsight Publishing, Inc. -- 14900
Landmark Blvd #350, Dallas, Texas 75254
©
InvestorsInsight Publishing, Inc. 2004 ALL RIGHTS RESERVED
|
| | |
|
