Discerning the good long-term bets from the bad ones

Posted on 13. juil, 2011 by Jean Jacques Ohana in Weekly Focus

Although the financial integration is historically high as far as short-term asset returns are concerned, the long term trends of cyclical assets have shown very different patterns from 2010 onwards.
Averaging the trends over the past 18 months provides an interesting perspective on long-term asset dynamics, as this selects assets that have proved the most resilient [...]

Using VIX futures contracts as a hedge against increased uncertainty

Posted on 15. mar, 2011 by Jean Jacques Ohana in Weekly Focus

The dark clouds are accumulating over the horizon: not only do we have to worry about 1) the euro zone sovereign debt problem, which has known a recent aggravation and to which the European leaders have once again failed to bring a definitive answer at the last European summit, 2) the MENA unrest, 3) the [...]

When will the Commodities Indices myths collapse?

Posted on 09. juin, 2010 by Jean Jacques Ohana in Weekly Focus

Two Commodities Indices have been designed to play a role in enhancing and diversifying global diversified portfolio returns: the GSCI and the DJ UBS (ex DJ AIG).
Both arguments are contradicted by the new financial reality.
Myth 1: diversification
Commodities are not any more a diversifier as the new zero rate paradigm makes them more similar to other [...]

Does oil respond to speculation or fundamentals?

Posted on 17. mar, 2010 by Steve Ohana in Weekly Focus

The energy complex seems to go through a highly interesting new period accumulating several bullish signs. From the beginning of 2009 onwards, the oil curve has been flattening consistently, meaning that the harm inflicted by the contango to long investors has considerably decreased over time as exhibited in the chart below:

Sources : Bloomberg, Riskelia’s estimates, the [...]

Do commodities represent an asset class?

Posted on 28. fév, 2010 by Steve Ohana in Weekly Focus

Commodities imposed themselves in the investment arena in 2004, when emerging countries and specifically China started deeply changing commodities’ long run fundamentals.
An annual consumption growth of more than 6% on many depletable commodities (energy and base metals markets) fostered a major bull run on commodities. The fundamentals are indeed preoccupying: China alone will consume 9 [...]

Why commodity prices rise together with inventories?

Posted on 18. fév, 2010 by Jean Jacques Ohana in Weekly Focus

In traditional commodity cycles, commodities prices tend to rise when inventories decrease and conversely drop when inventories increase. This mechanism is highly intuitive since when inventories are rising (resp. declining), we can infer that the supply is large (resp. low) in face of demand, which translates into a downward (resp. upward) pressure on prices.
The traditional [...]