The Daily Alpha: Alternative Thinking on New York Mets Statues, Brexit Bets, and the Alts Slump

The Daily Alpha: Alternative Thinking on New York Mets Statues, Brexit Bets, and the Alts Slump

Garrett Baldwin

June 23, 2016

“My expectation is Remain wins.”

That’s Jim Paulsen, chief investment strategist at Wells Capital Management.

You might have heard, British voters are heading to the polls today, and they’ll decide whether to keep calling their meat pies “meat pies” or to succumb to the eternal damnation of being force fed European goulash.” (Wait… that can’t be right…)

More than 46 million British voters are expected to vote on whether or not to remain in the European Union. The campaigns are over, and all of the pro-EU people have warned voters that leaving the EU would send the world’s fifth largest economy back into the dark ages. Tad overdramatic, but these guys have a lot to lose.

On the hedge fund side, it gets interesting. London-based hedge funds control 85% of the assets of the entire European hedge fund industry. A shakeup would naturally come quickly, and dramatic changes would occur in the British banking sector in the event of a departure.

Here’s a fun story though: Bloomberg reported yesterday that the two co-founders of hedge fund Marshall Wace were personally split on whether Britain should remain in the European Union. In fact, they both donated “100,000 pounds ($147,000) each to different sides before Thursday’s referendum.”

So, either way – given the size of these donations – this hedge fund wins right?

“Investors who tried to get exposure to private equity and hedge funds through ETFs have fared poorly as well.”

Howard R. Gold at MarketWatch doesn’t pull any punches.

It’s been a bad year for alternative investors. Of course, there are a lot of “alternative investments” that are missing from this chart and article, but many of these exhibited here have gone “mainstream.”

The bright side: Real estate has been on a tear.

“What you should understand is this is behavioral economics and what's really driving the economy and asset prices.”

That’s former hedge fund manager Raoul Pal giving away the obvious secret to the markets.

Theoretical economics doesn’t work.

Pal retired at 36 after managing GLG’s global macro fund.

He put together a great video – granted 40 minutes long – discussing short-term and long-term business cycles. It’s a great piece on risk-taking and understanding the boom-and-bust cycles fueled by human and trader psychology.

Check it out here.

“We are in receipt of a search warrant from law enforcement and are fully cooperating.”

That’s Platinum Partners spokesman Montieth Illingworth.

The FBI raided Platinum Partners on Wednesday a few weeks after the arrest of executive Murray Huberfeld.

He was accused of bribing union boss Norman Seabrook in exchange for access to a $20 million investment from the New York City Correction Officers’ Benevolent Association.

If you recall, Seabrook dresses like Breaking Bad’s Gustavo Fring, refers to himself in the third-person when talking about how he must “get paid,” and has a history of obstructing criminal investigations and court cases involving the abuse of prisoners by guards in his union.

“Last year, when prosecutors charged 10 officers in a beating that fractured an inmate’s nose and eye sockets, Mr. Seabrook vigorously defended them,” the New York Times writes in a follow up on Seabrook’s arrest that reads like an acid-riddled John Grisham novel.

“They should have a statue for all those numbers they have retired on their wall -- Seaver, Gil Hodges, Mike Piazza."

Finally, a little something for fans of the New York Mets.

This week, Nancy Seaver – wife of Mets great Tom Seaver – called it “ridiculous” that the New York Metropolitans haven’t built statues outside of Citi Field of the players whose numbers the team has retired over the years.  

We’re sure that they’d love to build a statue for him, but they lost a lot of money to Bernie Madoff, and they owe another $1.2 million check to Bobby Bonilla on July 1, 2016.

In fact, the Mets will be paying Bonilla $1.2 million every July 1 through 2035 thanks to one of the most lop-sided options buyout in contract history.

That money could buy a lot of statues…

But the Mets don’t need statues right now.

They need a left fielder without a huge strikeout rate, a second baseman who can hit over .230, and Matt Harvey to return to form.


That’s all for today.

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Garrett Baldwin (@garrettbaldwin) is the voice of the The Daily Alpha and the features editor for Modern Trader magazine.


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