John Burbank talks oil, macro with Bloomberg

Noted hedge fund manager, John Burbank of Passport Capital talks oil, investing in Saudi Arabia, stockpicking in 2012, and global macro in this recent Bloomberg TV interview.

A few key points from Burbank's interview:

1. Oil prices are up 16% YTD, which hurts the average oil-dependent consumer (chart). Burbank feels global QE operations and "liquidity" boosts are pushing up oil prices. If gold goes up 10-20%, it doesn't cause problems for consumers the way rising oil prices do.

2. Rising oil prices are benefiting Saudi Arabia. Passport now has 15% of its capital in the Saudi stock market, a country which is slowly opening up to foreign investors.

Passport started investing in Saudi Arabia in 2008 (through notes & swaps) and Burbank feels the potential there is similar to India in the 2003-2004 period. Here's a chart of India's SENSEX over the 1998-2012 period.

3. Liquidity is coming into the market because "things are really bad", not because things are good. Burbank feels that confidence in central banks is misplaced. The average Westerner's standard of living is not improving; rising prices and stagnant incomes are squeezing them.

4. 2012 is a stockpicker's market, a good year to be long or short certain sectors and individual names.

Burbank is not banking on a sustained global rally. Instead, he's looking to invest in stocks that can outperform regardless of growth rates in the overall economy. Biotech is one area that he finds promising at this time.

Enjoy the interview, and if you'd like to hear more from Burbank and other macro stars, check out the interviews in the related posts section below.

Related articles and posts:

1. Must hear interview with John Burbank of Passport Capital.

2. Michael Burry talks "Big Short", America's future at Vanderbilt.

Nasdaq credit rating junked.

S&P cut Nasdaq's credit rating to junk status citing debt burdens and its questionable strategy to buy a controlling interest in the London Stock Exchange. Financial Times reported that the exchange's counterparty credit & bank loan rating were lowered fromm BBB- (lowest investment grade rating) to BB+. The change will increase Nasdaq's borrowing costs should it wish to pursue aquisition targets. For an earlier look at the exchange consolidation trend that brought about Nasdaq's push for a stake in the LSE, please see "Exchange fever" .

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Jesse Livermore: How to Trade in Stocks (1940 Ed. E-book)

If you've been around markets for any length of time, you've probably heard of 20th century supertrader, Jesse Livermore . Today we're highlighting his rare 1940 work, How to Trade in Stocks (ebook, pdf). But first, a brief overview of Livermore's life and trading career (bio from Jesse Livermore's Wikipedia entry). "During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. He subsequently lost both fortunes. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly. Ironically, Livermore sometimes did not follow his rules strictly. He claimed that lack of adherence to his own rules was the main reason for his losses after making his 1907 and...

Finance Trends Letter

Search This Blog