Monthly Archives: April 2013

Visitors Flock to Support Boston Businesses

With three killed and over 200 wounded, Boston is still reeling from the aftermath of the marathon bombings. Small businesses have reported millions of dollars of losses as a result of the blasts as well.

According to Reuters, hundreds of visitors have flocked to Boston’s Boylston Street in an effort to help local businesses get back on their feet. One tourist chose to eat at a restaurant just feet away from the finish line, while another bought shoes at a store that was affected by the blast.

“The support has been incredible,” said Marathon Sports owner Colin Peddie. His running goods store is located at the bomb site, and, like several shops on the street, was temporarily closed due to minor repairs. Other businesses were impeded by police investigation as well.

Meg Mainzer- Cohen of the Back Bay Association trade group estimated local losses of tens of millions of dollars. She explained that retailers, restaurants and other businesses in the area are hoping to bounce back with help from the increased foot traffic and support from tourists, runners and locals.

“It’s for all the wrong reasons, but for now when someone comes to Boston they’re going to take that walk down Boylston Street,” Peddie said.

 

Yankee Stadium Hosts Goldman Sachs 5th Annual Hedge Fund Symposium

Yankee Stadium was abuzz on Tuesday as some of the hedge fund industry’s biggest leaders made sales pitches at the 5th Annual Hedge Fund Symposium. Hundreds of potential customers, including fund of funds, endowments and pension funds, gathered at the event to hear the propositions of over 50 hedge funds. A source revealed that this year’s popular topics included technology and Japan.

Presenting firms included some of the best-known names in the hedge fund industry, including SAC Capital, JANA Partners, Discovery Capital Management, PEAK6, Highbridge Capital Management, Knighthead Capital and Passport Capital.

An event attendee, who wishes to remain anonymous, stated that many hedge funds consider Japan a good play over the next year or so as a result of additional stimulus.

The source adds that tech is gaining real momentum. Some are even referring to it as “the new darling of Wall Street.” Managers referred to Netflix shares as an example of this.

Commodity Trading Advisors Cut Down Short Bets as Gold Futures Increase

On Monday, gold futures increased to over $1,400 an ounce. This is the third consecutive climb, resulting from physical demand for the metal as big traders reduce their bets on a fall in prices.

In other words, large traders are expecting a rebound following the recent selloff.

Frederic Panizzutti, Senior VP at MKS Group, explained: “Physical traders, on the expectation that gold could possibly correct back higher, rushed into gold. Physical demand continues to be very strong and could push the price higher over the coming days.”

When Comex trading closed on Friday, managed money, including hedge funds and commodity trading advisors, took advantage of the situation by cutting down their ‘short’ bets, according to the Commitments of Traders report.

Copper also fell as Goldman Sachs cut its predictions for the metal.

According to Jan Skoyles of the Real Asset Co., “Physical buying has really taken a lot of people by surprise.” As a result, many bullion dealers are struggling to meet current demand. “This suggests that we are now seeing a bottom in the gold market as bargain hunters rush in.”

 

Ari Glass Launches Boothbay Asset Management Fund

Ari Glass recently unveiled a new multi-manager hedge fund called Boothbay Fund. The fund was launched with $50 million in initial assets and a dozen allocations.

Some of the goals set by Glass for Boothbay Asset Management include increasing the number of allocations to 15 and eventually having 30 managers as part of the platform. For the outside managers, Boothbay will have separately managed accounts.

Ari Glass comes to Boothbay as the president of Platinum from 2007 through 2009. He is also a former executive at Intrepid Capital Management.

Yahoo! CEO Discusses Her Work-From-Home Ban

Marissa Mayer, CEO of Yahoo!, has finally addressed her decision to set a work-from-home ban. The new policy, which was announced in February, will come into effect on June 1st.

The new mother spoke about her decision with numerous HR professionals, explaining that “people are more productive when they’re alone,” but “more collaborative and innovative when they’re together.”

“Some of the best ideas come from pulling two different ideas together,” she said.

In February, Mayer issued a ‘come into the office’ command through an internal email. In it she explained: “We need to be one Yahoo!, and that starts with physically being together.”

“Speed and quality are often sacrificed when we work from home,” she wrote, calling all remote staff to report to office facilities by June.

The new work arrangements will affect around 200 of the 12,000 Yahoo! employees. The announcement sparked much controversy and outrage amongst the company’s employees as well as the public.

Richard Branson, CEO of Virgin, blogged: “This seems a backwards step in an age when remote working is easier and more effective than ever.”

New York Mayor Michael Bloomberg, on the other hand, supports Mayer’s decision.

“Yes, there are some things you can do at home. But having a chat line is not the same thing as standing at the water cooler. And standing at the water cooler is where you get a lot of ideas and information an it’s a euphemism for a lot of interpersonal dialogue,” he said.

 

Wells Fargo Mortgage Business Going “From Great to Good”

On Friday, Wells Fargo & Co. reported a surprising 23% rise in first quarter profit. However, the bank’s mortgage business has showed signs of slowing while net interest margins shrink as well.

Wells Fargo, the fourth-largest U.S. bank, has been considered the leading home lender ever since the financial crises. The bank’s recent decline in home loans may be cause for concern.

“It’s going from great to good,” explained Scott Siefers, an analyst at Sandler O’Neill. “This is a business that is simply tailing off, and it’s going to be very challenging to sustain.”

During the last quarter, Wells Fargo made $109 billion in home loans. Last year, the bank make $129 billion in the same quarter.

Chief Financial Officer Tim Sloan said “Our guess is that mortgage origination levels and revenues will continue to come down.”

He added that the bank has seen an increase in loans taken out by home buyers. He believes this will help offset a decline in refinancing.

U.S. Employment Reaches 4-Year Low

A recent Reuters report reveals that 496,000 Americans stopped pursuing employment opportunities in the month of March, bringing employment rates to a 4+ year low.

Conway G. Gittens reports.

 

Have an Idea? Just Do It!

Nick D’Aloisio, a 17-year-old London schoolboy recently sold his smartphone news app to Yahoo! for $30 million. He advises anyone with a tech idea to just do it, explaining that the money is there, “just waiting for clever new moves.”

“If you have a good idea, or you think there’s a gap in the market, just go out and launch it because there are investors across the world right now looking for companies to invest in,” D’Aloisio said in a phone interview with Reuters.

The app, called Summly, has a long list of backers which includes Yoko Ono and Rupert Murdoch. The sale’s terms have not yet been released, but D’Aloisio is joining Yahoo! as its youngest employee. He is also finishing up his school exams. He shared that he plans to invest his Summly earnings, but that his age presents legal limitations.

“I’m happy with that and working with my parents to go through that whole process,” he said.

D’Aloisio launched his app in November of 2012.

“It’s been super-exciting, the investors found out about it in 2012 once the original investment from Li Ka-shing had gone public,” he said. “They all believed in the idea, but they all offered different experiences to help us out.”

“The great deal about joining Yahoo! is that they have a lot of publishers, they have deals with who we can work with now,” he added.