There’s a good article at Bloomberg on Hedge Funds, and how Goldman is now the largest hedge fund manager out there.

One interesting quotes from the Bloomberg article… one fund “targets a return of 5 percentage points more than T-bill rates. In 2003, that figure was 6 percent. On Nov. 8, with T-bills yielding 5.1 percent, it was more than 10 percent.” Wait a minute, your investors were paying you 20% of the profits to earn a 6% return?

Pfizer is stopping development of their cholesterol drug torcetrapib. Expect to see some volatility in the indexes on Monday if PFE plunges as it is a member of the Dow, S&P 500, and S&P 100 (OEX). And with a market cap of $200b, it is (or was) the 5th largest component of the Dow.

The sale of EOP to private equity by Sam Zell may signal we’re near a top in REITs… Zell has a reputation as one of the smartest investors out there… From Dennis Gartman’s eponymous letter (quoted from a second party):

We said last week that from two or three years hence, the private equity “boys” will wonder how it was that they allowed themselves to be so thoroughly and completely taken by Sam Zell who sold them his REIT at a price they themselves inflated.

Zell’s shareholders will look back and say that few corporate managers had secured such value for their shareholders as had he; the buyers, on the other hand, proved to be the weak hands that Zell’s strong hands sold into.

A while back I owned shares of JOF, the Japan Small Cap Fund. I’ve since sold my shares of JOF and moved on to prefer and own EWJ instead… but for some reason I keep getting proxy vote requests from JOF — including an overnight DHL package and phone calls asking me to vote! Yet another reminder why corporate actions are expensive (even for a closed-end fund).

WSJ’s newly free blog states that there is chatter that another hedge fund may be on the brink of failing and that it may be responsible for some of the gyrations in the energy, bond, and currencies…

Before the election, many people thought there was a plausible conspiracy to keep the gas price down and help the republicans get re-elected. Unfortunately, crude oil keeps going down. Maybe it is just the futures contracts expiring? If so, this is a time to be a buyer…

The NYMEX IPO’ed this week to much fanfare and excessive jubilation. Come on people, NYMEX is worth $12 billion? Seems like everyone likes the exchanges — it’s the 7th exchange to go public in the US and every one of them has posted ridiculous gains since their IPOs.

Let’s all make fun of Jim Cramer together. Oh, let’s make fun of Donald Rumsfeld too while we’re at it…

P/E compression takes a long time.

The bearish case: Dr. Copper predicts a recession. The bullish case: I’ll let it speak for itself.

Take comfort in the fact that you’re rich — even if you make minimum wage. “Fed Min Wage= $5.15/hr. At 40 hrs/week, 52 weeks per year, our worst case scenario is still in the top 13th percentile of the world.”

Want to buy a supercomputer? Try the PS3. Just don’t send your personal assistant and let them name-drop… To sum up… Sony (SNE) creates batteries that burst into flames, and now sells an $800 gaming console for $500.

This quote is from Bill Cara’s blog on the effects of the re-balancing of the Dow Jones AIG commodities index in January of 2007:

On this assumption there will be heavy buying of Nat gas, coffee and crude and large selling of nickel zinc, wheat and copper. Substantial selling is likely in nickel and zinc; less selling in copper and aluminum. We suspect these changes will occur during the January roll-period.

There are other salient points in the post, specifically that no one can predict how much an effect this re-balancing will have as there’s no easy way to tell how much money is being invested based on the index.

I find it very interesting that this phenomenon is occurring, and I’m sure some nimble traders are trying to capitalize on this special situation…

Mish talks with Mike Morgan about real estate from the front lines in Florida. Holy shit, after reading that I’m scared. Not too scared, mind you, our local real estate never got so frothy or very divorced from natural supply and demand (our population is still growing).

John Hussman writes that his strategic fund is also going long in a risk-controlled way. Hussman tends to lead the pack, so I see this as the beginning of sentiment shifting back to bullish… To be sure, he and I both believe we’re playing a game of the “greater fool” or at least the “slower fool”.

Mauldin’s weekly email mentioned some flow of funds information from TrimTabs Investment Research…

Money is pouring into US mutual funds. Last month saw $2.2 billion, the second highest month of inflows this year. And so far this month, we have seen $2.6 billion, says Trimtabs. Since gold disappointed, investors started to bail last month. They took out $214 million last month in mutual funds that invest in gold and precious metals, as opposed to the previous six months which saw an average of $129 million in additions.

TrimTabs offer a free month’s subscription to their research… I will report back on how useful I find it. (Incidentally, “trim tab” is a sailing term.)

Chart of the Day did a recent chart on the Dow priced in Gold terms. I’ve posted about their relative performance before.

The Big Picture looks at the Dow Reaching a new high (great graphic from NYT), and how small our Defense Budget is compared to historical levels during other, more traditional wars.

Not a big surprise (to me at least), but mutual funds are making more off fees than they are returning to investors in returns.  “The Russell 3000 Investment Management Company Index has gained 15.6% a year over the past five years, outrunning the average stock-fund’s annual return of 10.4%.”

Footnoted.org may have found patient-zero in the options backdating epidemic.

Off topic, but still relevant, Econobrowser points to a map of the expected outcome of the US Senate races…  from gambling website TradeSport’s online data…  in case Electoral-Vote.com wasn’t accurate enough for you.