Recent ArticlesFor decades, investors imagined a time when data-driven traders would dominate financial markets. That day has arrived.
By Gregory Zuckerman and Bradley Hope for The Wall Street Journal
May 21, 2017
Alexey Poyarkov, a former gold-medal winner of the International Mathematical Olympiad for high-school students, spent most of his early career honing algorithms at technology companies such as Microsoft Corp. , where he helped make the Bing search engine smarter at ferreting out pornography.
Executive David Magerman says he had hoped to repair frayed relationship with Mercers
By Gregory Zuckerman for The Wall Street Journal
April 28, 2017
As David Magerman counted down to April 20, a confrontation with Rebekah Mercer wasn’t on his mind.
The Renaissance Technologies Corp. executive was anticipating the annual hedge-fund poker tournament that evening at New York’s St. Regis hotel benefiting Math for America, which supports math and science teachers. The event serves as an annual showdown among investors who rely on computer models and are known as quants, professional poker players and others.
After his apparent suicide, friends say the brilliant, commanding, sometimes abrasive banker suffered from depression—and grew despondent maintaining the charmed life he built for his family
By Gregory Zuckerman, Serena Ng and Leslie Scism for The Wall Street Journal
April 9, 2017
Charles Murphy used to walk home through New York City’s Central Park to his 19-room townhouse for dinner with his family. Last year, he began voicing worries about money to his boss, hedge-fund billionaire John Paulson, who often joined him along the way.
It isn’t too late to learn important lessons from the surprising resurgence of American oil and gas. It is also not too late to profit from it.
The experts keep getting it wrong. And the oddballs keep getting it right.
Over the past five years of business history, two events have shocked and transformed the nation. In 2007 and 2008, the housing market crumbled and the financial system collapsed, causing trillions of dollars of losses. Around the same time, a few little-known wildcatters began pumping meaningful amounts of oil and gas from U.S. shale formations. A country that once was running out of energy now is on track to become the world’s leading producer.
What’s most surprising about both events is how few experts saw them coming—and that a group of unlikely outsiders somehow did. Federal Reserve chairmen Alan Greenspan and Ben Bernanke failed to foresee the financial meltdown. Top banking executives were stunned, and leading investors such as Bill Gross, Jim Chanos and George Soros didn’t fully anticipate the downturn.
March 4, 2014
The U.S. is experiencing a remarkable energy revolution, and exchange-traded funds that focus on energy stocks may seem an obvious way to benefit. But selecting the right ETFs to tap a gusher of profits isn’t as simple as it seems.
U.S. oil and natural-gas production have surged. More than eight million barrels of crude are pumped a day, up from five million barrels a day a few years ago, thanks to newfangled techniques such as horizontal drilling and multistaged hydraulic fracturing in rock once deemed too challenging.
Many analysts and advisers say the U.S. energy renaissance will last for many more years and note that there are few other areas of impressive growth in the economy.
One challenge for investors, though, is that companies discovering huge amounts of oil and gas aren’t always the ones seeing their shares soar. Natural-gas prices collapsed in recent years, thanks to a glut resulting from improved production methods. And while “the industry is undergoing a revolution,” says John Gabriel, an analyst at fund tracker Morningstar Inc., “that doesn’t mean that all firms will make the right capital-allocation decisions and succeed.”
An added complication is that ETFs tend to track groups of companies or indexes. That provides helpful diversification but it also makes it challenging for those searching for a “pure bet” on a particular theme, such as the rise of “unconventional” drilling, the kind responsible for the U.S. energy resurgence.
Some advisers recommend SPDR S&P Oil & Gas Exploration & Production,partly because this ETF includes some midsize energy producers, like SandRidge Energy Inc., the kinds of companies responsible for the biggest leaps in U.S. production. But this ETF includes companies that don’t focus on unconventional drilling.
A more concentrated bet is Market Vectors Unconventional with the fitting symbol of FRAK. This fund invests in companies that employ hydraulic fracturing—or fracking—to unlock oil and gas from shale formations. Shale is a type of rock packed with oil and gas but until recently considered too difficult to drill. Among the fund’s recent holdings are EOG Resources Inc. and Pioneer Natural Resources Co., among the big winners from Texas’ booming Permian Basin.
The fund has about $50 million in assets and sees under 50,000 shares traded some days. Companies in the fund must have the potential to generate at least 50% of revenue from unconventional oil and gas, but that still means an investor is exposed to traditional drilling.
Companies in the ETF generate earnings “from sources other than just fracking and shale,” says Scott Miller Jr. a managing partner of Blue Bell Private Wealth Management LLC in Blue Bell, Pa. But “I would still advise investors who really want to invest in fracking and shale companies to buy FRAK over individual stocks as they would be buying a portfolio of the dominant players in the space,” he says. (His firm isn’t using the fund because its clients haven’t asked for this focused exposure.)
Direction Unclear
Though natural-gas prices have jumped lately, amid a frigid winter for much of the country, it isn’t clear where they’ll be going from here or how leading gas producers will fare. Ryan Issakainen, ETF strategist at ETF sponsor First Trust Advisors LP, says fundamentals look good for natural gas over the long term. More electricity is coming from gas, rather than coal, and manufacturers are moving to the U.S. to take advantage of natural-gas prices that remain lower than those around the world. As the U.S. begins exporting natural gas that also will help push prices higher. His firm’s First Trust ISE-Revere Natural Gas Index is among the ETFs that aim to track an index of companies involved in natural-gas exploration and production.
The Market Vectors Oil Services is recommended by some advisers as a safer wager on companies providing services to oil and gas producers. The service business can be more stable than searching for oil and gas. This ETF tracks the performance of 25 of the largest U.S.-listed, publicly traded oil-services companies. But these companies, such as Schlumberger Ltd and Halliburton Co., do conventional and unconventional drilling, a reminder that it’s hard to find a perfect way to play the U.S. energy revolution.
Shipping It
Matthew Tuttle, president of Tuttle Tactical Management LLC in Stamford, Conn., favors iShares Global Infrastructure, which tracks 75 companies that profit from building the infrastructure necessary for energy to be shipped, such as Enbridge Inc. ENB -0.89% But the ETF includes companies active abroad and non-energy companies, such as toll-road operators.
Darren Schuringa, managing partner at Yorkville Capital Management LLC, notes recent estimates that as much as $900 billion in new infrastructure investments will be required to transport this new production in the years ahead. His firm’s Yorkville High Income Infrastructure MLP ETF invests in master limited partnerships, or MLPs, which are companies that own and operate pipelines, primarily for natural gas and oil. This fund has less than $40 million in assets, but has an annualized yield of 6.3%.
Marc Andreessen Is Betting on Wide Adoption of Digital Currency Bitcoin
March 21, 2014
Internet pioneer Marc Andreessen is doubling down on bitcoin amid turbulence in the virtual-currency world, in a bet that widespread adoption of the currency will fuel the growth of new businesses and technologies.
Venture-capital firm Andreessen Horowitz, where Mr. Andreessen is a co-founder and partner, has made about $50 million of investments in the area—believed to be more than any other firm—from a $1.5 billion fund, the firm says. The Palo Alto, Calif., firm plans to invest hundreds of millions of additional dollars over the next few years from other funds, people familiar with the firm say.
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Feb. 24, 2014
NEWPORT BEACH, Calif.—Tension increased at Pacific Investment Management Co.’s headquarters here last summer. The bond market was under pressure, losses grew and clients pulled billions of dollars from the firm.
Bill Gross, who co-founded Pimco in 1971 and is largely responsible for building it into a behemoth overseeing almost $2 trillion in assets, struck some of his colleagues as testier than usual. He argued openly with Mohamed El-Erian, Pimco’s chief executive—something employees say they rarely had seen.
Q: Are there ways to protect a portfolio from a bear market in bonds?
A: There’s growing concern in bond land. The stock market is firming, some investors are shifting cash from bonds to equities, and interest rates, still near all-time lows, likely will move higher over the next few years if the economy keeps improving, analysts say. That would push bond prices, which move in the opposite direction of rates, lower.
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By GREGORY ZUCKERMAN
The market is surmounting a wall of worries to approach all-time highs. The best news: There are reasons to think the good times will continue.
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