September 19, 2012
Attain Capital
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In a world of cold metrics and glossy brochures, there’s something reassuring about hearing it from the horse’s mouth. There’s nothing like seeing a manager laying out their approach and sentiment toward the markets to get a sense of what kind of trader they are. That’s why we love to see messages like the one we received from Atlantic Capital Advisors principal and managing director Andrew Taylor. With keen insight on QE3 and what comes next, we thought we’d share some of his musings:
This has been a very nice run for us recently, which warrants some thoughts given the current environment. After having gone through a flat period trading last year, where central bank monetary easing and political stimulus kept asset prices inflated in an economic environment where deflation would have occurred naturally. So much of what we do is look for divergences and potential moves from one equilibrium point to another, regardless of underlying rationale whether they are micro or macro in nature. The new paradigm for me has been the increased importance of macro factors that can overwhelm the micro, and is somewhat reminiscent of early 2005 and the influx of capital into commodities via index funds. Most commodity traders are not used to a rising tide lifting all ships. With inflated prices, excess liquidity and bearish outlooks, we see declining volumes, reduced participation and increase in the breadth of limited yields to markets other than fixed income. The trend of market manipulation is firmly in place and I don’t ever remember a time of so much price (mis) management, the result of which has been to essentially force the market to under price risk, as traders are forced to ignore the dark side of binary risk.
Now we have a situation of political impotence (and an incredible disregard of the fiscal cliff) creating a vacuum that the Fed appears to be desperately trying to fill. To a hammer everything looks like a nail, so even though the QE process is having less marginal impact, we get more QE. Even though we had a buoyant stock market and the effect of monetary easing on unemployment is questionable, I wonder about QE3 (or QE5 for those who include LTRO and Twist). In addition, excess reserves at the Fed are approaching $1.5 trillion and now we have ongoing Fed balance sheet expansion with transfer of MBS, so the likely motivation of the Fed in my mind is more focused on TBTF bank balance sheets and that’s not a pleasant thought. […]
At Atlantic we tend to trade volatility/risk from the long side, so central bank “enforced” price stability is not necessarily a good thing. However, I see increased probability of price instability going forward, as ultimately the market will do what it needs to do to adjust commodity supply/demand. So we will likely see significant price moves (aka pops, explosions, crashes and convulsions), as excess capital sloshes around the monetary system (who knows how much will find its way to Main Street). This should be supportive of returns in an environment where the hunt for yield is desperate enough to underestimate risk in other assets. […]
To borrow a phrase from a terrific old TV show, “let’s be careful out there…”
Thanks and regards,
Andy Taylor
Atlantic Capital Advisors LLC
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.