Has Blackrock Absolute Alpha lost it's shine?

[Deleted User]

I am recovering from a nasty virus I have had for a few weeks and so a bit groggy and irritable. All the bad advice I read on here yesterday wound me up a bit 3 pages moaning about a fund going down 2% in a bear market made me crack lol. It wouldnt surprise me if a few of the posts I had read were from hedge fund stooges esp on the threads with people arguing on the rights issue threads that all banks are going to be worthless and they shouldnt take up their rights. With 3 banks now trading above the RI prices and B+B just breaking into profit albeit with a lot of volatitity it shows how bad this advice is. It is true that a bank may go under but we can not predict this easily and we must balance the risk/reward appropriatly.

Sorry if I have come across a bit too preachy just my nature I guess

Jonbvn

Yant1 wrote: »

Sorry if I have come across a bit too preachy just my nature I guess

Sounds like an apology, which is good enuf for me!:money:

wombat42_2

Cazenove UK Absolute Target is the new kid on the block:
http://www.h-l.co.uk/fund_research/security_details/sedol/B39VWX1.hl

Mr_Mumble

BlackRock's Lyttleton falters in July but remains confident

earlgrey_3

Yant1 wrote: »

BTW B+B is trading above the RI price so my advice has made some people a lot of money already!!!!!

Err really? Are you kidding or taking something seriously too strong? :rolleyes:

Did no one tell you that for the first attempted rights issue by B&B that you said on 15 May should "most definatly" be taken up the issue price was 82p see http://www.londonstockexchange.com/LSECWS/IFSPages/MarketNewsPopup.aspx?id=1840166&source=RNS and the share price was around 160p, it's currently at 56.5p.

14 May 2008 "The Board of Bradford & Bingley plc ("Bradford & Bingley", "the Company" or "the Group") announces a rights issue to raise approximately £300 million, net of expenses, in a 16 for 25 rights issue at an issue price of 82 pence per Bradford & Bingley share. This represents a 36% discount to the theoretical ex-rights price and a 48% discount to the closing price of Bradford & Bingley shares of 158.75 pence per share on 13 May 2008, the last trading day before this announcement. "

Your post saying that shareholders should definitely take up the 82p rights was on 15 May. Because you were the only one on the planet who thought the issue was good value the proposal was then withdrawn. B&B came back with a new rights proposal at 55p with the deadline of 8 August.

B&B closed on Friday at 56.5p, i.e. around one third of the price when you advised buying the rights at the original price in May and at one point could have been bought for just 34p.

Didn't you know that?

Yant1 wrote: »

Come back in 5 years and if the performance of those two stocks havent beaten the absolute alpha fund then you can be a smarty pants but for now you are basically arguing a long-short fund can produce absolute returns over long only funds.

Sorry, I'm not going to reply to your wacky ideas one by one (or even read them) but no one here is suggesting any such thing. An absolute return fund is intended to out-perform in a falling market but is expected to under-perform in a strongly rising market. A fund using shorts can be either riskier or safer than a long only fund depending on whether they are used to increase or decrease exposure. It's not which instruments are used that matters but how and why they're used.

I certainly wasn't complaining about a fall. I pointed out that in falling consistently since the beginning of this month the fund was doing what it had never done before in its history. The question was why. This fund should not simply be compared with other totally different funds, if at all, but more importantly with its own previous characteristics. By halving my investment when I did I now have the option of buying back in at a lower price or watching for a little longer, as does the other poster who sold units, and that is an option that you don't have unless you did the same.

It's against the rules of this board to tip shares for a very good reason. When they come from a totally clueless fantasist they can be very dangerous. I hope your cold is better soon.

[Deleted User]

The RI was repriced after a period of excessive naked shorting to force it to fail. Investors taking up the rights will get the repriced price. If you can get it from the market cheaper due to the naked shorting and order book manipulation then fair play the underwriters will simply hold the stock until the vampires have moved elsewhere the stock gets priced more on its adjusted price to earnings ratio and then sell it back to pension funds at full price. Everybodys happy, except those that got conned out of stock and advised to firesell.

joeatiyah

OK Ive just joined the site to make the following observation
(I do hold some Black Rock Alpha, which is why I am looking)

It seems to me that both earlgrey (nice tea BTW) and Yant1 know a fair bit about investing, and both have some interesting things to say.

So would you both please stop slagging each other off and restrict yourselves to the informative comments of which you are both capable.

Have a nice day.

joeatiyah

OK, after that slightly sanctimonious post, here are some thoughts after reading MLs comments on recent performance.

He thinks oil price is to remain high for 'several years'. Well, yes but...

In the 70s the oil hike had a big effect on consumer behaviour which led to the eventual fall of oil price (in real terms). Now the situation is a bit different this time (isnt it always) with the massive growth of consumer and middle classes in China and India (amongst other things).

But still there has been a massive hike in oil (remember when OPEC said $25 would be a sensible long term price - only relatively recently) which is already having an effect in the US - people cutting their mileage, Ford taking a big hit on SUV sales and rushing out small models. And (listen to Science Friday podcast) big efforts on energy saving from the Tesla (OK, small impact but interesting high performance electric car) to the (stalled but ongoing) worlds largest solar energy power plant in Arizona.

Now this isnt going to cut oil price drastically just yet (tho it has taken a bit of a tumble), and it will be volatile for a long period, and may yet go to new highs. But I would be surprised if it doesnt show a significant decline starting say in 1-2 years. Or maybe a bit longer.

Of course I could be wrong.. If I knew what was going to happen Id be a rich as Buffet (well, no I wouldnt cos Im too lazy). These are just some thoughts which indicate that Im not entirely confident of MLs judgement.

But Ill continue to hold and watch with interest, but maybe not increase my holding (which I was considering). Personally, I think bonds are a good bet at present, as is the market in general -oversold, and very likely to be 10%+ higher within 1-2 years.

meester

All is explained in this Times article:

http://www.timesonline.co.uk/tol/money/investment/article4448431.ece?token=null&offset=0&page=1

In essence they are short consumer cyclicals, housebuilders and banks and those stocks did well last month, hence Blackrock didn't.

Bottom line is, there are no guarantees of 'absolute return' with any fund, Blackrock has looked good for 15 months, and hence attracted hundreds of millions of pounds in investment, but who knows what the next 15 will bring.....

They also mention the other few performing funds at the end, including, amusingly, the notorious Manek Growth.