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Bloomberg Markets Magazine

Bloomberg Markets Magazine June/July 2019

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Bloomberg Finance LP
Back issues only

in this issue

1 min
the contrarians issue

In the markets, the true legends are always the contrarians. They’re willing to challenge the status quo. They’re never certain they’ll succeed—many contrarians don’t. In this issue, Bloomberg Markets examines some of the people and organizations taking new, difficult, controversial, or unpopular positions. Mekong Capital Ltd.’s founder, Chris Freund, took an unusual path when he started a private equity firm in Ho Chi Minh City, Vietnam. But as Tom Redmond and Giang Nguyen explain in “The Convert” (page 52), Freund’s management approach is what really sets Mekong apart. From its base in Los Angeles, Capital Group Cos. is resisting the trend toward low-fee passive investing. “Staying Active” (page 58), by John Gittelsohn, tells the story of the mutual fund giant’s efforts to preserve a three-generation tradition of research-driven stock-picking. Ben Axler is…

1 min
markets almanac

Jun 6–8 For an economic snapshot, type {ECST RU <GO>}. To monitor Russian financial markets, go to {OTC RU <GO>}. St. Petersburg International Economic Forum St. Petersburg Russian President Vladimir Putin hosts business leaders 17–19 ECB Forum on Central Banking Sintra, Portugal This year’s conference marks 20 years of economic and monetary union 20–23 To start a search of Asean fixed-income securities: {SRCH @ASEAN <GO>}. Try typing {BI ASEAN <GO>} for a Bloomberg Intelligence dashboard. Asean Summit Thailand The 34th meeting of leaders from the Association of Southeast Asian Nations 23–29 Aspen Ideas Festival Aspen, Colo. Gathering hosted by the Aspen Institute and the Atlantic magazine Jul 7 World Chess Federation’s amateur championship Manzanillo, Mexico Last day of the annual weeklong tournament 8–12 Type {FTW <GO>} to view factors sorted by quantile spreads and pure factor returns. Type {N QUANT <GO>} for news about quantitative science. International Conference on Computational Finance Coruña, Spain 14 Cricket World Cup Final Lord’s Cricket…

5 min
how do you bet against crowded trades?

NIGOL KOULAJIAN, founder of New York-based Quest Partners, has beaten rival hedge fund managers over two decades by refusing to follow them into crowded trades. Since the financial crisis, commodity-trading advisers (CTAs), which specialize in trading futures or options, have piled into long-term bullish bets, riding the market up in search of steady gains. That’s left them vulnerable to big losses when volatility strikes—the very moments when Koulajian’s $1.35 billion quant firm cleans up. His AlphaQuest flagship fund has posted an annualized gain of 9.7 percent since its inception in 1999, almost three times that of the BarclayHedge BTOP 50 managed futures index and nearly 4 percentage points more than the S&P 500, according to a document seen by Bloomberg. Here Koulajian, who turns 52 in June, talks about style…

8 min
el petro, or what we can learn from venezuela’s doomed crypto-petrocurrency

SHAKESPEARE tells us, “Misery acquaints a man with strange bedfellows.” Venezuela’s 20-year slide from peaceful, prosperous democracy to violent, impoverished dictatorship has caused misery on a vast scale. And it brought together the protagonists in the story of el petro—a mashup of fringe economists and cypherpunks, socialists and libertarians, real-asset fundamentalists and next-generation financial engineers, the “Dutch disease” and exorbitant privilege. Their experiment ended in failure, but their ideas deserve exposure. Consider the French Revolution in 1789. Its political accomplishments were short-lived: a century alternating among monarchy, republic, and empire. But the metric system it introduced spread throughout the world and persists today. When revolutionaries took over France, they looked to the cahiers de doléances, lists of grievances. Among the most common demands was one for standard weights and measures. Peasants hated…

1 min
fresh approach

SUMMERTIME MEANS strawberries in many parts of the Northern Hemisphere. Strawberry festivals abound throughout the U.S. and Canada. At Wimbledon, the prestigious tennis tournament on the outskirts of London, strawberries and cream are a courtside tradition. The berries are red; the cream is white. In Japan, where peak season ends in April, things are different. White strawberries are particularly prized. Sold in high-end department-store food halls and packaged like jewelry (and often purchased as gifts), the white berries can cost more than 1,000 yen ($9) apiece. (The one shown here, from Teshima Farm in Saga prefecture, cost 720 yen.) Although they taste similar to red berries, they have advantages: They stain less and attract fewer birds, and the plants resist some diseases. Perhaps just as important, they challenge your assumptions. To find…

7 min
for meridiam’s thierry déau, assets mean airports and tunnels

THIERRY DEAU’S ENGINEERING training in France led him early in his career to building government-funded infrastructure. But it was his entrepreneur father back home in Martinique who inspired him to strike out on his own in 2005. He started Paris-based Meridiam to finance, build, and manage long-term projects. Now, with €7 billion ($7.83 billion) in seven funds and nine offices across Europe, the Middle East, Africa, and North America, Meridiam is playing a key role in high-profile projects such as the upgrade of New York’s LaGuardia Airport and a road tunnel under the Port of Miami. Déau describes Meridiam’s investment approach in an interview with Bloomberg Markets. SREE BHAKTAVATSALAM: What led you to start Meridiam? THIERRY DEAU: First of all, I am an engineer. I still don’t define myself as a financier.…