HODGE-PODGE FUNDS A HIT WITH THE HOITY-TOITY

The Author came upon a very interesting link to an article on Calculated Risk, a finance and economics blog. The article, “Bored with hedge funds? More investors turning to 'exotic assets”, appears in the International Herald-Tribune Business Section.

The article describes these “Hodge-Podge” funds (Calculated Risk’s appellation, not the Author’s):

As investors range far afield in search of places to put their money, hedge funds have expanded investments beyond stocks and bonds into art, wine, rare stamps and even soccer players. Money managers have begun to look at these so-called exotic assets as way to diversify risk while searching for assets that may provide a cushion if the five-year market boom comes to an end. Critics, however, call them too risky and opaque.

HODGE-PODGE FUNDS RELY UPON THE SLOSHING CASH OF THE NOUVEAU RICHE UNSOPHISTICATES?

The funds have begun to rely on the record year-end bonuses found on Wall Street and the inflow of new wealth from developing countries like China and Russia to drive up demand and the prices of luxury items like wine, watches and violins. The expectation is that demand would continue even if the economy moves into a recession.

"There's a new wealth that will not go away and that means for luxury cars, watches and wine, there will always be demand," said Stephen Decani, a partner at Arch Financial Products, a firm in London that runs a fund investing in Bordeaux wines, which are among the most expensive and exclusive.

Michael Hall, the chief executive of the Stanley Gibbons Group, a coin, stamp and autograph collecting company that offers investment funds, considers his funds "a safe haven for cash." (AUTHOR’S note to Mr. Hall and the reality-based community. Cash is the safest haven for “cash”.)

WILL IT WORK IN NASCAR, “PRECIOUS MOMENTS” AND THOMAS KINCAIDE AMERICA?

The Author will leave the wisdom of such illiquid and opaque investments to the readers and to the “snooty” Europeans that operate such funds. The Author believes that such effete and pretentious tastes would never sell in America. Americans are more worldly and practical. Hedge funds investing in collector plates from the Franklin Mint, antique Harley-Davidsons*, and Al Unser, Jr. Jim Beam bottles run closer to the American aesthetic.

IF IT PLAYS IN PEORIA, COULD IT BE A WINNER IN BRANSON!

The Author will leave it to more culturally attuned Americans to consider the potential demand and profitability of such American-oriented collectable hedge funds. But he would be available for advising and consulting engagements. Past performance is no guarantee of future success.

*The term “antique” Harley-Davidson is probably an oxymoron, but the Author digresses.

GREATER THINGS ALMOST ANYBODY CAN DO IN THE DESERT OF THE REAL!