CME struggles with global expansion as traders fight change
Lynne Marek – Crain’s Chicago Business
CME Group Inc. is stuck between its past and future, dragged back by industry traditionalists as it struggles to expand a global electronic futures exchange. CME is the world’s largest futures exchange. Yet management efforts to evolve beyond its Chicago trading roots and appeal to new customers often trigger a backlash from longtime shareholders and traders whose livelihoods are threatened by changes at the 166-year-old institution.
***** Don’t pay any attention to the noise of the lawsuit against the CME. The noise is always there.
AlphaMetrix denies CFTC’s fraud allegations, in federal court filing
Lynne Marek – Crain’s Chicago Business
AlphaMetrix Group LLC in a court filing denies wrongdoing in a case brought against it by the Commodity Futures Trading Commission and blames the regulators for short-circuiting its plan to pay customers $2.8 million in rebates they’re owed.
***** Blaming the regulators can only be followed by blaming the press.
US regulators ‘funded at a level to fail’
Joe Morris – FT.com
Even with new budget increases, US securities regulators are falling further behind the market when it comes to technology investment, and the investment advisers and swaps dealers they oversee are likely to remain largely uninspected.
***** so Joe Morris must think the regulators had previously succeeded?
|Derivatives trade reporting comes to Europe
The Depository Trust & Clearing Corporation (DTCC) has been at the forefront of the development of trade repositories, building global capabilities across the spectrum of asset classes. Today, our Global Trade Repository (GTR) operates, through locally-licensed DTCC subsidiaries, in three continents enabling users to meet their local regulatory reporting obligations in an open and cost effective manner. 45 regulators around the world use DTCC’s GTR as a tool to monitor the build-up of systemic risk in a timely and accurate manner.
Our European repository was approved by ESMA to collect data from entities with a reporting obligation in Europe on 7 November 2013, paving the way for the mandatory reporting of derivatives contracts beginning on 12 February 2014.
Timing is of the essence
When choosing which derivatives repository to report to, firms need to understand the business models of each, ensure their trade repository has knowledge of the local regulatory requirements and experience dealing with regulators. It is important to consider the economies of scale, the cost structure and the flexibility and choice of reporting and connectivity options available.
Our European repository provides a flexible and open platform supporting direct and delegated reporting. For further information about our services please contact: GTR-EMEA@dtcc.com or + 44 207 650 1545
Bats Said Poised to Escape SEC Fine for Botched March 2012 IPO
Sam Mamudi and Joshua Gallu – Bloomberg
U.S. regulators will recommend against fining Bats Global Markets Inc. for a computer error that prevented the exchange owner from completing its March 2012 initial public offering, according to three people familiar with the matter.
***** I believe they would agree they have been punished enough.
CBOE to extend US Vix trading to Asia hours
Aaron Woolner – Risk.net
The Chicago Board Options Exchange is planning to capitalise on Asian demand for volatility instruments by expanding the trading hours of its Vix index, representing the implied volatility of the S&P 500 index options, to meet the business hours of firms trading in the region’s time zones.
***** CBOE is working on a new time vortex to allow Vix to trade 26 hours a day.
Open for Business: SEFs Navigate the New Regulatory Environment
Swap execution facilities (SEFs) were given life by the Dodd-Frank Act, which requires over-the counter (OTC) swaps to be cleared and traded on this new type of regulated platform. The CFTC published its final SEF rules in mid-2013 and trading commenced on 18 registered SEFs. John Lothian News interviewed a dozen of the leading SEF operators, regulators and other participants and put together a three part series on SEF regulation, the changing market structure and the new technology required to make it all happen. Part I looks at the state of SEF regulation. Though the final rules are out, the industry is still working on a few lingering issues such as new staff guidance and no-action letters on certain aspects of the rules. Also, as the CFTC begins making classes of swaps “available to trade” and subjecting them to mandatory execution on SEFs, the industry is expected to quickly adjust and comply.
Upstart Berkshire Hathaway Managers Beat Buffett’s Performance
The pupils are beating the master at Warren Buffett-led Berkshire Hathaway Inc. Two investment managers, hired by the 83-year-old billionaire in recent years as part of his succession plan, each posted returns last year that outdid both Mr. Buffett’s performance as Berkshire’s top stock picker and the Standard & Poor’s 500-stock index, according to people familiar with the matter.
***** Sure, but can they play the ukulele?
Former Treasury Chief Sees Accounting in the Price of Emission
Eric Roston – Bloomberg
How’s climate change a risk to me? This simple question has gone unanswered for too long.
***** This is a big story worth your read.
’Wolf of Wall Street’ Offspring Never Quite Die
Jonathan Weil – Bloomberg
Finra won’t release its complete database to the public. Why not? Finra won’t explain its reasons. But I can guess.
***** Methinks the “Wolf of Wall Street” is going to be bad for FINRA.
30th Annual RMC: Expert Speakers on March 17 – 19 in Florida
The agenda for the Thirtieth Annual CBOE Risk Management Conference (RMC) now is available at http://www.cboermc.com/agenda/ RMC is the premiere financial industry conference designed for institutional users of listed options and volatility products. The 30th Annual CBOE RMC will be held March 17 – 19 at the Hyatt Regency Coconut Point in Bonita Springs, Florida. We recommend that you make your reservations as soon as possible, as rooms tend to sell out quickly.
***** I will be there, managing my risk from Florida.
MarketsWiki Page of the Day
Aequitas Innovations Inc.
MarketsWiki Recent Updates
Companies, Organizations and Groups
46,628,200 pages viewed, 7,768 articles, 176,817 edits
Metals, Currency Rigging Is Worse Than Libor, Bafin Says
Karin Matussek and Oliver Suess – Bloomberg
Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion.
***** This story never makes the case for how the metals markets are being manipulated. It does say a lot of metals trading takes place off of exchange and trading platforms, which makes it hard to monitor. So isn’t that what Emir and Dodd-Frank are all about? The is kind of a schlocky story from Bloomberg, which is disappointing.
Mifid show moves to Paris after breakthrough agreement
Philip Stafford – FT.com
After the euphoria of the EU’s Markets in Financial Instruments Directive (Mifid) deal in Strasbourg, the march on Paris has begun. Finalisation of a political agreement by European policy makers late on Tuesday on the review of Mifid, the region’s main markets legislation, was greeted with relief.
‘Don’t hollow out financial transactions tax’, says EU tax chief
The European Union’s top tax official has called on member countries not to dilute proposals for a financial transactions tax in the euro zone, suggesting the bloc could instead implement the plan more gradually.
World Federation of Exchanges Moves to London
Jake Thomases – WatersTechnology
The World Federation of Exchanges (WFE), the trade association of 62 publicly regulated stock, futures and options exchanges, has moved its headquarters from Paris to London.
Budget Woes Leave Swaps Agency Outgunned by Wall Street
Robert Schmidt and Silla Brush – Bloomberg
When President Barack Obama gave federal workers a 1 percent pay raise at the start of the year, employees at the U.S. Commodity Futures Trading Commission assumed they’d get the boost. They didn’t.
CFTC Approves Application of BSDR LLC for Provisional Registration as a Swap Data Repository
The U.S. Commodity Futures Trading Commission (CFTC or Commission) today approved the application of BSDR LLC (BSDR) for provisional registration as a swap data repository (SDR) pursuant to section 21 of the Commodity Exchange Act and section 49.3(b) of the Commission’s regulations.
Davos: Increased Cyber Security Can Save Global Economy Trillions
Failing to improve cyber security could cost the world economy and lead to more frequent cyberattacks, according to a new report released today by the World Economic Forum in collaboration with McKinsey & Company.
Brokers unite to tackle caps on dark pool trading
Anish Puaar – Financial News
Brokers in Europe are teaming up to devise ways of managing restrictions on dark pool trading included in comprehensive securities market reforms agreed by EU regulators last week.
UBS to outsource fixed income trading platform
Daniel Schäfer in London – FT.com
UBS has struck two deals to outsource most of its fixed income trading platform in a radical step highlighting the scale of cost pressures in the investment banking sector.
Reports of FICC’s demise have been somewhat exaggerated
Ben Wright – Financial News
Of all the question marks hanging over banks at the moment the largest and most precarious one appears to be dangling above their fixed income, currencies and commodities businesses. Rare is the banker unready to rend his clothes, gnash his teeth and bemoan the demise of FICC. But while there is little doubt these units face some pretty hefty challenges, might the pessimism be somewhat overdone and – dare one suggest it – a touch self-serving?
Investor Animal Spirits Spread to Companies Worldwide
Simon Kennedy and Rich Miller – Bloomberg
As executives gather in Davos, Switzerland, this week for the World Economic Forum’s annual meeting, business confidence is rising, with a weekly gauge compiled by Moody’s Analytics Inc. at its highest level since the survey began in 2003.
Forget Manipulation. Is Is Even Frontrunning?
Emails from two readers raise some interesting points about the alleged front-running of Fannie and Freddie by swap dealers. And that’s one of the points. Swap dealers. These were principal-to-principal transactions: the dealers were the principals to the trades. Front running traditionally involves violation of an agency relationship. A broker that has a fiduciary relationship with a customer who trades ahead of that customer’s order is front running. The dealers have no fiduciary duty to their counterparties, as far as I know.
Bitcoin Judged Commodity in Finland After Failing Money Test
Kati Pohjanpalo – Bloomberg
Bitcoin doesn’t meet the definition of a currency or even an electronic payment form in Finland, where the central bank has instead decided to categorize the software as a commodity.
NY AG Names Gary Fishman to Head Newly Formed Financial Crimes Bureaus
Everdeen Mason – MoneyBeat – WSJ
New York Attorney General Eric T. Schneiderman named Gary Fishman, a veteran financial crimes prosecutor, as chief of the newly formed Criminal Enforcement and Financial Crimes Bureau, which will focus on prosecuting complex and large-scale financial crimes.
CFTC Reopens Comment Period for Concept Release on Risk Controls and System Safeguards for Automated Trading Environments
The U.S. Commodity Futures Trading Commission (Commission) announced today that it will reopen the comment period for its Concept Release on Risk Controls and System Safeguards for Automated Trading Environments (Concept Release).
CFTC Announces Start of Regularly Scheduled Staff Calls on OCR Implementation
The U.S. Commodity Futures Trading Commission (Commission) announced today that Commission staff will begin hosting telephone conference calls with reporting parties regarding technical implementation of the new ownership and control rules and related forms published in the Federal Register on November 18, 2013 (the OCR Final Rule).
UK set for landmark court ruling on Esma powers
Anish Puaar – Financial News
The top European securities regulator could be stripped of powers to restrict short selling in a landmark verdict that is due to be delivered by the European Court of Justice this Wednesday.
British Bankers’ Association ventures to Brussels
Vivek Ahuja – Financial News
The British Bankers’ Association will this week open an office in Brussels, its first outside the UK, as the trade body for the UK’s banking industry establishes an on-the-ground presence in Europe’s regulation capital.
EU OKs MiFID 2; ESMA Wades into Details
Giulia Lasagni – WatersTechnology
After more than three years of negotiations, the European Union last week struck a long-awaited agreement on its review of the Markets in Financial Instruments Directive that mandates trading venues to make pre- and post- trade data available on a “reasonable commercial basis” and prescribes the creation of a European consolidated tape of post-trade data. The regulation also sets limits on dark pool trading and introduces new multilateral trading venues, dubbed Organized Trading Facilities (OTFs), for non-equity instruments.
UK and EC clash over forex reporting exemption
Fiona Maxwell – Risk.net
With less than a month to go before mandatory reporting of swaps trades in Europe begins, the European Commission (EC) and the UK Financial Conduct Authority (FCA) are at odds over a loophole that allows swaps users to leave certain foreign exchange derivatives unreported.
It’s 10 PM: FCMs, SDs, MSPs — Do You Know the Status of Your Firm’s 2013 Annual Compliance Report Preparation?
Gary DeWaal and Associates LLC
Now that summer is almost over, Chief Compliance Officers of swap dealers (SD), major swap participants (MSP), and future commission merchants (FCM) should be well underway in the process that ultimately will lead to the preparation of their firm’s Annual Compliance Report for the fiscal year ending 2013, and the certification of the report by the CCO or the Chief Executive Officer of their firm.
Making A Difference Through Public Service – Commissioner Luis A. Aguilar, U.S. Securities and Exchange Commission – Latinos On Fast Track (LOFT) Symposium Hispanic Heritage Foundation Washington, DC
Exchanges & Trading Facilities
CME Group Inc. will not be harmed by a lawsuit by three of its members, experts say
Annabelle Ju – Medill Reports
CME Group Inc. will not be negatively affected by a lawsuit filed against the company charging breach of membership contract. That was the view of some who have reviewed the case, now being tried in Cook County Circuit Court.
IntercontinentalExchange to take over running Libor benchmark
Philip Stafford – FT.com
IntercontinentalExchange will take over the administration of the scandal-tainted Libor benchmark from February 1 after receiving approval from UK regulators on Friday.
Bats Chi-X CEO backs online investment platform
Anna Irrera – Financial News
Mark Hemsley, chief executive of Bats Chi-X Europe, and Steve Swanson, former global co-head of electronic trading at Citigroup, have backed an online investment platform co-founded by a high-profile industry veteran.
Aquis adds German blue-chips
Aquis Exchange, the subscriptions-based European equities exchange*, today announced that it will begin trading the 30 largest German stocks as of Wednesday, 22nd of January 2014.
Moscow Exchange: Mass Media Erroneously Reports Banking License Revocation
Mass media reported today, based on a CBR press release, that a number of credit organisations’ licenses had been revoked. The organisations named included the nonbanking credit organisation OOO Natsionalnaya Raschetnaya Kompaniya (National Settlement Company).
FIF Capacity Statistics For December 2013: Three New Record Peaks: UTP UTDF, SIAC CTS, And UTP UQDF
TOM MTF Statistics Week 3, 2014
Hedge Funds & Managed Futures
New Warnings From an Investing Pioneer
Jason Zweig – MoneyBeat – WSJ
For some forthright suggestions on how investors should think about today’s markets, I turned to investing pioneer Dean LeBaron, one of the most original and open-minded financial thinkers I know of. His motto has long been: “Look for the questions that are not being asked.”
US firms: overpaid, overcapitalised and over here
Sarah Krouse, Joe McGrath and Harriet Agnew – Financial News
Europe’s home-grown financial firms are facing a new wave of competitors from the US, sailing across the Atlantic looking for investment opportunities provided by the region’s recovering economies.
Warren Buffett, management consultant
Dan McCrum | FT Alphaville
The consequence of his incredible success finally caught up with Warren Buffett last year. At its 44th attempt, the S&P 500 finally grew faster than the book value of Berkshire Hathaway over a five year period. Mea culpa is expected in the annual letter to shareholders next month.
Templeton courts Asia investors with alternative assets
Mutual fund manager Franklin Templeton has hired a former hedge fund manager to expand its Asian line-up of products investing in lucrative alternative assets, joining its peers in tapping a rapidly growing market.
Hedge Fund Raises $350m for Tilt at Southern Europe
Harriet Agnew – MoneyBeat – WSJ
Amber Capital, a roughly $1.5 billion hedge fund manager, has raised $350 million for a new fund targeting southern Europe.
CVC sits on $20bn war chest
Anne-Sylvaine Chassany, Private Equity Correspondent – FT.com
CVC Capital Partners, the European private equity house that owns Formula One, has the biggest pile of cash to spend on leveraged buyouts, topping US rivals Apollo Global Management and Carlyle Group, as the industry prepares for an acceleration of deals this year.
Blinkx Founder to Join Venture Firm Balderton Capital
Suranga Chandratillake, the founder of the British Internet media company Blinkx, is joining the European venture capital firm Balderton Capital.
Eton Park hedge fund up 22.3 pct in 2013, exits some winners
Eric Mindich’s Eton Park hedge fund posted 22.3 percent returns in 2013 thanks to its holdings in collateralized debt obligations, media company 21st Century Fox, and residential mortgage-backed securities, it told investors, adding the fund has already exited some of last year’s winning positions.
The best hedge fund trades of 2013
Harriet Agnew – Financial News
On average, 2013 was a solid but unremarkable year for the hedge fund industry, with the average hedge fund gaining 9.24% during the 12 months. But like any year, there were outliers on the upside and some funds substantially outperformed their peers.
Banks & Brokers
Goldman Sachs Parts Ways With Richard Coppleson
David Rogers – MoneyBeat – WSJ
Richard Coppleson, an executive director of institutional sales and trading at Goldman Sachs Group Inc.GS +0.63%, is leaving the bank where he produced Australia’s best-known investment newsletter.
Investors Punish Citi’s Legal Costs, Look Past Morgan Stanley’s
Saabira Chaudhuri – MoneyBeat – WSJ
When Morgan Stanley reported fourth-quarter earnings on Friday that were weighed down by an unusually large legal charge, investors took the hit in stride and sent the company’s shares up anyway.
Morgan Stanley CFO Porat Says Firm Aims to Raise Stock Dividend
Justin Baer – MoneyBeat – WSJ
Morgan Stanley aims to raise its quarterly stock dividend for the first time since 2005 as part of a bid to return more excess capital to shareholders.
BNY Mellon takes blow from ConvergEx failure
Tracy Alloway and Arash Massoudi in New York – FT.com
Bank of New York Mellon suffered an 18 per cent fall in fourth-quarter earnings after the custody bank lost $115m on its investment in ConvergEx, the Wall Street broker that was accused by US regulators over its subsidiary “fleecing” clients through hidden fees.
Time for More Competitiveness at Citigroup
ANTONY CURRIE – NYTimes.com
Citigroup’s boss, Michael L. Corbat, needs to channel some of the aggression from his boardroom. With fourth quarter earnings of $2.6 billion, the megabank is alone falling short of estimates among peers who have reported their earnings for the quarter.
HSBC and Citigroup Suspend Currency Traders
CHAD BRAY – NYTimes.com
HSBC and Citigroup each suspended currency traders on Friday amid ongoing investigations into potential manipulation of the $5-trillion-a-day foreign exchange market.
Deutsche Bank Warns of ‘Challenges’ Ahead
Deutsche Bank, Germany’s largest bank, said it lost nearly 1 billion euros in the fourth quarter of 2013, more than expected, and warned of a difficult year ahead after revenue from investment banking declined and the bank absorbed further costs from legal problems.
U.S. regulators tell Rabobank: Fix anti-money laundering programs
U.S. regulators told Dutch bank Rabobank to fix problems with its anti-money laundering programs last month after identifying compliance issues in an order made public on Friday.
Clearing & Settlement
CFTC Staff Issues Exemptive and Interpretative Letters to Nadex and Commission Amends Nadex Derivatives Clearing Organization Registration Order
In response to a request from the North American Derivatives Exchange, Inc. (Nadex), a registered derivatives clearing organization (DCO), the U.S. Commodity Futures Trading Commission’s (Commission) Division of Clearing and Risk (DCR), acting under delegated authority from the Commission, issued an exemptive letter that grants Nadex relief from certain provisions of the Commission’s regulations applicable to DCOs.
CFTC Certifies Javelin’s MAT; Clock Ticks on Mandatory SEF Trading
Ivy Schmerken – Wall Street & Technology
Javelin Capital Markets received a regulatory nod to offer an array of interest-rates swaps on its SEF platform, but uncertainty remains for multi-leg trades.
EurexOTC Clear Gains Strong Support Among Sell- And Buy-Side Firms
Onboarding Commenced By Over 120 Buy-Side Firms – 32 Clearing Members From Seven European Countries Connected – Eurex Clearing’s Unique Individual Segregation Model And Cross-Margining Capability Seen As Major Benefits
Indexes & Products
Warburg Pincus buys stake in European ETF provider: report
U.S. private equity firm Warburg Pincus has bought a majority stake in a European exchange traded fund provider, in a deal that will give the asset manager new funds to expand offerings and grow through acquisitions, the Financial Times reported on Sunday.
Ready-made platforms seek ETF take-up
Peter Davy – Financial News
Specialist companies that help firms set up exchange-traded funds have become an increasing presence in an ETF industry that has been dominated by big brands. From just two main players three years ago, there are now more than half a dozen so-called white-labelling providers in the US, the most recent being ETF Issuer Solutions, which launched in November.
[TSE] New ETF to be Listed on Feb. 6, 2014(Thu.)-Mitsubishi UFJ AM “MAXIS JPX-Nikkei Index 400 ETF”-
Common Spreads and the Uncommonly Cool Custom Formula
Trade Talk – Trading Technologies
One of the most interesting aspects of supporting a product like TT’s Autospreader is the fact that users continue to find new ways to use it, especially as market conditions change. While it would be impossible for me to talk about the countless number of unique strategies that are created for specific markets, I can give you a good idea of how Autospreader can be applied by looking at how it’s used to execute some common arbitrage spreads.
Optimal Execution in the Age of Big Data
Irene Aldridge – Wall Street & Technology
Optimal Execution refers to the science of executing an order in today’s fragmented electronic markets. While many brokers and other market participants still insist on executing orders using intuition and by manually timing the markets, researchers in financial mathematics have developed fine techniques for quick identification of optimal trading conditions.
Finextra: FOW Tradedata unveils CFI data feed for Emir transaction reporting
FOW Tradedata today announced the availability through its Xymbology service of Classification of Financial Instruments (CFI) symbology for global futures and options contracts as part of its compliance data suite.
Kyriba Partners with GRC to Help Organizations Deliver EMIR Compliance
Kyriba, the leader in cloud-based treasury management solutions, has partnered with Global Reporting Company (GRC) to provide its clients with European Market Infrastructure Regulation (EMIR) compliant derivatives trade reporting capabilities.
Doctor Tells of Leaking Data to a ‘Friend’ at SAC
The largest insider trading scheme on record started with an attempt at friendship. That was the testimony on Friday of Sidney Gilman, an 81-year-old doctor who took the stand for the first time as the central witness for prosecutors in the trial of Mathew Martoma, a former portfolio manager at SAC Capital Advisors who is accused of trading on confidential information supplied by Dr. Gilman.
Ex-Moore Capital Trader Faces Eight Insider-Dealing Charges
Suzi Ring – Bloomberg
Julian Rifat, a former trader at Moore Capital Management LLC, faces eight insider-dealing charges over trades in companies including Barclays Plc (BARC) and Volkswagen AG (VOW), making him one of the most-high profile suspects to face prosecution in a U.K. investigation.
BCSC panel fines Victoria broker $100,000 for contravening IIROC suitability rules
Environmental & Energy
BGC Partners Announces It Has Entered Into An Agreement To Acquire The Assets Of HEAT Energy Group
HKEx Welcomes Benjamin Hung to its Risk Management Committee
Hong Kong Exchanges and Clearing Limited (HKEx) welcomes Benjamin Hung, the new Chairman of Hong Kong Interbank Clearing Limited (HKICL), to its Risk Management Committee (RMC).
Burma stock exchange may take some time
NIHON KEIZAI SHIMBUN
The push to set up a stock market in Burma by 2015 is falling behind schedule, hit by a shortage of manpower and know-how.
Citi offers automated RMB cross-border pooling in Shanghai free trade zone
Citi said on Monday it had launched an automated RMB cross-border pooling solution for its clients in the China (Shanghai) Free Trade Zone, a move that could help multinational companies optimize their cash management and enhance capital efficiency.
EU And China Begin Investment Talks
The first round of negotiations for an EU-China investment agreement will take place in Beijing on 21-23 January 2014. A comprehensive EU-China investment agreement will benefit both the EU and China by ensuring that markets are open to investment in both directions.
China central bank offers emergency funds to small banks as rates rise: sources
China’s central bank is offering emergency funding support to commercial banks amid a spike in cash rates, sources with direct knowledge of the move told Reuters on Monday.
Strong-won worries appear overblown for Korea’s manufacturers
Simon Mundy and Song Jung-a in Seoul – FT.com
When Samsung Electronics undershot analysts’ forecasts with its latest earnings figures this month, it reinforced concerns in South Korea about the rise in the country’s currency and set a gloomy tone for the forthcoming earnings season.
HKEx: Stock Exchange Participants’ Market Share Report
Investors shrug off emerging market gloom
Delphine Strauss – FT.com
Foreign investors shrugged off the growing gloom over emerging markets last year, according to comprehensive data which suggest the impact of US Federal Reserve plans to “taper” its asset purchases, was less dramatic than initially indicated.
Malawi Stock Exchange Weekly Trading Report – 17th January, 2014
ADX Signs Registrar Agreement With Al Benaa Real Estate
Tehran Stock Exchange Weekly Digest – 15 January 2014
The Egyptian Exchange (EGX) Monthly Statistical Report December 2013
Nigerian Stock Exchange Stock Market Report For Week Ending January 17, 2014
Having Enough, but Hungry for More
THREE recent stories got me thinking about a concept that is central to money, wealth and ultimately contentment but that is overlooked this time of year: knowing how much is enough.
Howard Marks – Oaktree Capital Management
The first inspiration for this memo came in early November, when I picked up a copy of the Four Seasons Magazine in my hotel room in Riyadh, Saudi Arabia. I happened to turn to an article entitled “In Defence of Luck” by Ed Smith. It’s been in my Oaktree bag ever since. In his two opening paragraphs, Smith presents a thesis for dismantling: “Success is never accidental,” Twitter founder Jack Dorsey recently tweeted. No accidents, just planning; no luck, only strategy; no randomness, just perfect logic.