Mom-and-pop retail investors are zigging and big-money institutions are zagging as the market tries to figure out which way things are going.» Read More
Investors are getting comfortable with risk approaching pre-crisis levels, but stocks do not appear to be in a bubble, according to investor Howard Marks.
In the latest of his widely followed "Oaktree memos," Marks sounds numerous cautionary notes about the way in which investors are being herded into risk.
Yet when looking at the climate of 2007 compared to the current state of affairs, he said markets have a ways to go before reaching those dizzying heights.
"A rise in risk tolerance is something that should get your attention and focus your concentration," wrote Marks, the billionaire founder of Oaktree Capital Management. "But for it to be highly worrisome, it has to be accompanied by extended valuations. I don't think we're there yet. I think most asset classes are priced fully—in many cases on the high side of fair—but not at bubble-type highs."
Hedge fund managers are riding their stock picks as long as possible, but overall returns continue to lag the market, according to a new report from Goldman Sachs.
The bank's 783 hedge fund clients turned over—sold a position before holding it for a year—just 28 percent of their portfolios, according to the report. The 12-year turnover average is 35 percent.
The turnover of funds' largest holdings also fell to an all-time low of 15 percent. And the average fund holds 63 percent of long assets in just 10 top positions,
In other words, top hedge fund managers believe their best ideas will continue to gain as the bull market hits new highs.
The other day I was having lunch with a friend from college who made a lot of money during the financial crisis by shorting stocks.
Not John Paulson money, of course. He was focused on equities, when the real money was in fancier derivatives. But enough that someone prone to occasionally confuse success in financial markets with wisdom would consider him a very wise man.
He ordered a burger with Swiss cheese and drank tap water. I had the tuna sandwich and something stronger than tap water.
"I hope you didn't listen to me the last time we met," he said. "I wish I hadn't listened to me."
The last time we had seen each other was back in late April or early May—I forget exactly. He was absolutely terrified by the performance of the equities markets.
Earlier this year, Morgan Stanley executives met for a regularly scheduled meeting that broached a controversial topic: Whether the bank should ditch its old BlackBerry devices in favor of new-issue Apple and Android devices.
The bank decided migrating the entire workforce off of BlackBerry—and onto new phones— would be too expensive, people briefed on the meeting said, so instead they agreed to install a friendlier "BYOD"—or "Bring Your Own Device" policy.
Good Technology has been stealthily stealing Blackberry's enterprise clients with a simple pitch: Its secure platform lets employees access the corporate server on their personal device—be it an Apple iPhone or Android.
The Carlyle Group is primarily known as a private equity firm, but its latest acquisition continues to diversify the business away from vanilla buyouts and other cash infusions into companies.
The $185 billion firm announced Wednesday it had agreed to buy Diversified Global Asset Management Corporation, a $6.7 billion Toronto-based firm that specializes in hedge fund investing through so-called funds of hedge funds. In other words, institutional investors like pensions and endowments pay DGAM to select third-party managers for them.
Carlyle will initially pay $33 million for DGAM and then up to $70 million more over the next seven years "subject to performance and service requirements," according to a filing with the Securities and Exchange Commission. The transaction is expected to close in February 2014.
DGAM has grown quickly: the firm's cash under management increased by $3.56 billion over the last five years, equivalent to an asset growth of 139.96 percent, according to InvestHedge.
Hedge fund manager Steve Cohen has at least one easy way to make up some of the $1.2 billion he recently agreed to pay the government: Cash in on SAC Capital Advisors' sprawling real estate holdings that stretch across three continents.
Much has been made of billionaire Cohen's personal properties.
His homes, all in the New York City area, include a $23.1 million, 35,000 square foot mansion in Greenwich, Conn.; a $115 million midtown duplex already for sale; two West Village residences valued at $23.4 million and $38.8 million, respectively; and adjacent homes in East Hampton, N.Y. worth an estimated $62.5 million and $18 million respectively based on purchase prices, according to a recent Forbes report.
The aggressive market rally of 2013 might look like it's starting to run out of steam, but history says there could be some fuel left in the tank yet.
While there remains any number of headwinds, past behavior at least suggests such a hard-charging run doesn't necessarily signal a spent market. The average next-year return for the S&P 500 when it gains more than 20 percent is still about half that, according to historical data from S&P Capital IQ.
"Good years tend to follow great years," said Sam Stovall, chief equity strategist at S&P Capital IQ.
Since World War II, the S&P 500 market index has seen 18 annual gains of more than 20 percent.
John Carney is a senior editor for CNBC.com, covering Wall Street and finance and running the NetNet blog.
Jeff Cox is finance editor for CNBC.com.
Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.
Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."
Investors won't be bothered by a Fed taper even if it starts this month, JPM's chief U.S. equity strategist tells CNBC.
Traders expect to see a fairly merry market clear on through December now that the November jobs report is out of the way.
The stock of a beauty retailer Ulta shed more than 20 percent on Friday.