WHEN: TODAY, WEDNESDAY, APRIL 13TH AT 5PM ET
WHERE: CNBC'S "FAST MONEY"
Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. All references must be sourced to CNBC.
KATE KELLY: MELISSA, THANK YOU SO MUCH. GOT A HOLD OF AN INTERESTING QUARTERLY LETTER FROM UNIVERSA INVESTMENT TO ITS CLIENTS TALKING ABOUT WHAT HAPPENED WITH THE BLACK SWAN INFLATION FUND, WHICH WAS LAUNCHED IN 2009 AND BETTING IT WOULD DO WELL IN THE CASE OF INFLATION. AND ESSENTIALLY, THEY CUT THEIR NUMBERS IN A SLIGHTLY UNUSUAL WAY, BUT ESSENTIALLY, THEY'RE UP ABOUT 9% THROUGH THE END OF THE FIRST QUARTER OF THIS YEAR, AND ABOUT 2% FOR THE MONTH OF MARCH. THEY SAY WHAT THEY DID PARTICULARLY WELL ON ARE OPTIONS ON CERTAIN COMMODITIES.THEY MENTIONED CRUDE OIL, GRAINS, COFFEE AND SILVER. THEY SAY THEIR ONLY LOSING POSITION WAS ON TREASURIES. AND THEY HAVE SOME INTERESTING COLOR ABOUT WHAT THEY SEE HAPPENING HERE. OUR APPROACH OF BENEFITING FROM THIS IDIOSYNCRATIC VOLATILITY IN A RISK-CONTROLLED NON-LINEAR WAY HAS BEEN PRUDENT AND EFFECTIVE IN THIS ENVIRONMENT OF GLOBAL COMMODITY PRICE AND STABILITY. WE EXPECT THIS TO CONTINUE THANK YOU BEN BERNANKE I SHOULD NOTE TAIL RISK HEDGING, WHICH IS WHAT UNIVERSA DOES THIS IS OF COURSE NASSIM TALEB'S FUND WHICH YOU NOTED, IS ACTUALLY DESIGNED TO LOSE MONEY DURING MOST TIMES.IT'S REALLY SORT OF A WORST CASE SCENARIO INSURANCE INVESTMENT.SO IT'S INTERESTING THAT THEY'RE DOING PRETTY WELL YEAR OVER YEAR AS THEY SAY IN THIS LETTER AS WELL AS SO FAR THIS YEAR MELISSA.
GUY ADAMI: IT'S GUY. I DON'T KNOW IF YOU SAW THE PIECE OUT YESTERDAY, IF WE USE THE SAME METHODOLOGY AS THEY USED DURING THE VOLCKER ADMINISTRATION 79 80, INFLATION IN THIS COUNTRY WOULD BE 9.6%, HAVE YOU HEARD ANY OF THOSE THINGS?DID THEY ADDRESS THAT IN ANY WAY?
KELLY: LET ME TAKE A QUICK LOOK AT THE LETTER BUT THEY DON'T TALK TOO MUCH IN DETAIL ABOUT THE ENVIRONMENT OTHER THAN THEY SAY THEY EXPECT VOLATILITY TO CONTINUE. ANOTHER THING THEY SAY WHICH IS KIND OF INTERESTING IS THEY THINK THE FOLKS ARE LATE COMERS TO THE TAIL RISK HEDGING GAME WHO HAVE ENTERED RECENTLY.THEY SAY, WELL APPARENTLY UNEXPECTED THINGS, IE INCONSISTENT WITH ECONOMISTS AND ANALYSTS FORECASTS CAN HAPPEN AND WE CONTINUE TO AMUSE OURSELVES WITH THE SUDDEN RECOGNITION OF THIS BY THE INVESTMENT COMMUNITY. NO DOUBT A BIT OF A DIG ON SOME OF THEIR COMPETITORS IN THIS GAME. WHO I UNDERSTAND THERE ARE THREE OR FOUR FOLKS IN THIS BUSINESS AS WELL.PIMCO LAUNCHED A FUND I BELIEVE LAST YEAR. THEY WERE STILL PUTTING IT TOGETHER AT THE END OF THE YEAR AND A COUPLE OF OTHER NAMES, PINE RIVER, CAPULA. I UNDERSTAND THOSE FUNDS ARE MORE OR LESS EVEN FOR THE YEAR. BUT DETAILS TO FOLLOW.
TIM SEYMOUR: WHICH WAS THE BIGGEST INPUT THAT MADE THEM THE BIGGEST BENEFICIARY? WAS IT JAPAN? THE MIDDLE EAST?WAS IT, YOU KNOW, THE PIGS? I MEAN, WHERE ARE WE? THIS IS A GREAT ENVIRONMENT FOR THOSE GUYS BECAUSE VOLATILITY IS CHEAP AND THESE ARE BLACK SWAN EVENTS.
KELLY: ABSOLUTELY NOW THEY DON'T GET INTO DETAILS ON THEIR GLOBAL POSITIONS UNFORTUNATELY. THE LETTER IS VERY SHORT. THEY REALLY JUST TALK ABOUT THE COMMODITIES THAT HAVE DONE QUITE WELL. WHAT THEY DO HERE IS PRIMARILY INVEST IN OPTIONS. SO UNFORTUNATELY, WE DON'T HAVE A WHOLE LOT OF COLOR ON THAT NOR DO WE HAVE TOO MUCH COLOR ON WHAT THEY'RE EXPECTING OUT OF THE TREASURY OTHER THAN A CONTINUATION OF THE SAME SITUATION.
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