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News Bulletin : ADA News Bulletin November 2010
30 NOVEMBER 2010 For example, your next door neighbour put his house up for sale and it was very similar to your own house. If you sold your house to buy your neighbour's house then it is highly unlikely that the price of the two houses would vary greatly as they were on the same street in the same city affected by the same local economy. However, if you were taking a global macro view and you owned real estate in Los Angeles and in Sydney then you might consider selling the LA property which has a weak real estate market and buy more property in Australia. In this case you are evaluating the same asset class (property) but taking a relative value global view to allow you to make the best investment decision. HOW DO GLOBAL MACRO MANAGERS DECIDE WHERE TO INVEST? Global macro funds are able to allocate capital across asset classes, sectors and regions which allow the manager a very wide investment mandate. Through rigorous analysis global macro managers attempt to identify mispriced assets based on macroeconomic analysis. These managers can take positions in stocks, bonds, currencies, interest rates and commodities markets. A global macro manager has the ability to go long (buy assets expected to appreciate) or short (sell assets expected to decline in value) as well as use leverage to enhance returns. Global macros managers take concentrated positions -- ideally with limited downside but with huge potential upside. There are two types of trades used by global macro fund managers. Trades can be either directional or relative value. Directional trades tend to be a trade based on taking a position on an isolated price movement. For instance, a manager who believes the Australian dollar will continue to appreciate will sell US dollars and buy Australian dollars. Trades based on relative value attempt to take advantage of mispricing between two different assets. For example, a manager might sell US equities due to the economic fundamentals of the US and buy Chinese equities due to the strength of the Chinese economy. Different fund managers have different investment styles. Some managers will base their trades on their subjective opinion of market conditions drawing on their experience and analytical skills. This is often referred to as a discretionary approach. Other managers use a systematic approach that uses technical analysis tools or pre-defined rules to identify profitable trading opportunities. Often managers will use both of these approaches to varying degrees using their subjective opinion and experience to confirm or refute trading ideas generated by the technical analysis tools. As George Soros once said, "I don't play the game by a particular set of rules; I look for changes in the rules of the game." Successful global macro managers are able to look at the world and the complex relationships between economies, currencies and government policies and identify events that effectively change the rules of investing and create lucrative opportunities for investment. IS NOW A GOOD TIME TO INVEST IN A GLOBAL MACRO STYLE FUND? The term 'globalization' is used commonly these days to describe our changing world. No economy exists in isolation and can be affected by world events beyond the control of a single government. Nowadays, capital flows freely around the world and will go where it is best treated. It has been said that arguing against globalization is like arguing against the laws of gravity. Investment managers are realizing that economic or investment analysis can no longer be conducted on a purely domestic basis. The speed with which capital is capable of moving means that any economy can be disrupted by international capital flows that are due to external considerations beyond the control of Prices do not include gst and may be subject to change Clinical Cases in Restorative and Reconstructive Dentistry Dr Gregory J. Tarantola ISBN: 9780813815640 • Paperback • 488 pages • Wiley-Blackwell $A119 ex gst The "Clinical Cases" series provides actual cases with an academic backbone. Clinical Cases in Restorative and Reconstructive Dentistry describes the principles and demonstrates their practical, every-day application through a range of cases building from the simple to the complex and from the common to the rare. This approach supports the trend in case-based learning, and covers topics from infant oral health to complex pulp therapy. The text is highly illustrated and in full colour. Cases are accompanied by academic commentaries. The book establishes the fundamental principles that apply to all cases and outlines the 10 decisions to be made with cases. Cases are examined by type of restoration and solution, and by type of problem. This assists readers to build their skills, aiding critical and independent thinking and analysis. The case-based format is essential for pre-doctoral dental students, post- graduate residents and general practitioners, both as a textbook from which to learn about the challenging and absorbing nature of restorative and reconstructive dentistry, and also as a key reference source to help with treatment planning when perplexing cases arise. investment insight
ADA News Bulletin October 2010
ADA News Bulletin December 2010