Seems like we just finished our big conference flurry, but we’re at it again, attending the third annual iGlobal Alternative Investment Summit in New York. Aside from the fact that it’s taking place in a great city, it’s also providing some excellent content and discussion.
Most interesting to us this morning was a presentation was Victor “Trader Vic” Sperandeo, creator of the DTI, which underlies the Wisdom Tree Managed Futures ETF. It may seem strange to find us nodding along with his comments, given our substantial differences on the asset class, but the presentation’s content had little to do with his product. In addressing investment portfolio construction, he argued that traditional investments were going to be reactionary in an interventionist era – traders are left waiting for various countries’ governments to step in and act, and swinging based on those actions for better or worse:
“It’s a bet on a country’s leadership, and leadership makes mistakes: Hoover, raising taxes during economic stress. Kennedy, threatening the steel industry. Nixon, going off the gold standard… Leadership makes mistakes.”
Now, his answers when pressed about Natural Gas in the DTI and the validity of the seven month moving average were not as strong, but in an era of interventionism, his arguments about leadership and investing smack of truth. Our solution to the volatile leadership conundrum is likely different than his (no worries, agreeing with him doesn’t mean we’re now fans of managed futures retail products), but it was certainly an interesting presentation.
Another noteworthy panel focused on the development of urban areas from a real estate perspective. We are by no means real estate experts, but the portion that focused on the development of infrastructure had us leaning forward. Aaron J. Fossett of Fossett & Associates did a fantastic job contextualizing the conversation, describing the US economy as less a national economy than a statistical conglomeration of regional economies, arguing that, when viewed this way, the investing dynamic changes. However, the largest opportunity, in his mind, lies in public-private partnerships to address the growing infrastructure needs throughout these regions:
“We’re behind Malaysia and Barbados in per capita spending on infrastructure… We lose seven billion gallons of drinking water each year, and sewer overflows result in 10 billion gallons of raw sewage on the streets.”
Gross. But it makes you wonder… If Africa is, as Fossett says, leading the charge in these public-private partnerships, how long will it be before the idea gains broad traction stateside? We’ve already seen it take hold in our backyard, through Rahm Emanuel’s push for such partnerships in Chicago) Will it catch on nationally? Someone in the audience asked how to address investor concerns regarding liquidity.
No one on that panel had a good answer.