Steer Clear of Copper Coated Brazilian Cattle

While alternative investment professionals often extol market diversification as a risk tool (never too much bet on any one opportunity), what we enjoy – as investors – about so many markets available to such pros is so many opportunities for returns. There’s nearly always a larger discussion to be had which ignores the all-encompassing CNBC discussion on whether equities  rising or falling, but where to find the time to take up such discussion.

Here’s three quick discussion starters in markets that aren’t equities:

 

Dr. Copper

CU is on the periodical table of elements and known as ‘Dr. Copper’ to the many who believe it to be an indicator of turning points in economic activity. It’s down 20% on the year (and a cool -50% since it’s high in 2011), so where’s the recession?

Copper_1(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz

For many this might trigger warning signs for a downtown in the equity markets, but not for Billionaire Carl Icahn. In one of his most recent moves, Icahn made large stakes in two business directly dealing with Copper and Oil products, says CNBC.

“Icahn told CNBC he bought shares of Freeport because he thinks copper prices “will recover in a couple a years.”

 

The Brazilian Real

If you want to know what real political gridlock is, just google Brazil and politics. We in the US look like a model government in comparison. The ratings of Brazil’s president is below 10%, and their congress refuses to pass any measures to calm the markets. The direct effect? The Brazilian Real has put in the second weakest close against the U.S. Dollar since the beginning of the currency in 1994.

The Volatility of the Real in two days:

Brazilian Real(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Wall Street Journal

Now the big picture to put it in perspective. The Brazilian Reel has been devalued against the dollar by 55% YTD, moving from 2.657 against the dollar at the start of 2015 to 4.132.

10 Year Brazilian Real(Disclaimer: Past Performance is not necessarily indicative of future results)
Chart Courtesy: XE

To put that in perspective, if you had invested in a Brazilian stock priced in Real at the beginning of the year, it would have to be up over 55% for you to be even in US Dollar terms for the year. That’s a lot to ask from an investment.

 

Cattle Slaughter

Forgive our pun here, but cattle are getting slaughtered in record numbers, both literally (actual cows getting killed) and in terms of the market price. As we mentioned last week when there were the most cattle kills in a week in 2015, and the most cattle kills in September since the 1980’s.

But it’s not done yet, with the Live Cattle market moving “limit down” again today (click here if you don’t know what that means). There’s a whole lot of downside on that chart below, or maybe this is the blow off before a roaring uptrend in 2014. For now, we’ll keep cheering it lower for those right-sized managers who actually have exposure to this market.

Live  Cattle Since 2010(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz

So which will you discuss at your local Oktoberfest gathering or the Halloween party?  Copper, Cattle, or Currency?

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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