FUTURE
The Future of investing
GEPA
The magazine of Superfund, Issue 1 / 2009
Full Speed Ahead!
An interview with Bode Miller
Overall winner – 2008 Alpine Skiing World Cup
Proof Your Future
While real estate values collapse, equities
plummet, and central banks hand out
billions in bailouts, managed futures funds
stay right on course.
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
iStockPhoto.com
One Mile Report: Vienna Nouriel Roubini
Vienna up close. In this issue, the FUTURE
“One Mile Report” highlights the cultural
and culinary landmarks surrounding one of
the 18 Superfund offices.
Burgtheater (Foto: Georg Soulek)
FUTURE speaks with the controversial
investment expert in an exclusive
interview about the current turmoil in
the financial markets.
2∫ FUTURE | Contents
12
26
Interview: Nouriel Roubini
The U.S. credit crisis has pushed the
financial world to the breaking point. While
most other investment vehicles have slid deep
into the red, Superfund funds have delivered
solid performance. FUTURE analyzes how
this crisis came about and what it ultimately
means for managed futures funds.
The 2008 Alpine Skiing World Cup
Champion explains how, with the Superfund
sponsorship program, he continues to deliver
outstanding performance both on and off the
slopes. Bode reveals why he still takes his RV
to major international ski events, as well as
his personal goals for the season ahead.
Nouriel Roubini, Professor of Economics at New
York University, talks with Superfund about his views on
the medium-term investment outlook. This absorbing
interview provides a fascinating insight into the
internationally acclaimed – and highly opinionated –
market expert.
Article on page 4
Article on page 12
Article on page 26
10
Van Gogh Museum Amsterdam
Interview: Bode Miller
Contents
Superfund goes
to Hollywood
Van Gogh
Reloaded
There’s more excitement
than meets the eye to
producing a commercial
from transforming an initial
idea into a glossy TV spot.
And where better to do so
than Los Angeles? In the
pursuit of excellence, a
Superfund marketing team
flew to the West Coast to
produce three spots, as
FUTURE discovered.
Article on page 10
18
20
Christian Baha
Founder and owner
of Superfund
REUTERS
4
Solid as a Rock
GEPA
iStockPhoto.com
FUTURE in
60 Seconds
22
30
Superfund
Superstars
One Mile Report:
Vienna
Superfund News
around the world
In fall 2008, the famous
Viennese art museum, the
Albertina, hosted the most
extensive van Gogh exhibition
ever seen in Austria. Klaus
Albrecht Schröder, director
of the Albertina, brought
together over 150 artworks
by the great artist from
around the world which were
then transported to Vienna
for the occasion.
FUTURE takes pride in
introducing the Superfund
sponsorship program which
includes talented stars such
as Polish ski jump champion,
Adam Malysz, Austria’s
celebrated swimming siblings
Mirna and Dinko Jukic, as
well as American dance
sensation, Sarah Smith from
the American Ballet Theatre
and many others.
Centrally located in the
first district of Vienna, the
Superfund office lies within
walking distance of some of
Europe’s finest culinary and
cultural delights. Two of the
most famous of these
landmarks, the Albertina art
museum and the Vienna
Burgtheater
are
even
supported by Superfund.
The group of Superfund
companies is highly active.
Bode Miller celebrated his
World Cup victory with us in
New York; a new Superfund
investment center opened in
Chicago; market expert
Friedhelm Busch went on a
national tour with Superfund
Germany; and the American
Ballet Theatre performed for
Superfund clients in Tokyo.
Article on page 18
Article on page 20
Article on page 22
Article on page 30
High Return ≠ High Risk
At least there is one positive side effect of the global
banking and real estate crisis: The old assumption in
the financial world that high returns automatically
mean high risk is being convincingly disproved. In fact,
the opposite may actually be the case.
While stock markets plunge into free fall, investment
banks go bankrupt, and governments pump hundreds of
billions into failing banks, the largely undiscovered
asset class of managed futures funds has emerged as one
of the big winners of this crisis. The most successful
managed futures funds have earned +30 to 60%
returns in the first ten months of this year. Throughout
times of market crisis, whether during the Iraq War, the
Russian debt crisis or the Asian crisis, the failure of
LTCM, the dot-com crash, or the current banking and
real estate crisis, managed futures funds have been able
to post positive returns.
Managed futures funds can generate high returns not
only in times of market turbulence but also in phases
where the stock market moves steadily upward. Periods of
correction lasting one or even several years are also to be
expected. However, what is important is that the recovery
phases for managed futures funds have proven to be far
shorter and display significantly milder drops than those
of equities. While stock markets have repeatedly suffered
losses of between 60% and 90% of their value during a
crisis, managed futures funds have generally experienced
corrections of only 20% to 40%. The problem with
equities is that if they lose 90% of their value, it takes a
staggering 900% recovery just to come out even. These
drawdowns in the stock market can last between 15 and
25 years, while in contrast, managed futures funds usually
experience dry spells of just one to four years.
In a financial world dominated by bad news, there
is indeed still some good news to be found.
Yours faithfully,
SUPERFUND Q-AG1)
4∫ FUTURE | Managed Futures
Managed Futures | FUTURE ∫5
Solid as a
ROCK
W
hile the financial world is
staggering and markets crash
following the U.S. subprime crisis,
managed futures funds are emerging
at their best. As the financial storm
continues to rage, another successful
chapter is being written in the long
history of computer-managed funds.
S&P 500
MSCI World
NIKKEI
Returns in Crisis
iStockPhoto.com
In times of crisis, the quality of an investment portfolio is really put to the test. Over
the long run, managed futures funds have generally performed independently to
equities. But take a look back at the past and find something more telling: When equity
markets drop, managed futures funds actually provide a solid hedge against risk.
(Above: Superfund Q-AG1), MSCI World index of global equities, S&P 500 index of
U.S. equities, Nikkei index of Japanese equities, from 10/2007 to 09/2008.)
Performance
12 months
60 months
2008
5-year correlation
11/07 – 10/08 11/03 – 10/08 01/08 – 10/08
11/03 – 10/08
Superfund Q-AG
+26.8%
+67.0%
+30.0%
1.00
CISDM CTA Equal Weighted
+13.3 %
+43.1%
+10.9%
+0.81
Gold Spot
–9.0%
+88.6%
–13.1%
+0.14
CRB Commodities Index
–23.5%
+8.4%
–25.2%
+0.15
S&P 500
–37.5%
–7.8%
–34.0%
–0.02
MSCI World
–43.1%
–0.6%
–39.8%
+0.05
Nikkei
–48.8%
–18.8%
–44.0%
+0.03
Source: TeleTrader
*)
Since the summer of 2007, a category
five hurricane has been blowing through
the world’s financial markets. By the start
of fall 2008, virtually all of the world’s
stock markets had been thoroughly
ravaged by this perfect storm. In the U.S.,
the 500 big corporations belonging to the
S&P 500 lost almost –38% of their market
value. Japanese equities were hit even
harder, with the Nikkei losing over –48%
of its value. Meanwhile, the crisis in the
stock market has been spreading like
wildfire around the globe, all the way to
Australia and New Zealand. Worldwide,
equities plunged by more than –43%
(MSCI World). Managed futures funds
like Superfund funds, however are a
different breed; they can win when others
are losing. To put this into numbers: Over
this same period of global financial crisis,
the Superfund Q-AG1) has gained almost
+27%. In short, even in these extremely
painful times for equity investors, the
Superfund trading strategy has remained
as solid as a rock.
Superfund Q-AG (closed fund). Source: TeleTrader.
Period: 11/2007 – 10/2008. Past performance is
not indicative of future results.
1)
6∫ FUTURE | Managed Futures
For many years, buying U.S. residential
property was a winning investment. Even
homebuyers with poor credit were
granted hefty mortgages on extremely
favorable terms.
∫7
dropped by –35%, while in the Los
Angeles area, the average home has lost
–31% in value. These losses are not only a
huge blow to Americans who are watching
the value of their homes plummet, but
also to the 21% of buyers who bought
residential property for investment
purposes – or even as short-term
speculation.
When measured against the Standard
& Poor’s Shiller Home Price Index, which
tracks the U.S. residential real estate
market in the 20 most
important metropolitan
areas, buying a home The world’s central
was indeed a fantastic banks are trying to bring
investment for a number the U.S. credit crisis
of years. Between 2000 to heel with capital
and July 2006, home injections amounting
prices rose by an average to tens of billions.
of +16% annually.
The real estate crash
Since that peak, the Home Price
Index has fallen by about –20%. In
markets such as Las Vegas and
Miami, prices have
On a larger and more
concentrated scale, these
collapsing home prices
have been affecting
numerous major banks
which
hold
these
distressed
mortgage
loans, including some of
the world’s largest and
most powerful financial institutions. The
extent of the resulting financial damage is
estimated by financial experts. At the
beginning of May, Bloomberg News
totaled the required write-offs among the
U.S. banks and came to a figure of 650
billion dollars. An analysis published by
the International Monetary Fund shortly
thereafter calculated the possible extent
of the damage at USD 945 billion.
From January to October 2008 the global
stock market (MSCI World Equity Index)
lost 18,000 billion USD market
capitalization. The tremendous danger
imposed on the world’s financial system
has led to a scramble in Washington in
order to save the banks.
Billions for bailouts
Despite the looming crisis, it took
almost everyone by surprise as the
world’s five leading investment banks
teetered on the brink of insolvency in
recent months. Lehman Brothers, one of
the leading names on Wall Street, filed for
bankruptcy with more than 600 billion
dollars in debt. In the case of Bear Stearns,
Merrill Lynch, Morgan Stanley and
Goldman Sachs, the Federal Reserve, the
U.S. Treasury and other white knights
stepped into the breach. AIG – the world’s
largest insurance company – was saved
through government intervention which
some might regard as a partial
nationalization. The resulting earthquakes
which have since been rocking the stock
market on an almost daily basis could only
be partly calmed by the announcement
from Washington of a stunning USD 700
billion bailout package.
Government support was also declared
for distressed money market funds in
the form of a USD 50 billion injection.
The model for this was the Resolution
Trust Corporation, through which the
government assumed loans on a massive
scale from failed savings and loan
institutions in 1989. Even before this
announcement, U.S. Treasury Secretary
Henry Paulson and Federal Reserve
Chairman Ben Bernanke had to step in to
save Fannie Mae and Freddie Mac, the
two largest U.S. mortgage institutions
which together hold or guarantee some
5.2 trillion dollars in home loans. At the
urging of the U.S. Congress, Paulson
acted with the Fed to provide additional
credit to both of these mega-institutions,
who from July 2007 through to the end of
March 2008 had already suffered losses of
11 billion dollars. The Treasury was also
granted a free hand to buy stock in these
two mortgage giants, an option which was
also used in an attempt to prop up
California-based IndyMac, one of the
largest independent U.S. mortgage
lenders.
Banks under pressure
As it tumbled into insolvency,
IndyMac was seized by the federal
government, the second-largest bank
failure in U.S. history. The list of those
who have fallen victim to the U.S.
subprime crisis is long indeed:
CHRISTIAN BAHA comments ABOUT THE MARKET
Christian Baha, Founder and owner of Superfund
In his latest book, George Soros writes that,
for the first time since the Great Depression,
the U.S. credit crisis has led to a situation
which is bringing the financial system close
to meltdown. What do you think?
I share this opinion. Banks have been
operating with leverage of 30 to 40
times that of equity. Practices such as
these endanger the financial system.
The price of gold has been rising for years
and has reached a high of USD 1,000 within
the past year. Are we seeing a bubble here?
I don’t see any signs at all of a bubble in
the gold market. As far back as three
years ago I was predicting that gold
would reach 1,000 USD an ounce on
CNBC and Bloomberg. At that time,
analysts and investment bankers were
extremely skeptical. But events since
then have proven me right. I believe that
the price of gold will continue its rise
and that, in the long term, we will see it
reach 2,000 USD an ounce.
Is the rise in gold mainly being driven by
the weak USD?
iStockPhoto.com
Real estate Crash
The price declines in U.S. residential real estate, long regarded as a “safe”
investment, have taken a huge toll on both individual and institutional investors.
Yes. But the reason for the strength of
gold lies not only in the weak USD but
similary with the more recent decline of
the euro. Gold has also strengthened
relative to silver and platinum. Consider
that while silver and platinum have
suffered corrections of up to 70% from
their highs, the correction in the price of
gold has been only about 30%. Investors
are losing confidence in paper securities
such as equities and bonds and even in
paper money, and so the values of these
will continue to fall.
Where do you see the dollar heading?
Over the long term, it will continue to
head downward – but the euro will, too.
Because of the subprime crisis, both the
U.S. and Europe are printing a great
deal of money, not to mention the huge
government deficits – and over the long
term, these fuel inflation.
What else is driving the price of gold?
Demand. There is only a finite amount
of gold in the world. At the same time,
demand remains very high, particularly
in India and China. And the more that
uncertainty and fear grow with recession,
stagflation, the real estate crisis, and the
drying up of the credit market, the faster
the demand for gold will rise. Gold has
held its intrinsic value for many thousands
of years and has never been affected by
inflation.
“Three years ago, I
predicted that gold
would reach
USD 1,000 an ounce. In
the long term, we will
see it reach USD
2,000.”
8∫ FUTURE | Managed Futures
Managed Futures | FUTURE ∫9
Trend following
Even experts have trouble understanding the
“herd instinct”: The phenomenon explaining
why so many people behave the same way at
the same time. Professor Robert Solow,
winner of the Nobel Prize in Economics,
expressed his bewilderment back in 1998 that
U.S. stocks were enjoying such a strong rally
– even though there was no logical reason
behind it. Basing his argument on theories of
economic growth, Solow concluded that the
Even back in February of last year, HSBC,
Europe’s largest bank, had to issue a profit
warning, then two months later in April
2007, the U.S. mortgage bank New
Century Financial ran into trouble. After
another two months, the turmoil reached
Germany, with IKB Industriebank of
Düsseldorf announcing major problems,
and by the summer, crisis at another major
German bank, Sachsen LB, led to its
takeover
by
Landesbank
BadenWürttemberg. By August of last year, the
crisis prompted reactions from central
banks around the world, with the
European Central Bank pumping 95
billion euros into the money markets in
order to halt the rise of the interbank
lending rate, which had already risen to
4.6%. The problems continued to mount
at major banks not only in the U.S. but
also in Europe, including such major
names as UBS and Credit Suisse of
Switzerland, and Commerzbank and
Postbank in Germany. In January 2008,
the crisis entered a new chapter with the
failure of Countrywide, another giant
U.S. mortgage lender, which could only
avoid bankruptcy through a takeover by
Bank of America.
Managed futures funds
strong even in crisis
While stock markets post staggering
drops and banks continue to struggle
under the pressure – the credit crisis
drove the three-month interbank rate
above the five percent mark in
September 2008 – managed futures
funds have again proven their strength
in this period of crisis. At the time of the
Russian debt crisis, managed futures funds
posted positive returns of +17% between
July 1998 and June 1999. While the
bursting of the technology bubble in the
spring of 2000 triggered a general stock
market crash, managed futures funds
remained solidly in the black with a gain
of +13%. The huge disparity between
traditional equity investments and
managed futures funds, which are largely
independent of movements on the overall
financial markets, was firmly demonstrated
in the bleak period surrounding the terror
attacks of September 11. From July 2001
to June 2002, the MSCI World equity
index fell by –17%. Over the same period,
managed futures funds posted a gain of
+8%, thus proving their ability to
withstand severe crisis.
The reason that managed futures funds
have proved themselves again and again to
be as “solid as a rock” as part of a balanced
investment portfolio is quite simple: They
are virtually uncorrelated with the general
market, meaning that regardless of
whether the financial markets move up or
down, this has little bearing on managed
futures funds. If the price of one security
moves in exact step with another security,
they are said to have a correlation of +1.
If they always move in exact opposite
directions, they have a correlation of –1.
The correlation between the Superfund
Q-AG1) and the Dow Jones Industrials
Average is –0.14, showing that Superfund
funds are virtually uncorrelated with the
stock market. This is in part due to
extremely broad diversification among
many different markets, and also due to
the ability of funds like Superfund funds
to profit in both rising and falling markets.
quarterly returns from both equities and
Even when compared to the commodities
managed futures funds shows that those
markets, Superfund funds show themselves
funds which trade on a wide range of
to be largely independent, with a
different markets perform well even when
correlation between the Superfund
the stock market is in trouble. And adding
and
the
Q-AG1)
to these benefits of
Commodity Research Since 1980, managed
market independence,
Bureau (CRB) index of futures funds have yielded
managed futures funds
just
+0.15. a return of over +5,400% – have also yielded
Correlations
with that’s more than five times
clearly superior returns
other markets such as higher than equities.
over the long run:
global equities or even
While global equities,
the gold price are
as measured by the
likewise close to zero.
MSCI World index, posted a gain of
roughly +950% from the start of 1980
Managed futures funds
through the middle of 2008, the CISDM
vs. equities
Managed Futures Index grew by over
The solid performance of managed
+5,400%. Regardless of how one cuts the
futures funds when directly compared
numbers, the system-based approach to
to equities is further highlighted in
trading out-shines the competition in both
periods of sustained weakness. While
good and bad times.
global equities suffered a loss of more
than –45% in the bear market period
from 2001 to 2003, managed futures
1)
Superfund Q-AG (closed fund). Source: TeleTrader.
funds dating back to 1979 have consistently
Period: 11/2007 – 10/2008. Past performance is
been able to earn their way out of
not indicative of future results.
temporary drawdown. An analysis of
iStockPhoto.com
iStockPhoto.com
herd instinct was behind this trend.
Trend following systems use sophisticated
computer models to search for market trends
in their earliest stages. As soon as a trend is
identified, the systems invest. If the trend does
not in fact continue in the right direction, the
computer immediately closes out the position
– without its judgment being clouded by
human emotions or by this herd instinct which
is such an integral part of human behavior.
Trend following is based on
one of man’s oldest instincts:
the herd instinct. As long as
humans trade on the world’s
exchanges, trend following
systems will be able to
enjoy long-term success.
10∫
Superfund goes to Hollywood | FUTURE ∫11
Christian Baha on the set,
following the director’s many
instructions.
More than 40 Hollywood professionals
were involved in the shoot.
“Ready and... action!” Already the star of
several advertising campaigns, Christian
quickly adapted to his role of Hollywood
actor for the shoot.
Superfund
Goes to
Hollywood
The basic
concept in
an early
storyboard.
The key was to use Baha’s distinctive
Austrian accent to good effect: The
director (played by an actor in the
commercial) keeps getting knocked back
in his attempts to get Baha to correctly
pronounce the word “investor” (or
“inWestor” according to Christian). By
making use of Baha’s accent in a humorous
fashion, the commercial yields a higher
recall rate and is therefore more effective
in raising brand awareness.
The spot aims to make the Superfund
brand more popular in the U.S. and link it
to the managed futures asset class. The
production crew was quite surprised that
this concept was conceived in-house by
Superfund marketers. “You normally need
an advertising agency with a whole team
of creatives to realize a project like this.”
watch the commercial online:
www.superfund.com/tvspot
A look behind the scenes: Every detail came under the constant scrutiny
From left to right: Rene Danzinger (Superfund Director of global marketing),
of the film crew as well as the Superfund marketing team. The goal: A
Jeff Apps (Director), Larry Reno (Head of marketing for Superfund USA),
perfect finished product, both cinematically and in terms of content.
Christian Baha (Founder and Owner of Superfund).
iStockPhoto.com
Hollywood is synonymous with the
world’s TV and movie industry. Superfund
spent two full days there in August,
working with a crew of 40 film
professionals to make a first-rate TV
commercial for the U.S. market.
Superfund Founder and Owner Christian
Baha plays the leading role in the
commercial, which shows the spot itself
being filmed.
Interview: Bode Miller | FUTURE ∫13
“I have complete
confidence
in Superfund”
An interview with Alpine Skiing World Cup superstar Bode Miller
FUTURE: Bode, you have been part of the Superfund sponsoring program for some
time now. Has this also been successful for you personally?
Bode Miller: And how! Back when Superfund first approached me, I decided
to invest my own money in its funds. I took a really careful look at the
philosophy and strategy of Superfund, and there were two things that really
impressed me: the logic of automatic trading systems, and the incredibly
broad diversification among so many different markets. It’s got a coherent
strategy with a great track record, and that was important to me.
So has this investment paid off for you?
(laughs) Yeah, it’s been great, it’s been
performing really well. At the beginning,
the markets were strong, everything was
going fine – I was just looking for a good
investment. But then, as the markets
starting having real problems, I was
amazed at how quickly Superfund was
able to react.
Bode Miller
about money. But I’ll say this: Thanks to
Superfund, I’m making profits.
Do you regularly check the price on the
internet?
Sometimes, but I wouldn’t say regularly. I
don’t really stay 100 percent up-to-date –
but I’m not worried.
But all the same, it’s your own money.
Bode Miller is one of the most successful and charismatic
downhill ski racers of all time. The American from New
Hampshire has already chalked up 31 World Cup victories,
including two overall winner titles, and has four world skiing
championships under his belt. For the past two and a half years,
he has been delivering yet another brilliant performance, this
time as an investor and celebrity endorser of Superfund.
What percent have you earned since then?
GEPA
It’s going just fine. I don’t want to say any
more than that. I don’t really like talking
The Superfund trading systems have been
working perfectly for 12 years. I have
complete confidence in my investment.
14∫ FUTURE | Interview: Bode Miller
∫15
3With his uncompromising
downhill race style, Bode admits:
“My goal is the same as every
year: To not hurt myself.”
What parallels can you draw
Biography
between business strategy, like
that of Superfund, and worldclass athletic competition?
BODE MILLER CELEBRATING HIS
WORLD CUP VICTORY WITH SUPERFUND
Bode Miller entered the world on October 12th,
1977. He and his three siblings were raised by
their hippie parents in a log cabin without
electricity or indoor plumbing, in the heart of
New Hampshire’s ski region. His fast and
unorthodox downhill style brought him to the
public’s attention in 1996, winning him a place
on the U.S. Ski Team. Since his first World
Cup competition in the 1997/98 season, Bode
has claimed victories in every discipline.
It sounds a bit abstract to
compare a big company
with an athlete. But there
are some really good
parallels. Superfund has
to think just like an
athlete. Studying the
competition
is
crucial – whether
it’s out there in the
market, or in my
case, up on the ski slopes.
What are
they doing? Is there something that I’ve
overlooked? And of course, then there’s
what really drives us: The hunger to win
– to be better than the others, and to
constantly learn from our mistakes.
If there’s a ski
champion who really
knows how to party …
… then it’s Bode Miller. His motto,
and the title of his book, is: “Go
fast, be good, have fun.” In the
past,
GEPA
GEPA
5Bode and his RV: Despite all his successes, he
prefers his motorhome to any luxury hotel.
A Success Story
World Cups
Winner
- Overall 2008
Winner
- Combined 2008
Second
- Downhill 2008
Winner
- Super-G 2007
Third
- Overall 2006
Second
- Combined 2006
Winner
- Overall 2005
Winner
- Super-G 2005
Second
- Downhill 2005
Winner
- Giant Slalom 2004
Winner
- Combined 2004
Winner
- Combined 2003
Second
- Overall 2003
Second
- Giant Slalom 2003
Second
- Slalom 2002
World Championships
Gold
- Downhill 2005
Gold
- Super-G 2005
Gold
- Giant Slalom 2003
Gold
- Combined 2003
Silver
- Super-G 2003
Oh, I relaxed a bit, took some time off –
and then I got back to training. Actually,
I’ve been doing everything with the people
in my team just like always. We’ve only
changed a few minor things.
Who are your toughest competitors? The
Did you have time in the early summer
usual suspects?
to follow the Euro 2008 championship in
Yeah, you could say that. There’s AkselLund Svindal, who dropped out last season
because of injury. He’ll be back this
season. And of course there’s Benni Raich,
as always.
I hear you’ve been
Oh yeah, I followed the Euro championship.
Unfortunately not in person – but at least
the TV coverage here in the U.S. was very
good.
Did you get to watch the Austrian team play?
training intensively
for slalom again. This
discipline used to be
your claim to fame,
but over the past two
Of course. And I have to say, they played
better than I expected. The Austrians
performed very well in all three games. I
was pleased to see that.
years, it hasn’t been
what it once was.
You also have a home in Tyrol, deep in the
That’s true. But I see slalom as more of a
long-term project. My priority this season
is to win overall in the World Cup, and
I’m putting everything into that. And at
the end, I want to be proud of my
performance.
our country?
How is your golf game going? Were you able
Can we expect you to show up in your RV
to improve your handicap over the summer?
again at the next World Cup?
(laughs) Unfortunately not. I didn’t have
time to play much golf – or tennis either
for that matter. I feel bad about it, but my
schedule has just been really full. So no,
my golf handicap is still not where I want
it to be.
For sure. That’s something I’m not going
to change. I’ve got a way of life that I love,
and I’m not about to throw it all away.
It was some time ago – back in the spring.
I’ve been mainly in New Hampshire since
then, and my travel schedule keeps me on
the road in the U.S. a lot.
What are your personal goals for the coming
season?
My goals are basically the same, only this
year we also have the world championships
in Val d’Isere. But I want to take another
shot at winning overall in the World Cup,
no question about that.
morning in the world’s most
5 The raffle: Bode personally hands out the prizes
2008 Alpine Skiing World Cup, he
Austrian Alps. When was your last time in
Cup, what have you been doing?
celebrated
victory as overall winner of the
Yeah. To have a vision of what you want,
to keep an eye on the competition, and to
strive to be better at the end of the day.
Winning at sports means a long-term
commitment
to
improving your body
“I was excited about
and to achieving your
Superfund from the
personal best. And
very start, and my
Superfund also tells
personal investment
its customers to
is solidly in the plus.”
invest for the long
term.
Since your second overall victory in the World
has
famous ski resorts. But for his
Austria? You’re still a big soccer fan.
So, the philosophies are similar?
Bode
victories into the wee hours of the
chose to celebrate with Superfund
USA in the New York office. Some
100 guests came to congratulate
this world-class athlete, who has
been part of the Superfund
sponsorship program for the past
two and a half years. A portrait of
Miller was auctioned for USD
1,000. The proceeds will be
donated to the Turtle Ridge
Foundation, Bode Miller’s charity
to help needy children and local
communities.
5With Paul Wigdor, country manager of Superfund USA
6Bode drawing the raffle winners with a Superfund employee
16∫
Did you know ...
Michael Covel
T
… that some 26 million
bales of cotton
are traded each year?
he first half of 2008 will go down as a memorable one for trend following
traders. Those traders, ready to react to big (and unexpected) trends, were
paid handsomely for their speculative skill and made fortunes. That’s right I said,
“speculation.” It is not a four-letter word after all.
One well-respected hedge fund manager I talked
Do you really want to trust that type of advice?
to recently who has extensive experience in the
industry, sees speculation in stark, but simple
At the end of the day instead of trying to assemble
terms: “Every bet that we make involves a trade-
all of the fundamental analysis (i.e., Cramer) that
off based on a decision
purports to tell you why
to pay or risk something
and what the price is
of value (time, money,
emotional involvement,
That’s enough to produce
5.6 billion pairs of jeans.
a bunch of bananas) for
“‘Speculation’ –
It is not a four-letter
word after all.”
doing, why not follow the
price from the beginning
and make buying and
selling decisions based on
the uncertain prospect
of gain. Placing winning bets in investing, as in
supply and demand? Better yet, why not ask
life, therefore requires the development of a
yourself the three questions all great speculative
strategic ability to make better bets (i.e., critical
traders ask:
tradeoffs) between and among financial and nonfinancial outcomes. Where most of us tend to trip
What can I win?
up, often unwittingly, is when we fail to grasp the
What can I lose?
complete extent and true nature of the tradeoffs
What are the probabilities of each outcome?
implicit in what always come down to choices.”
Those are the basics of great money making in
So how do great traders speculate for profit?
the markets! Trend following traders always
They technically ‘react’ to market moves. Instead
answer those three questions, but they take it a
step further. Great trend traders answer these five
of trying to predict a market direction, these
traders make decisions based on what has
happened rather than anticipating what will
happen. They keep their strategies based on
statistically validated rules. This enables them to
focus on the market’s movement and not get
Cotton
emotionally involved.
Fotos: Dreamstime.com
The earliest known cultivation of cotton was in
Mexico some 5,000 years ago. However, it was not
until the ninth century A.D. that cotton found its way
to Europe, and another six centuries went by before
it was finally used to make cloth.
Cotton textile production really took off with the
Industrial Revolution, particularly in Britain and
Flanders, as a result of inventions such as the spinning
machine and the mechanical loom. In more recent
times, we have seen huge increases in agricultural
productivity, with yields per hectare having nearly
doubled since 1970. Despite competition from a wide
range of synthetic fibers, 44% of the world’s textile
fiber requirements continues to come from cotton.
However, the sad truth is that for most people,
Jim Cramer (host of the “Mad Money” TV show
on CNBC) and his nightly fundamental “calls” is
still the advice that “sounds” most credible. Why
not buy into Cramer’s Mad Money advice every
3A bale of cotton. The
rules are strict: A bale
like this must weigh
500 pounds (226.8 kg)
and have a volume of
0.48 m3.
night? There are problems. Remember when
Cramer said there were no problems with Bear
Stearns and then the firm essentially went under?
trading system questions at all times:
What is it the state of the market?
What is the volatility of the market?
What is the equity being traded?
What is the trading orientation?
What is the risk aversion of the
trader?
The next time you hear a talking head
make a prediction or forecast, pause and
consider those five questions. I can
guarantee you that those traders who
make the big money answer those five
questions everyday at all times.
Michael W. Covel
The Founder and Head of Trend Following™, Michael Covel is a recognized expert on successful
trend investing and its most successful practitioners and has served for the past decade as an
advisor on trend following strategies to traders, hedge funds and banks.
18∫ FUTURE | Van Gogh Reloaded
Van Gogh Reloaded | FUTURE ∫19
A Unique SUPERFUND EVENT
Even before the official opening of the new Van Gogh exhibition, selected
Superfund customers were invited to an exclusive preview event by
Superfund Austria, TeleTrader Software AG (an investment data and
Van Gogh
Fishing Boats on the Beach at Saintes-Maries-de-la-Mer © Van Gogh Museum Amsterdam (Vincent Van Gogh Foundation)
software company owned in part by Superfund Founder and Owner
RELOADED
A
msterdam comes to Vienna. The Albertina, cultural partner of Superfund
Austria, is displaying 150 works this fall by one of the greatest artists of all
time,Vincent Van Gogh, in the most expensive art exhibition ever seen in Austria.
For the first time in over 50 years, the
works of Vincent van Gogh will be shown
in Austria in a world-class exhibition.
Klaus Albrecht Schröder, director of
Vienna’s internationally renown Albertina
museum, has spared no effort or expense
in arranging for masterpieces from over
60 leading institutions to be temporarily
brought to Vienna in cooperation with
Amsterdam’s Van Gogh Museum. Never
before has so much money been spent in
Austria for a single exhibition.
Art lovers can come to the Albertina
to feast their eyes on 50 paintings and 100
of the most significant watercolors and
drawings by Van Gogh from September 5th
through to December 8th. The exhibition
draws particular attention to the extent to
in the final two years of his work in the
which the characteristic brushwork of
south of France. Van Gogh was painting to
Van Gogh’s paintings
a greater extent
was influenced by his
under the blazing hot
Austria’s greatest van
expressive drawing
sun of Provence, and
Gogh exhibition in 50 years the intensity which
technique. Van Gogh
has been insured for
originally wanted to
he himself felt was
around three billion euros.
be a draftsman and
reflected even more
illustrator, but in the
so in the intensity of
end, it was as a
his paintings. The
painter, with his rich use of colors, that
purity of his rich colors marked a radical
Van Gogh made his mark and became
break from the brown tones of the salon
such a formative influence on the art of
painting styles which preceeded him.
his time.
With this exhibition, the Albertina
After his move from Holland to Paris
sheds new light on the life and work of
in 1886, the colors of Van Gogh’s palette
Van Gogh, and on the close relationship
became lighter, reaching their culmination
between his paintings and drawings.
Christian Baha) and Albertina director Klaus Albrecht Schröder. Following a
welcome aperitif, Schröder joined Helmut Spitzer (country manager of
Superfund Austria) and Roland Meier (CEO of TeleTrader) in greeting the
guests, who were then conducted on a special tour through the Albertina
for a first glimpse at some of the 150 works by the legendary Dutch artist.
The evening ended with a gala dinner in the historic halls of the Albertina.
6 Starting off the evening in style with an aperitif.
6Left to right: Roland Meier (TeleTrader), Helmut Spitzer (Superfund) and
Klaus Albrecht Schröder (Albertina) welcome the guests in the Audience Room.
Special Delivery
The most famous of Van Gogh’s works: The “Self-Portrait with Straw
Hat.” The high cost of transporting this portrait to the Albertina, using the
tightest security measures, was supported by Superfund Austria.
6 The select group of guests included bank CEOs
and major institutional investors.
Self-Portrait with Straw
Hat © Van Gogh Museum
Amsterdam (Vincent Van
Gogh Foundation)
20∫ FUTURE | Superfund Superstars
Superfund Superstars | FUTURE ∫21
Dinko Jukic, Christian Ba
ha, Mirna Jukic
uperfund
uperstars
S
ports and culture have the ability to transcend barriers and appeal to
the masses. As such, the Superfund sponsorship program is a reflection
of the brand’s core ethic:Whatever the forum – stage or stadium – winning
requires a great deal of hard work, and the ability to handle setbacks. In
this article, FUTURE introduces you to some of the talented partners on
the Superfund sponsorship program.
Mirna & Dinko Jukic
AUSTRIA’S CHAMPION SWIM PAIR
Sybille Bammer
TOP-RANKED TENNIS PLAYER
Patience brings rewards. Adam
Malysz was a consistently successful ski
jumper for a long time, but in the end, it
was his unshakeable determination that
made him a champion. His first great
victory was the Vierschanzentournee,
the “four hills tournament” near Munich,
in 2001. Today, the 30 year old Polish
athlete can lay claim to no less than 38
World Cup victories, four world
championship titles, and two Olympic
medals. With his personal best of 225 m,
Adam Malysz is one of the world’s topranked ski jumpers.
GEPA
“A champion always
knows how to win.”
Sarah Smith first learned to dance at
the Joffrey Ballet School in New York.
Following her graduation from the
University of Indiana in ballet
performance and nutritional science, she
made her debut as a guest dancer with
the Boca Ballet Theater in “Progression”,
“Flower Festival,” and as the Sugar Plum
Fairy in “The Nutcracker.” In 2004 she
joined the American Ballet Theater in
New York, where her performances have
been sponsored by Superfund USA since
2005. The partnership has been a
resounding success.
“Alongside Superfund,
we are able use this fine
art to promote culture.
I am forever grateful to
Superfund for their efforts.”
Herbert Prohaska
AUSTRIAN SOCCER STAR
In his career as a soccer coach, Udo
Lattek won everything there was to win.
He brought FC Bayern Munich eight
National Championship titles and has
another three European Championships
to his credit, including one as coach for
FC Barcelona. Today, Lattek, now 73, is
a popular television commentator and a
frequent guest on sports programs. He
began his soccer career as a player for
various German teams including SSV
Marieneide, Bayer Leverkusen and
Osnabrück, where he remained until
1965, scoring 34 goals in 70 games.
Herbert Prohaska was named
Austria’s “soccer player of the century”
after a successful career at top clubs
Vienna Austria, Inter Milan and AS
Roma. While playing for Rome, he
helped win the Italian “Series A”
championship. In 1998, Prohaska went
on to lead the Austrian team as its
manager at the World Cup championship
in France. In recent years, Prohaska has
been a popular commentator on Austrian
television. He now also “plays” for the
Superfund team, whose logo is
prominently displayed on his jacket
during most games broadcast on TV.
“The key is to field a
balanced team – and to
get them to work as one.”
“I’m invested in Superfund
because I’ve been winning
with this team for years.”
Beijing Olympic bronze medal
winner, Mirna Jukic, is Austria’s most
successful woman swimmer of all time.
In her career so far, the 22 year old
Croatian-born athlete has won the
European Championship four times and
holds 13 Austrian records. Alongside her
successful sports career, Jukic is pursuing
a degree in business studies so that she
has a professional career to look forward
to when her swimming days are over.
Mirna first started swimming under
Superfund colours in 2002, when she
was named Austrian Sportswoman of the
Year. Since 2008, another member of
the Jukic family has joined the Superfund
sports sponsoring family: Mirna’s brother
Dinko, who has already broken four
Austrian records in his promising young
swimming career.
“I’m invested in Superfund
because I also like to
win outside the pool.”
GEPA
Adam Malysz
SKI JUMPING WORLD CHAMPION
Udo Lattek
TOP GERMAN SOCCER COACH
DSF
“I’m invested in Superfund
because it’s been the
most successful doubles
game of my career.”
Sarah Smith
BALLET STAR
Sarah Smith in Sylvia. Foto: Rosalie O‘Connor.
Sybille Bammer began playing tennis
when she was eleven years old and went
on to realize her childhood dream in
Pattaya, Thailand, winning her first WTA
tournament in 2007. While Bammer’s
successful WTA career was put on hold
in 2001 until after the birth of her
daughter Tina, she quickly managed to
ace her way back into the professional
tennis world, chalking up nine victories
on the ITF circuit. Bammer gained
attention in the Grand Slam competitions
in 2007, reaching the fourth rounds in
both the U.S. Open and the French
Open. In 2008 she took her game a step
further, managing to reach the quarterfinals of the U.S. Open – her greatest
triumph so far. Sybille Bammer has been
cooperating with Superfund since 2004.
One
One Mile Report: Vienna | FUTURE ∫23
Mile
Report
vienna
T
Helmut Spitzer
Country Manager
Superfund Austria
here is so much to enjoy in Vienna:
A theatrical performance in the
famous Burgtheater at the Imperial
Palace. Dinner in the gourmet
restaurant of the Coburg Palace. A
traditional Viennese Einspänner coffee
in the nineteenth-century grandeur of
Café Landtmann.
So many choices. Whether you want
the opulence of Vienna’s imperial past, the
refinement of its coffee houses, or the
coziness of a warm tavern. You can find it
all within one mile of the Superfund
investment center right in the heart of the
historic Austrian capital. It is my pleasure
to introduce you to some of the most
beautiful places Vienna has to offer!
VIENNA
18 LOCATIONS AROUND THE GLOBE
You can find Superfund investment centers around the world.The network of Superfund offices has expanded to include Amsterdam,
Chicago, Dubai, Frankfurt, Grenada, Hong Kong, Liechtenstein, Luxembourg, Monaco, Montevideo, New York, Paris, São Paulo,
Singapore, Stockholm, Sydney, Tokyo, Vienna, Warsaw and Zurich. In this issue, we focus on Vienna, whose slogan for promoting
tourism is: “Wien ist anders” – Vienna is different. Different because of its imperial past, and stunning array of sights to see.
Different because of its incredible wealth of art and culture. But Vienna has also achieved international acclaim for its culinary
delights. Whether it be a gourmet meal in an opulent palace, or a coffee with a piece of chocolate Sachertorte in a grand old café,
gourmet cuisine has always held a special place in the hearts of the Viennese. Here are a few highlights of the many delights to be
discovered within just one mile of our Vienna investment center.
24∫ FUTURE | One Mile Report: Vienna
∫25
Fabio’s
Restaurant Coburg
Right beside the Superfund office,
the Kornat offers a superb selection of
expertly prepared fish specialties. This
streetside restaurant with its stylish glass
veranda brings mediterranean flair into
the heart of Old Vienna, with fresh
ingredients, carefully selected wines,
and attentive service to put a smile on
your face. For those who prefer lighter
cuisine of the finest quality, a visit to this
jewel of a restaurant is not to be
missed.
Fabio’s lies at the heart of Old Vienna,
just around the corner from the stunning
baroque beauty of St. Peter's Church.
This upscale Italian restaurant makes a
stunning first impression with its
modern, stylish interior. The use of rich
dark woods creates a pleasant, refined
atmosphere, while its mediterrenean
cuisine is a delight to the palate. The
adjoining bar6j\VgiZc
is popular throughout the
day, and in its well-stocked cellar, Fabio’s
offers an excellent selection of fine
Italian and Spanish vintages.
Vienna’s historical Coburg Palace has
been home since November 2003 to the
Palais Coburg Hotel Residenz, with its
35 suites, nine banqueting rooms, and
famous gourmet restaurant, as well as to
the Institute for Strategic Capital Market
Research (ISK). With its Restaurant
Coburg, the Coburg Wine Bistro and its
magnificently appointed rooms, the
Palais Coburg offers a wide range of
dining opportunities with the right
atmosphere for any occasion. Chef
Christian Petz prepares his superb
creations to delight the taste buds,
supplemented by a wine cellar stocked
with some 3,000 bottles from the
world’s finest vineyards, including
vintages dating as far back as 1795. For
wine connoisseurs, rare examples of the
famous Coburg wine archive are available
for purchase.
‣‣ Marc-Aurel-Straße 8, 1010 Vienna
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vies with the Hawelka and the Café
Landtmann for first place in this city
famous for its traditional coffee houses.
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love for the stage. The Theater even developed
Café Landtmann
its own elegantly spoken version of German
world. Along with the State Opera House, it is
dialect, called “Burgtheaterdeutsch.” For rising
In 1873, Franz Landtmann opened
Vienna’s largest and most elegant café,
thus creating an institution that is as
strong as ever today.
regarded by the Viennese as one of the great
Austrian actors and actresses, it is considered
cultural icons of their city. The Burgtheater
a “must” to have tread the boards on-stage at
takes its name from the adjacent Hofburg, the
the “Burg.”
always been a source of delight and civic pride
Dr. Karl Lueger-Ring 2, 1010 Vienna
‣‣ Dr.-Karl-Lueger-Ring 4, 1010 Vienna
‣‣ Distance: approx. 0.6 miles
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Imperial Palace, and for the cultured set, it has
The Vienna Stock Exchange is one of the oldest
in the world. The former exchange building in
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Vienna’s prestigious Ringstrasse (photo) is now
with yet another of Vienna’s most prestigious
privately owned. Since 2000, the Exchange has
cultural institutions: the Albertina. The reputation
enjoyed new headquarters in the Palais
of this world-class art museum extends far
Caprara-Geymüller. In 1999, the Vienna Stock
beyond the borders of Austria. With over 70,000
Exchange was privatized as “Wiener Börse AG”
drawings and more than a million prints, the
and is now owned by more than 60 banks and
Albertina has one of the world’s largest, most
institutions.
valuable art collections.
Exchange has been fully electronic.
Albertinaplatz 1, 1010 Vienna
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sponsoring. Founded by the Empress Maria
theatrical venues in the German-speaking
Albertina
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were favorite topics for the Viennese. Its
audiences brought together people from
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and scandals surrounding its star performers
this was a major step into the world of cultural
different levels of society bound by their mutual
PA R T N E R O F T H E A L B E R T I N A
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opened in the nineteenth century, the rumors
partnership with Vienna’s grand Burgtheater,
the
Distance: approx. 0.6 miles
www.albertina.at
Albertina, Vienna (Photo: Helmut Engelbrecht)
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Restaurant Kornat
S P O N S O R O F T H E W I E N E R B U R G T H E AT E R
Café Central
Café Landtmann
Palais Coburg, Fotograf: Franz Zwickl
Burgtheater
Since
1997,
trading
Schottenring 16, 1010 Vienna
Distance: approx. 0.4 miles
on
the
26∫ FUTURE | Interview: Nouriel Roubini
Interview: Nouriel Roubini | FUTURE ∫27
“This RECESSION is
going to get much more
severe and sharper.”
Nouriel Roubini
FUTURE: Let’s start with some of your current views on the U.S. economy?
Nouriel Roubini: I am still very pessimistic both about the U.S. economy
and about the outlook for financial markets and for credit losses. We will
have a recession that will last 12-18 months, at least.
So the point is we are in a recession and
my view is that this recession is going to
be much more severe and sharper and
deeper then the previous two which lasted
only eight months.
Depression, and when will it bottom out,
which I think will not happen until
September 2010, and I expect by that
point, housing prices will have fallen 30
to 35%. That has two effects. One is the
wealth effect and the other is the negative
kind of equity for households in their
homes. I’ve estimated up to 21 million
households out of the 51 million with
mortgages could be “underwater” and may
walk away. I’ve also estimated that this
walk away phenomenon might lead to
losses for the financial system of 1 trillion
dollars alone.
Why do you think this recession will last longer?
One is the fact the U.S. consumer is on
the ropes, saving less, and faced with the
shocks I mentioned before. Two, is the
worst housing recession since the Great
Thirdly, I think it involves consumer credit
in the form of credit cards, auto loans,
student loans, and leveraged loans. But it’s
also many municipalities that are going to
go into default because of their fiscal
problems, and the corporate sector which
due to the subprime pain has a lot of debt
and is borderline not profitable. So the
default rate on municipal and corporate
bonds is going to sharply spike.
So, when you add up all these credit
losses, the prediction of one trillion USD
is just the floor, not the ceiling, and the
losses are going to be closer to two trillion
USD.We have a systemic financial problem
with hundreds of smaller banks that could
go bankrupt. Typical small U.S. banks
with less than four billion USD in assets,
have 67% of all their assets in real estate.
They could go bust because of the real
estate bust. This could also affect mediumsized banks, and even some of the larger
banks. We’re really seeing something that
we’ve not seen in a very long time.
Nouriel Roubini
Name an important business university and chances are, the Turkish born
financial expert, Nouriel Roubini knows the campus – either as a student at
Harvard, a faculty member of Yale, or a guest speaker anywhere else. In 2006,
he predicted one of the biggest housing crisis in history – now, in 2008, we’re
right there and Nouriel Roubini has some more predictions to offer.
AP (Foto: Mark Lennihan)
Right now consumers are hit by the falling
value of their homes, there is a credit
crunch, you have not only high debt ratios
but also high debt servicing ratios,
recessive mortgages, credit cards, auto
loans, student loans, you have consumer
confidence plunging.
28∫ FUTURE | Interview: Nouriel Roubini
Interview: Nouriel Roubini | FUTURE ∫29
commodities are going to have a cyclical
fall of 20–30%, mostly because of global
falling demand during a global slow-down
or recession. On top of the reduction of
prices due to fundamentals, you’re going
But the most important thing that has to
to have some unraveling of the demand
happen, is whenever you have a situation
for commodities for speculative reasons.
of unsustainable debt burdens, whether
We’ve already seen that with oil prices
they are those of a government, a
falling. Within the
corporation, or an
different commodities
individual, you have
of course, demand
to reduce debt.
“I think trend
and supply, in the
Millions of U.S.
following strategies
short run and medium
households can’t pay
often tend to work.
run are different.
their
mortgages,
It can be something
Demand for food is
their credit cards,
that gives you
elastic and because it
their student loans
superior returns.”
is a staple, price falls
or auto loans. So you
might be less. Even in
need across the
a recession people need food, so food
board debt reduction. Now the first step
prices might not fall as much. And
has been taken in that direction but there
because the supply response for food can
is much more that should be done.
be faster, say than oil which takes 5–10
Isn’t the reliance on debt kind of embedded
years for exploration, drilling, pipelining,
now into U.S. culture, and is it the same in
refining – the price increase can be
other parts of the world?
smaller.
fiscal stimulus, we’re going to see the
process of the bailing out of some of our
distressed borrowers and lenders.
REUTERS
Biography
1958: Born in Istanbul, Turkey
1982: BA summa cum laude in Economics
– Bocconi University, Italy
1988: Ph.D in Economics at Harvard
University
1988-95: Faculty member – Economics
Department at Yale University
1997: Co-Author of the book, “Political
Cycles: Theory and Evidence”
1998-99: Senior Economist for
International Affairs at the White House
Council of Economic Advisors
1999-2000: Senior Advisor to the
Undersecretary for International Affairs at
the U.S. Treasury Department
2004: Launches RGE Monitor, an
economic and financial analysis firm
2004: Co-Author of the book, “Bailouts or
Bail-Ins? Responding to Financial Crises in
Emerging Economies”
2006: Publishes several pieces on RGE
Monitor warning of the “upcoming ugliest
housing bust ever”
2008: Publishes the “Twelve Steps to
Financial Disaster” scenario warning of a
possible systemic financial crisis
What do you think the economic powers
around the world can do to get out of the
recession and move towards recovery?
At some point, the dynamic here,
regardless of policy, is the bottoming of
the recession, that contraction is going to
slow down, and the economy is going to
recover. But strictly on the policy side, I
see the Fed easing even more. I certainly
don’t see them hiking rates. I believe that
inflation is going to be the least of the
problems. We’re going to see further
The saving rates of the housing sector is
close to 0% in the U.S., while China it’s
close to 30%, and throughout Asia saving
rates are also high. Those households are
now starting to get credit cards and
mortgages and other things, but there’s
no comparison. The U.S. is really the one
country in the world that actually has
negative household equity.
What’s your longer term outlook on the U.S.
and global economy?
My longer term outlook is much more
positive. I think that most of the growth
is going to come from the emerging
markets. So, you can be bullish about the
medium-term economic outlook of the
global economy. You can also be bullish
on commodities, because of the imbalance
between supply and demand, over the
medium term of 5–10 years. However, in
the very short run, 6–12 months, it’s
going to be ugly for the U.S., and for rest
of world.
When you talk about commodities, do you
break it down to individual commodities. Do
you have specific views on oil or gold?
My view is that, in the short term, all
In the medium run I’m bullish on oil
because once the global economy goes
back to potential growth, and this
potential growth is going to be driven by
the Chinas and Indias of the world that
are urbanizing, and as they urbanize they
are going to increase demand for gas as
their car use is going to go up. So demand
is going to grow roughly at a faster rate,
while supply unfortunately is coming
from a bunch of unstable petrol states,
which I’m not sure are going to make
enough
investment
in new production and exploration.
Countries like Nigeria, Venezuela, Iran
and Iraq. You have to worry about where
the extra supply of oil is going to come
from. I think this is a major problem.
How should investors take advantage of the
current economic situation? Is there anywhere
you would put your money?
Inflation indexed bonds, even fixed
income, and governments may have
upside potential. In the next 6–12 months
I’m worried about every type of risky
asset. I believe U.S. and global equities
have downside risk, I believe commodities
have downside risk, and I believe credit
spreads are going to widen even farther.
No Countdown – The National Debt Clock
“Debt reduction is the
most important thing
that has to be done on
a wholesale basis.”
3 On October 8th 2008, the famous National Debt Clock at
West 44th Street in New York ran out of digits – the ‘$’-sign
has been changed to a leading ‘1’ until 2009 when the clock
will be replaced by a new one, to be “safe for the future.” The
National Debt Clock is a live display of the U.S. debt. The
current amount of total debt can be found anytime on the
website www.brillig.com/debt_clock/.
You’d invest in other currencies than the USD.
Yes, I would diversify away from the
dollar into some of the Asian currencies,
even maybe some of the Gulf States as
they move away from the U.S. dollar in
the next 6–12 months.
Most retail investors don’t have exposure to
the short side of the market or are able to
invest in a product that has long and short
exposure.
Yes, and that’s really crucial at this stage.
If you cannot “short” you have to reduce
the allocation of those riskier investments
and increase more cash. If you have the
opportunity of shorting some investments,
that’s important. That’s what sophisticated
investors do, of course.
The Superfund trading strategy is based on
trend following principles and herd behavior
in the markets. What is your view on trend
following strategies?
I think they often tend to work. It
depends very much on the model that
one uses. It can be something that gives
you superior returns, though highly
volatile traditional models sometimes
break down because historical correlations
don’t work. But with trend following and
momentum and those things, there is
some evidence that those strategies tend
to work.
What we’ve seen are that some trends
are more pronounced when equities are
underperforming. Have you seen that as well?
What I’ve seen recently, is that while
there may be some trends, there’s also
been a huge amount of volatility in both
directions which makes things very, very
“noisy.” So you have to follow and capture
the medium-term trends, and not worry
too much about the short-term noise.
Sometimes in currencies, sometimes in
commodities, sometimes in other asset
classes, changes in the economic
environment, like meaningful economic
contraction, often leads to persistent
movements of asset prices in a certain
direction, with a lot of noise, but
proceeding in a certain direction. So, if
one is able to capture those trends,
definitely there is room for exploiting
those movements.
That’s precisely the Superfund strategy, which
is offering access to medium- and long-term
trends in markets through managed futures, an
asset class that is not correlated to equities.
That’s crucial, really. Things that are not
correlated to equities should be part of a
well-diversified portfolio. Absolutely.
Useful tip
how to set up an optimal portfolio
“Things that are not correlated to equities should
be part of a well-diversified portfolio. Absolutely.”
International financial experts, like Nouriel
Roubini, agree that diversification is the key
factor for protecting capital in a portfolio. An
investment needs to combine many different
markets and asset classes, which, as far as
possible, move independently from each other.
This allows the investor to hedge against slumps
in individual markets or asset classes and also
means the portfolio can profit from both rising
and falling markets. This is the same investment
strategy used by all Superfund products.
30∫ FUTURE | Superfund News
Superfund News | FUTURE ∫31
SUPERFUND JOINS EU PANEL ON
uperfund News
FINANCIAL EDUCATION
W
ith Superfund companies around the globe there is a great
deal of news to report. With many activities extending
beyond the world of investment, Superfund companies are
particularly active in terms of commitment to sports and culture.
FUTURE is proud to bring you some of the highlights of recent
months from around the world.
In August, Markus Weigl
(Director
of
product
development at Superfund)
was invited to join the
European
Commission’s
Expert Group for Financial
Education.
“Educational
activities are a key factor
in long-term investment
REASSURING WORDS
Markus Weigl, Superfun
d
success as well as in
building
FROM DR. BUSCH
investor
trust.
The goal of Superfund companies is to overcome investor fears in order
to make alternative investments, such as system-traded funds, an integral
component of investment portfolios for the general public. With a seat on
this EU panel for financial education, we can work together with other
European fund managers to close the knowledge gap within the EU
investment sector.”
Financial expert Dr. Friedhelm Busc
h
MOVING INTO THE MAJOR LEAGUE
New Field for France
Following on from the successful partnership with Pasching-based FC
In May, Superfund France took to a different kind of playing field, by
Superfund, the Superfund sponsorship program is now moving into the
sponsoring its own polo team for the “Tournoi de la Ville de Paris” (the
During times like this, investors turn to market
Austrian football major league. For the next three years, the managed
Paris polo tournament). The players pitched in courageously against the
experts for advice, and one of the most well-
futures fund provider has pledged support to the up-and-coming SV
professional teams to ensure a thoroughly enjoyable experience for both
known and trusted of these on German
Kapfenberg team. Now appropriately renamed “KSV Superfund”, the
the Superfund VIP guests and employees. All-in-all, the tournament was
television is Dr. Friedhelm Busch. He recently
eastern alpine team continues to fight its way up the national league
a huge success in terms of strengthening existing client relationships and
tables with the Superfund logo on its shirts.
expanding the Superfund Paris network.
went on tour with Superfund Germany,
ADAM MALYSZ GOES TO WALL STREET
working his way through Hamburg, Berlin,
Frankfurt, Stuttgart and Munich, and managed
This summer, Poland’s ski jump champion
to calm frightened investors with his optimism
Adam Malysz was the Superfund guest of
and wit. In his decades as a financial journalist,
honor at the Wall Street Conference – not in
Dr. Busch has weathered more than one
New York City but in the Polish ski resort of
storm in the market. At the end of each talk,
Zakopane. Malysz, Olympic medalist and four-
investors took advantage of the opportunity to
time world ski jump champion, happily signed
question Dr. Busch and hear his investment
autographs and posed for pictures with
tour is available on DVD, exclusively from the
Superfund Germany office.
nd
nd
m left) with Superfu
Adam Malysz (2 froyslawski (left)
Country Manager Br
conference attendees. The event, organized
by the Polish Association of Individual Investors,
Superfund polo team in full swing
was a resounding success.
GEPA
tips. And for those who missed it, the entire
KSV Superfund
32∫ FUTURE | Superfund News
∫33
Superfund Office opens in Chicago
WARNING
es
In spring of 2008, Superfund USA
n do
This colum
e views
not reflect th
und, its
of Superf
pets or
employees,
ing.
any living th
cracked open the champagne to
celebrate the opening of the new
investment
center
in
Chicago.
Superfund Chicago officially opened its
doors in April, inviting customers to an
exclusive wine tasting. The event was
It’s
clearly a success during which time
customers and the press were offered
a sneak preview of the new offices.
Disclaimer Mania
Superfund USA sales
Manager Paul Wigdor managers with Country
(right)
Larry Reno
official. Warnings and legal disclaimers are such a part of
everyday life that we’ve now reached “Disclaimer Mania.” Don’t get me
wrong. I appreciate those warnings that really help, like, “Sharks have
been spotted. Do NOT go in the water!”. What I don’t appreciate are
warnings and legal disclaimers that a) insinuate that we are not capable
of thinking for ourselves, b) allow us to shirk personal responsibility, and
c) aren’t applied equally. Nowhere is this more prevalent than in our
industry. My favorite financial disclaimer? “Past performance is not
indicative of future results.”
In other words, just because it was sunny yesterday, doesn’t mean it will
be sunny tomorrow. Thank you. I appreciate the warning. We’ve also
gotten to the point where if something doesn’t carry a warning, or even a
proper warning, we no longer have to be responsible. Let’s go back to
Ballet in TokYo
the shark scene: A man cries, “I didn’t hear the screams, and I wouldn’t
know a shark fin from a dolphin fin. Just because everyone was running
forming in Tokyo
erican Ballet Theatre per
out of the water screaming, how did I know not to dive in? There should
Am
have been a sign to warn me!” – “But sir, there was a sign.” – “I didn’t see
it. It should have been bigger. I’d like 5 million USD please.”
In my opinion, the current glut of warnings and disclaimers are creating
Markowitz in center stage
“victims,” not responsible people. Finally, some financial sectors are
treated differently than others. In the U.S., managed futures funds have a
proven 50-year history but are required to prominently display more
Hong kong glitters with Gold
Nobel Prize laureate Harry Markowitz, now 80, is still on top form – and in
warnings and disclaimers than a dog has fleas. Meanwhile, America
center stage. In February of this year, Professor Markowitz led a Superfund
faces a subprime mortgage crisis, home owners are defaulting in record
video conference to discuss his famous portfolio theory which has
numbers, and consumers have incurred the highest credit card debt in
revolutionized the world of investment. Udo Lattek, one of the most
U.S. history. Yet, lenders and credit card issuers bury their risks in small
successful football coaches of all time, joined the conference in Frankfurt,
print and continue to lure customers with more enticements than a
enlivening the conference with anecdotes from the world of sports.
sideshow barker at a cheap carnival.
Superfund clients in Tokyo were treated to an
But it’s not just the financial world that suffers from “disclaimer mania.”
exclusive all-star gala performance by the
Partners and friends of Superfund Hong Kong
world-famous American Ballet Theatre on
were invited to an exclusive special event,
18th July. And once the curtain came down
with guests including Martin Glatz, the Austrian
following sign: “Warning: This package may contain traces of nuts.” I was
on the dance extravaganza, our guests had
Trade Representative to Hong Kong, and the
eating a package of nuts that was warning me that I was eating a package
the opportunity to meet the stars of the stage
Austrian Consul General in Hong Kong,
of nuts!
– to chat with them, snap some pictures
Michael Kratzer. Chi Kin Fung of the Chinese
together, and collect autographs. The ABT,
Gold & Silver Exchange Society gave a
whose dancers also include such stars as
fascinating talk about gold and its future
Vladimir Malakov, opens its New York season
on October 21 .
st
try
Hong Kong Coun
Guests with Superfund r (right)
Manager Johann Sante
Professor Markowitz with Chr
istian Baha
The other day, I was snacking on a pack of Brazil nuts when I noticed the
Personally, I think the whole world’s gone … well … nuts.
outlook.
(The views of Larry Reno are his own and do not represent the views of
any Superfund company or their management. We’re not kidding.)
Fotos: Europäisches Forum Alpbach
34∫ FUTURE | Superfund News
The Final Word | FUTURE ∫35
Working group on finance wit
h Superfund Founder and Ow
Christian Baha (far left), Marku
ner
s Weigl, also of Superfund (2nd
f. left)
High-Brow discussions
in the mountains of
Superfund gives me
the opportunity to
outperform the market.
Alpbach
This year’s Alpbach Forum included a
Jean-Pierre Casey, a compliance expert
lively economic forum from August 26th
from Barclays private banking, spoke out
to 28th, with alternative investments as a
in Alpbach: “Alternative investments can
keynote topic. This summit meeting of
deal with market volatility better than
financial experts included international
other forms of investment.” He went on
political figures, fund managers and
to explain that access for retail investors
major business leaders –
to asset classes such as
among them Superfund
managed
futures
is
“Investors
Founder and Owner
therefore a must. Othmar
should not put
Christian Baha. “The
Karas,
an
Austrian
everything into a
time is ripe for
member of the European
single asset class
meaningful regulation of
Parliament, poignantly
– and thus risk
alternative investments.
summed it up: “The devil
losing everything.” take the hindmost.”
Managed futures funds
make a substantial
contribution to risk
Hannes
Bauer,
diversification in investment portfolios,”
Member of the Austrian Parliament,
said Baha. “Retail investors in Austria and
expressed his strong support for a
throughout Europe should finally get the
common law to regulate alternative
chance to share in these benefits. ”
investments: “We need adequate guidelines
Albert Harmsen, Superfund investor from the Netherlands
The Final Word
FUTURE: Thank you for taking the time to
Since 1945, the European Forum Alpbach has
talk to FUTURE magazine. Whereabouts in
been held each year in the Tyrolean village of
the Netherlands do you live?
Alpbach, deep in the Austrian Alps. Experts,
politicians, and leading business figures from
around the world come together to discuss
Albert Harmsen: I live in Vleuten which is
a small town just outside Utrecht.
current affairs in an open and unbiased
environment.
management system and the fact that
there is no human emotion involved.
Mr Harmsen, you have been invested in
Superfund funds for over a year now. Would
you say you are satisfied with the results?
Where did you hear about Superfund funds?
How did you end up in Vleuten or have you
lived here all your life?
to ensure stability in the financial markets.”
Christian Baha went one stage further:
“Traditional forms of investment should
likewise be regulated. Investors should
not put 100 percent of their money into a
single-asset class – and thus potentially
risk losing everything.”
set up in 1973. In 1986, we went on to
open our second office in Maarsen which
is a town nearby. Then in 1998, we sold
the company to Deloitte & Touche at
which point I retired.
Well, I actually studied to become an
accountant in Utrecht. Then in 1973, I
moved to Vleuten and bought the former
Rabobank building. This quickly became
both my home and my office. Even the
original vault is still here.
I was watching a TV programme called
“Business Class” where a Superfund
employee was talking about the track
record of the funds. Now some people
may be immediately sceptical when they
hear that it’s possible to make a net profit
of 20% a year on one investment, but I
had already heard about CTA’s in America
from a colleague.
Yes I am. The risk management system
protects my investment and gives me
“inner peace”: I can go on holiday and not
have to worry about my investment every
day. The service is excellent and the
website gives me a comprehensive
overview of my investment.
In your opinion, what is the benefit of having
Superfund products in your portfolio?
Do you still have your office here or has this
now exclusively become your home?
What was the main reason for you to invest
in Superfund products?
I retired and got out of the company in
1998 so it is just my wife and I living here
together now.
What kind of company did you own?
Wilhelm Molterer, former Vice Chancellor and Finance Minister of Austria
Christian Baha, Founder
and Owner of Superfund
Paul Kirchhof, former advisor to
German Chancellor Angela Merkel
It was an accountancy agency called HKC
Group (Harmsen & Van Kesteren) which I
Besides the good return on investment, I
very much believe that a systematic
approach is the way to go with futures
trading. Especially when you want to trade
so many markets at the same time. It is
impossible to do this as one person. I’m
also very enthusiastic about your risk
Superfund gives me the possibility to
outperform the market. I hardly ever buy
single shares. Instead, I tend to trade a lot
of indices myself through trackers, and
when I combine this with Superfund, I
actually outperform the market. So when
I look, for instance, at the performance of
the Dow Jones compared to my portfolio
of trackers and Superfund, I’m doing a
much better job.
Superfund Austria office
in Vienna 4
www.superfund.com
LEGAL DISCLAIMER
The Superfund group of investment companies is a consortium of affiliated
entities that collectively provide the management, trading advisory, sales
and marketing services for the managed futures funds that utilize the same
Superfund brand systematic trend following strategy (collectively referred to
as the “Superfund Group”).
Performance:
Any performance results shown in this publication are net of all fees. All
details concerning performance figures of Superfund Q-AG (closed fund)
serve exclusively as a historical presentation of the ability of the trading
managers of the Superfund Group. No subscriptions or follow-up
subscriptions are possible or will be accepted in these funds. Past
performance of any mentioned funds is not indicative of future returns of any
Superfund products.
General:
This publication serves solely as general information about certain
investment providers and investments and may not be construed as
investment advice. The information contained herein does not constitute a
solicitation or offer to invest in any financial products. The financial products
mentioned in this publication are only admitted for public sale or may only
be advertised publicly in certain jurisdictions, where they are subject to strict
regulations. As of the date of publication, certain Superfund products are
authorized or permitted to be sold publicly to persons in the United States,
Austria, France Germany, Poland, Luxembourg, Liechtenstein, Sweden, the
Netherlands and Japan, subject to various conditions and limitations. Such
products are not authorized for sale to the general public in any other
jurisdiction. Subscriptions from persons or entities in other jurisdictions will
not be accepted unless such persons or entities fall under a specific
exemption, or unless such subscriptions are otherwise permitted in
accordance with applicable laws in those jurisdictions. No investment
products are offered or sold in any jurisdiction, or in any manner, in which an
investment would be contrary to the applicable securities laws or any other
local laws or regulations. Applications from persons who do not meet
applicable eligibility or suitability requirements will be refused.
Funds managed by members of the Superfund Group are not available for
subscription or purchase by persons resident in Hong Kong or Singapore
except under prescribed exemptions under the laws of those jurisdictions.
In Hong Kong, funds managed by members of the Superfund Group are not
authorized by the Securities and Futures Commission. Only persons who
qualify as professional investors under the Securities and Futures Ordinance
are eligible to apply for shares of such funds. In Singapore, certain Superfund
funds have been recognised by the Monetary Authority of Singapore as
restricted schemes. Accordingly, only institutional investors, accredited
investors and other relevant persons (within the meaning of the Securities
and Futures Act of Singapore) may be offered, and are eligible to apply for,
shares of such funds. Any offer made to an accredited investor or other
relevant person in Singapore must be accompanied by an Information
Memorandum. For the list of restricted schemes, please contact your
Superfund representative. Otherwise, funds managed by members of the
Superfund Group not recognised by the Monetary Authority of Singapore
are available only to those who qualify as institutional investors as defined
under the laws of Singapore.
In Japan, only qualified institutional investors (as defined under the laws of
Japan) are eligible to apply for shares of funds managed by members of the
Superfund Group without solicitation in Japan pursuant to an exemption
and subject to resale restrictions. If any solicitation is conducted within
Japan, a filing with the Financial Services Authority (FSA) is required before
solicitation and other requirements for a private placement to qualified
individual investors must be satisfied. Absent the same, no persons other
than qualified institutional investors are eligible to apply for shares of funds
managed by members of the Superfund Group which are not registered
with the Director of Kanto Local Finance Bureau of the Ministry of Finance.
Certain funds managed by members of the Superfund Group are currently
not licensed for public offer and distribution in Switzerland and are therefore,
subject to certain specific exemptions, not available for purchase by
persons domiciled or resident in Switzerland.
Superfund Financial (Middle East) Ltd. is regulated by the Dubai Financial
Services Authority (DFSA).
This document is strictly not intended for circulation to U.S. investors. In the
Unites States, Quadriga Superfund LP is registered with the Securities and
Exchange Commission and is available to certain U.S. investors that meet
suitability requirements. No other products managed by members of the
Superfund Group are available to U.S. investors.
In Australia this document is published by SuperAlphaFund Financial Pty Ltd
ACN 127 947 891 acting as an authorised representative of Columbus
Investment Services Limited ACN 106 064 644 AFSL 246943.
This information has been prepared without taking into account anyone’s
objectives, financial situation or needs so before acting on it consider its
appropriateness to your circumstances. Past performance is not a reliable
indicator of future performance.
In Australia investments can only be made by purchasing units in the Super
Alpha Fund 1 ARSN 127 228 719 (Fund). This document does not constitute
an offer to sell or the solicitation of an offer to buy units in the Fund. Units
may only be purchased by completing an application form attached to the
product disclosure statement for the Fund dated 3 November 2008 (PDS).
All information contained in this document is subject in its entirety to
information contained in the PDS. If you are considering investing in the
units in the Fund you should consider the Fund’s investment objectives,
risks, charges and expenses carefully before investing. This and other
important information about the Fund can be found in the PDS. You should
carefully read all of the PDS before making an investment decision.
All information contained herein has been compiled from external and
internal sources deemed reliable and is accurate to the best of publisher’s
knowledge. However, there is no guarantee as to the complete accuracy of
all printed information and figures, including depictions. Estimations are
based on opinions at the time of analysis. Changes of these estimations are
not required to be published. Any liability for possible mistakes is hereby
expressly excluded.
Important notice:
Financial products managed by members of the Superfund Group are
speculative investments. There is a substantial risk of loss in trading futures
and options. Drawdowns ranging approximately from 20% to 30% regarding
strategy A (Superfund Q-AG), from 30% to 40% regarding strategy B and
from 40% to 50% regarding strategy C can occur regularly, and drawdowns
surpassing these figures are possible. The possibility of a complete loss of
the principal invested cannot be excluded.
THE AUTHOR AND DISTRIBUTORS OF THIS MATERIAL EXPRESSLY
DISCLAIM ANY AND ALL LIABILITY FOR ANY INACCURACIES
CONTAINED IN THIS DOCUMENT, AND SHALL NOT BE HELD
LIABLE FOR THE SAME.”