Guest article written for AllAboutAlpha.com – the official publication of the  Chartered Alternative Investment Analyst (CAIA) Association

originally posted at: http://allaboutalpha.com/blog/2011/09/15/alpha-hunter-jim-oneill-gsams-man-of-brics/

With over US$714 billion under management, Goldman Sachs Asset Management (GSAM) ranks as one of the top 10 asset managers in the world.  At the helm is Jim O’Neill, one of the world’s most respected economists and market commentators who coined the term BRICs (referring to Brazil, Russia, India and China) in his prominent 2001 paper “The World Needs Better BRICs” and has been referred to as  “… the top foreign-exchange economist anywhere in the world in the past decade…“.  In this interview, we look at where the biggest opportunities and risks in the global market.

Q: What are your views on the investment opportunity presented by Emerging (BRIC) economies together with the Arab World?

Jim O’Neill: I think the strategic investment opportunity in the BRIC economies remains really big.  This decade, their GDP will increase by about $12 trillion, i.e. they will create another one of themselves!  More importantly, the share of consumption in this decade’s growth will be bigger and this is where the big opportunity lies.  I am especially optimistic about the Chinese consumer.  All BRIC markets are currently reasonably valued, but I prefer China the most, followed by Russia, then Brazil and India.  But the BRIC’s remain the biggest economic and investment theme out there.  As far as other so called emerging markets are concerned, I focus on 2 groups, one the so-called “next 11″ or N-11, which are the largest populated countries after the four BRIC countries, and the “growth economies” as I call them, which are the 4 BRIC countries plus 4 of the N-11; Indonesia, Korea, Mexico and Turkey.  Within the N-11, I am quite excited about some others which would include Nigeria.  Egypt and Iran are both part of the N-11 and of course, have many challenges, but probably ones to keep an eye on. Continue reading →

Guest article written for AllAboutAlpha.com – the official publication of the  Chartered Alternative Investment Analyst (CAIA) Association

originally posted at: http://allaboutalpha.com/blog/2011/09/06/the-secrets-of-high-frequency-trading/

In recent years, advances in telecommunications, computing capacity and financial software platform capabilities have seen huge growth in the field of High Frequency and Algorithmic Trading (now accounting for over 70% of all equity trades placed on US exchanges and over 77% in the UK).  HFT firms (who can often make over 80 million trades in a single day) often enter and exit trades in thousandths of a second, and are conservatively estimated to generate over $21billion in profits, every year, from their strategies.

To get under the skin of the world of High Frequency trading, I interview Arzhang Kamarei.  Mr. Kamarei is a Partner at Tradeworx, a quantitative investment management firm with expertise in high-frequency and medium-frequency equity market-neutral strategies.  He co-founded Thesys Technologies, a Tradeworx subsidiary, in early 2009 to address the growing technology needs of high frequency traders.

Q: What is the principal investment strategy behind High Frequency Trading?

Arzhang Kamarei: The majority of US Equity HFT is employed in the strategy of liquidity provisioning, also known as electronic market making.   Historically, such a service was provided by NYSE specialists and NASDAQ market makers but, with the advent of decimalization, human specialists and market makers were no longer able to keep up with the liquidity demands of investors and automated technology became necessary for this function.   Continue reading →