What Investment Professionals Are Looking For-and avoiding

In the hedge fund space,one of the most popular trades has been dollar strength,avoiding energy and shorting it,said Troy Gayeski of Skybridge Capital Partners.Two to three quarters from now,energy distressed credit will be sought.Six months ago,private equity was raising money to invest in energy.
Volatility has expanded dramatically since QE was ended.There will be stock market gains of 3-10% in 2015,but with increased volatility as Fed tightening begins.*
German,Japanese and Swiss bond yields are very low,notes John Brynjolfsson of the Armored Wolf hedge fund.The US inflation rate is falling,and US bond yields are among the lowest in the world.I previously thought the Fed would move quickly,but we're probably looking at negative inflation rates,and it's almost impossible for the Fed to tighten interest rates with negative inflation.*
We're looking for high quality companies with good returns on capital,added Kevin Tony of American Century Investments.We are classic value investors.LifePoint is a hospital company with a broad footprint throughout the US.We think as people get jobs,or get insurance through Obamacare,hospitals will do well.Waste services company Republic Services Group has a high return on capital and low volatility.*
Intel reported earnings per share of 0.74 versus an estimate of 0.66;while revenue came in at 14.72 billion versus the 14.71 billion estimate.Data center revenue was 4.1 billion,and better than expected.The company's guidance was strong,although it continues to lose money on mobile and the pc client group was down as well.Intel is ranked number two in mobile processing,but since its stock is already up 40%,it will need a lot to push it up further,CNBC's Tim Seymour observed.
LifePoint Hospitals Inc(LPNT),Republic Services Group(RSG),Intel(INTC),American Century Value Fund(TWVLX)

Seeking Alternatives:Hedge Fund Insights

I still am expecting this market to crack,said Uri Landesman,President and Managing General Partner at Platinum Partners Multi-Strategy Hedge Fund.Anything to do with Europe,people are really scared.At some point,the Euro situation will clarify,and their equities are now more cheap than US equities.People probably should buy Euro equities.
It's a terrible risk-reward in the US market,in my opinion.Natural gas is getting clobbered again.It's very,very cheap.The Chinese will step in and try to buy assets.There will be significant Chinese purchases in the emerging markets even in 2012.Given natural gas trading in the 2.60s,that's very cheap for countries like China that are very short on natural gas.
Specific biotech companies are totally exogenous if they have an event coming up.If the US economic data come out significantly better,I would change my view on housing and lending.I think some of the industrial metals are interesting here.
We are still very bullish about China long term.The engine that is China will roar again in coming years,Mr.Landesman predicted.
Platinum Partners are affiliated alternative investment managers located in New York.In addition to hedge funds,they offer advisory services exclusively for qualified investors.Mark Nordlicht is Chief Investment Officer at the firm.

The Value of Talks

U.S. Treasury Secretary Hank Paulson says there's no doubt oil prices are a problem.He attributes them to supply and demand factors.You're going to get volatility with tight supply.It can only be good news to talk about it with the Saudis.That's a productive idea.We have not had the investment we need in new production and alternate sources.It's always of great value to talk to other policymakers around the world.That builds up a level of trust so we can call each other,Mr.Paulson explained.As for the financial crisis,regulation needs to be updated to catch up with hedge funds.Clearly the Federal Reserve needs greater visibility and authority with investment banks,given the new lending facility for the banks.There's a role for market discipline and moral hazard.When assets are being revalued,you're going to go through times like this,Mr.Paulson observed.