 London (CNN) – For London’s investment community Sundays are more about talking pizzas than politics. They’re the last chance to unwind before buckling up for the bumpy ride when the markets open on Monday morning. But across Europe’s financial hub, traders are keeping an uneasy eye on events in Athens and preparing themselves for what many reckon will be a wild week at work. Veteran London hedge fund manager Lex van Dam has lived through more than one financial crisis and worked for some of the biggest names on the street, like Goldman Sachs and GLG. The 43 year-old Dutchman shot to fame three years ago at the height of the credit crunch as the forthright financier on the BBC’s reality show "Million Dollar Traders." Van Dam now spends his time running Hampstead Capital, a fund with 500 million euros ($630 million) under management, as well as his new initiative: The Lex van Dam Trading Academy, set up to teach would-be dealers how to manage money. He took time away from his weekend lunch (and 26,000 followers on twitter) to answer five key questions on what the Greek elections mean for the markets. 1. Will Greece leave the euro? Yes. They will leave very soon unless the Germans change their tune and throw more money at them. It is slightly unfair though as most of the help Europe gives them is to help the Europeans themselves as opposed to helping the Greek people. 2. Is austerity the right answer? Austerity is not the answer. The Greek economy is absolutely collapsing and the tax base is going down with it. The American and British solution of printing money is not the answer because it will lead to a total lack of trust in the government because paper money will be worthless. The answer is accepting that people in the West need to work harder and longer. 3. Will the euro survive? The biggest chance is for a two-speed Europe to emerge with Germany leading the euro pact and Italy in the second group. The German euro will be very strong, the Italian euro very weak though. 4. Eurobonds: The perfect cure or recipe for disaster? The Germans have done a massive amount of austerity at home with a higher retirement age and lower wage inflation than in the southern European nations. They will not write a blank cheque to the south. Eurobonds mean that the Germans will become responsible for the Greek debt. It will not happen unless countries such as Spain and Italy give up part of their sovereignty. 5. Where are you putting your money now? My money stays in cash and real assets such as property and gold. Shares are not expensive right now but if interest rates go up even a little they could drop a lot.
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Van Dam is certainly no brighter than a retail investor who does his/her due diligence. Why pay performance (~20%) and on top of that annual management fess , when same or even better results can be accomplished via careful and thorough due diligence ?
How hedge funds view the vote?
My market strategy this days: just track the smart money movement..
How?I’m using Algorithmic systems (like “ I Know First” or “TW” ).
For example:
I saw the smart money movement on June 6 and bought AKAM .
AKAM rose by 13.5% in 10 days.
I believe that in this market condition -timing is the most important thing.
Good luck!
This was a disappointing posting by CNN. How could Van Dam get it so wrong now that the Greek vote is in? If CNN is touting this as useful or even insightful economic commentary then one can see the role the media plays in corrupting market sentiment. This was really poor commentary .......... Buying gold ....... Ha, ha, ha ........ You do not need a recent science to tell you that here are father better investments even during these are times. Gold and cash ....... Ha, ha, ha ...... CNN you have done the marketing spin for Van Dam. Let the gullible be conned!
"The answer is accepting that people in the West need to work harder and longer."
Nobody wants to admit this, but this is the answer to the crisis. Productivity is the only thing which brings us out of the
recession and is the basis for the last 200 years of growth. Productivity starts with individuals creating and selling a product or service. Make more of what people want and consume. Sell at reasonable price so all benifit.
And it's not just "people in the West" but everywhere. The "Arab Spring" came about because they have had decades of no productivity, no opportunities, and finally, no hope. Ghandi had it right when he said everyone must had a loom. Everyone consumes fabric, everyone can learn to weave fabric for personal use and sale. Think "cottage industry".
Cash is King, YES, for now.
EU today is almost identical to USA in 2006–August, 2008.
Buckle up, son. Mark this warning on your calender if you have doubt.
Agree with Lex van Dam. Thanks CNN for interviewing professionals who do not only do the talk but are in the game of money.I disagree strongly with some of the comments here; have been following Lex's tweets and insights; and never found them corrupt or dishonest – very helpful and always right things spotted. People do not need work harder and be more honest about not using their full potential but choosing easier – moaning path! Always easier to blame someone else! Time for every each of us to contribute! Thanks, Lex!
Apologies for a mistake – 'people do need to work harder'. Really interesting to see what Monday brings for Greece!
Wakey wakey ..... Tea and kaykie ....... Mr Martin Kay ......... Have you got money invested with Lex van Dam ............ ? As you admit it's about being in the game for money ......... It is not about being corrupt or dishonest. It's about blowing smoke under people's skirts ...... Telling them to invest in nonsense. It's easy to tell people where to invest and see them waste their money. The pied piper syndrome .......... Economists, investors and governments ..... Leading the mob to destruction while they exploit the marketing spin, write a book, do a reality show and sprout mediocrity. Do yourself a favor and a make a checklist of what investors predict. Give them a score after a few months ...... You will be pleasantly surprised at how much rubbish they talk just to grab the headlines. Think for yourself. A tweet does not legitimize anything.
Not a word said about the French economy and position. Strange indeed.
The US is no different from Spain . . . except in the fact that the US can print more dollars at will while the Greeks can't do the same with the EURO. The 9 trillion dollar deficit that Bush ran while president, plus the additional 6 trillion dollars that Obama has added to our deficit, may yet come to haunt us. One thing is for sure, and economists are practically unanimous on the subject; if the EURO regains its strength or part of it, the US dollar will be heading south again big time. The we can all listen to the fanatic propagandists at FOX who'll be happy to tell us it's all Obama's fault.
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I did Lex's course and it was great. This guy is trying to make finance accessible to a large audience and doesn't use big words that nobody understands. Everyone out there who talk about finance make it sound like it is a rocket science! Cheers Lex, keep up the good work.
Usually I do not read article on blogs, but I would like to say that this write-up very pressured me to take a look at and do so! Your writing taste has been surprised me. Thanks, quite great article.
on your investing style. If you want to try to earn captial gains over short periods of time then a brokerage is what you need. Keep in mind you'll need to trade large amounts at a time to minimize commission. If you're a long term investor interested in dividends then DRIP's are better. Once initiated, they require no effort on your part if you just want the dividends to reinvest and grow your captial. The only effort is buying more shares commission-free when you want.
It agree, very amsuing opinion
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