By Rick Glaze
Politics in California is about to heat up again as a big election looms in November. Phil Angelides is the Democrat running for governor on an anti-war platform (don’t tell him that governors don’t influence foreign policy), most statewide officeholders are retreading their Birkenstocks for another high post and Republican Gov. Arnold Schwarzenegger has endeared himself to Democrats by introducing massive spending packages.
Local two-time candidate Steve Poizner is campaigning to be the next insurance commissioner. To most people, this seems like an out-of-the-mainstream post. I mean, insurance is boring, right? Poizner’s opponent may be uniquely suited to the position, especially
after Schwarzenegger, at a recent event in Atherton, referred to his current lieutenant governor, Cruz Bustamante, as a “walking sleeping pill.”
But, in fact, insurance is a big deal. Stop and think about the cumulative costs of your personal and business insurance: auto, home, life, property/casualty, directors/officers, personal liability and so on. According to Poizner, insurance fraud in California tops more than $15 billion per year - totaling $500 per person in higher premiums.
The insurance commissioner plays a vital role for consumers in California. How about putting an initiative on the ballot for a double-espresso machine in that office to keep these guys awake?
On the investment front, I watched a guest on a TV show pose the question, When do you know if your hedge fund is taking too much risk? Hedge funds are nonpublic funds that have special investment objectives. Many years ago a hedge fund would use special techniques to lower volatility and create predictable returns. For instance, the fund might try to gain 1 percent per month in any market. Consequently, if the stock market rose 8 percent in a year, the hedge fund would rise 12 percent. If the market gained 20 percent, the hedge fund would still rise 12 percent.
Today hedge funds use any and all objectives, and market techniques can be unpredictable. When do you know if your hedge fund is taking too much risk? The day you write the check.
Rick Glaze is president of Glaze Capital Management Inc. of Los Altos and a general securities principal offering securities through First Allied Securities Inc. He can be reached at Rick@Glazecapital.com.
