Follow The Money

The term Sovereign wealth fund was first used in 2005 by Andrew Romanov in an article entitled 'Who holds the wealth of nations? In the article, Mr.Romanov mentioned that “Typically, sovereign wealth funds are a by-product of national budget surpluses, accumulated over the years due to favorable macroeconomic, trade and fiscal positions, coupled with long-term budget planning and spending restraint. Usually, these funds are set up with one or more of the following objectives: insulate the budget and economy from excess volatility in revenues, help monetary authorities sterilize unwanted liquidity, build up savings for future
generations, or use the money for economic and social
development”.

Translation – Sovereign funds functioned as a vehicle through which cash rich nations could invest in fairly stable, promising investment products.

Follow The Money: The current global economic downturn offers some unique opportunities for cash-rich global funds to pick up choice assets at bargain prices. A brief study of the key holdings in some of these funds may offer some insights for would-be investors.

Note: I’m making an assumption that these sovereign wealth managers will make smart investment decisions. At the very least, we should notice some consistent themes  across funds from Asia, S/America & the Middle east.

Below is a list of 14 funds – which were featured in Mr.. Romanov's article, back in ‘05.

Country	Fund Name	Assets  ‘05 $B	Assets Feb ‘09
United Arab Emirates	Abu Dhabi Investment Authority	$250,000 Billion	$875 Billion
Norway	Government Petroleum Fund	$170,000 Billion	$350 Billion
Hong Kong	Investment Portfolio (HKMA)	$100,000 Billion	$173 Billion
Kuwait	Kuwait Investment Authority	$65,000 Billion	$202 Billion
Singapore	GIC	$100,000 Billion	$330 Billion
Brunei	BIA	$30,000 Billion	$30 Billion
USA (Alaska)	Permanent Reserve Fund	$29,800 Billion	$29 Billion
Russia	Stabilization Fund	$27,700 Billion	$137 Billion
Malaysia	Khazanah Nasional BHD	$ 15,800 Billion	25.7 Billion
Trinidad & Tobago	Revenue Stabilization Fund	460 Million	2.9 Billion
Canada	Alberta Heritage	$9,800 Billion	14.9 Billion
Chile	Copper Stabilization Fund	$3,900 Billion	$21 Billion
Oman	State General Reserve Fund	$2,000 Billion	$8.2 Billion
Venezuela	FIEM	$714M	$~700M

The Real Value of Sovereign Funds

So, what's the real value of sovereign funds?

Years ago, I worked for a mutual funds company called Trimark. At the time, it was one of the largest fund company's in Canada. At the time - mutual funds were the primary investment vehicle of choice for many North Americans.

The key selling point? Mutual funds are stable - less volatile than owning individual stocks, and safer too, because you spread the risk across different investment vehicles. I learnt a little about the investment industry and even did a little day trading.

Lately, I've developed an interest in sovereign funds - a friend asked me why and I decided to respond through a series of blog posts.

First - What is a Sovereign fund? A sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other investment products.

Some sovereign wealth funds are held solely by central banks of the country in question. The central banks often accumulate the funds in the course of their management of a nation's banking system; this type of fund is usually of major economic and fiscal importance to the country.

Other sovereign wealth funds are simply the state savings which are invested by various entities for the purposes of investment return, and which may not have significant role in fiscal management.

During my days at Trimark – I learnt the importance of following the money. Any Mutual fund performs only as well as it's key holdings. These Sovereign funds have 100's of Billions of dollars invested - worldwide, and a cursory review of their key holdings can offer interesting insights about global investment trends.

Sovereign funds offer a great window into the global investment strategies of some of the brightest investment managers in the world. Over the next few months – I’ll identify and group a handful of investment products, based on my research into Sovereign funds.

I’ll build a series of portfolio’s – based on my findings, and share monthly performance updates with the rest of you World Changers.

Have a great weekend……….

World Changers Always Finish Strong

I came across this video clip and I figure it's worth sharing. I'm constantly reminded of the importance of finishing strong ........

Sound Judgement & Discernment

Greetings, fellow WorldChangers - This week I'm in Salt-Lake City, Utah - attending a Conference. If you've never been to Salt-Lake City, I'd highly recommend it - very beautiful terrain.

Lately, I've been spending more and more of my time thinking about Leadership - thought leadership, servant leadership and personality traits of great leaders. Recently - I launched the Leadership Journal - to help socialize some of my ideas and those of other thought leaders. I'm hoping that the Journal will become a good resource for aspiring leaders everywhere. A forum through which we can all learn about the skill and character traits required to be a great leader.

This morning - I found myself thinking about Dr Ben Carson, and what I learnt from him, about leading a purposeful life. One thing he mentioned - which resonated with me, was that he reads something the book of Proverbs every day.

I understand that not all of my blog readers are Christians - some of you may not be religious, that doesn't mean you won't benefit from the insights in the book of Proverbs. There is something for everyone and every situation - in that book.

Today - I read Chapt 3 - vs 21-25. It talks about the value of sound judgment and discernment. It also counsels readers not to be consumed by fear of sudden disaster. It seems to me that, in these hard times, we all need a little encouragement. I get mine through prayer and reading the bible. I'd like to challenge anyone who reads this post - to pick up a bible and read one or two lines from the book of Proverbs. You can get a version of the bible which breaks down the core message, in simple everyday language.

Perhaps you're thinking - You don't have time? 5 minutes is all you need...

Try to make the effort - you have absolutely nothing to lose, and plenty to gain.

Peace........

Dr. Ben Carson

Tonight – I watched the TNT Movie - “Gifted Hands”. It’s the story of Dr. Ben Carson, one of the most gifted Pediatric Neurosurgeons the world has ever seen. I feel truly blessed to have watched this movie – and I’d recommend it to any aspiring World Changer. Here’s what I learnt from Dr. Carson.

His Mother taught him the value of reading at an early age, by challenging him to read 2 books each week, and write a report. Reading books is one thing - writing a report or some sought of of review helps ensure that the key learning's stick.

When Ben was an adolescent – he was plagued by a very violent temper. One afternoon at school,a colleague attempted to bully him, Ben was enraged and actually stabbed the individual. Fortunately, he caught a break – the blade broke. That day, he prayed to God to help him gain control of his temper – the rest is history.

God Answers Prayers…

When Ben arrived at Yale, he was consumed with self-doubt. He was able to pull through – by drawing on his strengths and the self-belief that his mother had constantly instilled in him, from a very young age. Words are powerful – we need to continually nurture strength of spirit, inspire ourselves and others.

Shortly after he started at John’s Hopkins – the nurse on duty mistook him for an orderly and not a new intern. Undoubtedly he must have faced a great deal of provocation – but he never let it get to him. He stayed upbeat and focused and allowed his work to speak for itself.

Dr. Carson was and remains a remarkably introspective person, with a strong sense of self belief. Like Barack – he’s proven that it’s possible to be confident, self assured and very driven – without being arrogant, derogatory or overbearing.

I hope to learn more about Dr.Carson in the months ahead – he has written 3 books and over 100 journals – so there’s much to learn.

Suicide - In The Aftermath of the financial crisis

I just don't get it -why would a rich man kill himself. I come from Nigeria - a country which is no stranger to corruption, fraud and scandals. Back home, we live in a very materialistic world - where the have's are readily distinguishable from the have nots.

People make and loose fortunes everyday - under unfortunate circumstances. We are a proud people, so when a person's fortunes take a turn for the worse, it's often deeply embarrassing for that person's entire family. However - the prospect of suicide rarely crosses our minds.

I recently read about the rising number of Suicides - apparently due to the ongoing financial crisis. An out-of-work money manager in California loses a fortune and wipes out his family in a murder-suicide. A 90-year-old Ohio widow shoots herself in the chest as authorities arrive to evict her from the modest house she called home for 38 years. In Massachusetts, a housewife who had hidden her family's mounting financial crisis from her husband sends a note to the mortgage company warning: "By the time you foreclose on my house, I'll be dead."

It's one thing for someone who loses a home, a job or perhaps one's life savings - I'm an optimistic person, so I can't understand why anyone would commit Suicide. I'm even more befuddled by the suicide deaths of a Adolf Merckle and Rene-Thierry Magon de la Villehuchet.

It would seem that both men were still wealthy - even though their assets were diminished in part by Mr. Madoff and by the ongoing financial crisis.

Perhaps I'm an internal optimist - I can't explain why anyone would commit suicide - let alone someone with hundreds of millions in the bank.

We need to strive to lead Purpose driven lives - and a life of purpose should never be about amassing material wealth. Our source of being shouldn't revolve around what we own or even our personal/professional accomplishments.

Not saying that's the case for any of these folks - I do know that if your life has true purpose, the concept of suicide should never cross your mind

Tough Love For Microsoft?

Recently - Danny Sullivan wrote this piece, on Microsoft's Search Engine. It's a lengthy write up, but definitely worth a read. I've attended a number of events at which Danny has spoken, including the Webmaster Series which he referenced in this article.

Having spent the last 4 years covering the Global Search Industry, I have a lot of respect for Danny's opinion. Much of what he's written is spot on.

I do have one slight disagreement though.

Danny "Word-of-mouth is far more powerful, in my opinion. Google was built on it. It was a great product that took off like wildfire on the web. Distribution deals certainly helped Google, but I don’t buy into them alone being what “made” Google. It was far from the only search engine to cut distribution deals. For one example, Excite gained important distribution via Netscape, but that didn’t save the company in the long-term."

Word-of-mouth was great for Google, however - by far the greatest catalyst for the companies success, was it's revolutionary monetization platform which enabled it to sign distribution deals with AOL, CNN & several of the most popular general interest portals of the day.

It's worth noting that Google "Stole" many of those distribution deals from Overture - which was the pre-eminent Search Player at the time.

HAPPY NEW YEAR

Hi all, I apologize for the radio silence over the past few months. I had to take some time off from writing - primarily because of my commitments at work & the holiday season. I'm also planning the launch of a new online initiative which will revolve around my passion for Leadership Development.

The month of January tends to be one of great optimism, chuck full of new year resolutions, and millions of people signing up for gym club memberships. This morning, I heard that all new year resolutions are broken or forgotten by valentine's day. Hopefully that won't be the case, this year.

I believe '09 is a year of restoration - I've labelled it, the year of the "Big Push". (More on that later). Over the next few months - the World Changer's Journal will feature bi-weekly write-ups on a variety of core topics - including Web Analytics, Professional Development & Leadership Strategies.

Happy New Year.......