Newspaper article Evansville Courier & Press (2007-Current)

Rwandan Beer, Madoff: No Omega to Alpha Stock

Newspaper article Evansville Courier & Press (2007-Current)

Rwandan Beer, Madoff: No Omega to Alpha Stock

Article excerpt

NEW YORK - You can leap off a mountainside in extreme skiing, kick and claw to near death in extreme fighting and twist yourself into a pretzel in extreme yoga. Why not turn investing into an adventure sport? Professional money managers are scouring the world for oddball assets, desperate to find anything that moves to its own beat rather than rising and falling with everything else in the financial markets.

They are putting money into racehorses, stakes in lawsuits, old coins, even the copyrights to old pop songs. One fund manager bought stock in a beer company called Bralirwa in Rwanda, where tribal rivalry led to a genocide that left 800,000 people dead in 1994.

"Rwanda triggers a lot of bad memories, so people don't even think of investing there, but there's huge opportunity," says Lawrence Speidell of Frontier Market Select Fund, which also owns stock in an Iraqi soft drink bottler and a

Palestinian telephone company.

Bralirwa stock has risen 150 percent since Speidell bought it early last year. But the real appeal is that it did so in a steady, calm way, disregarding events that have made the rest of the world's stock markets bumpy and frightening, like the Japanese tsunami and European debt troubles.

And Bralirwa keeps bucking the headlines. Last month, while stocks in the U.S., Europe, Asia and Latin America fell because of fear that Greece would leave the euro and Spain needed a bailout

Bralirwa rose 6.5 percent. Even Apple, a stock known to shrug off scary headlines itself, got swept along in the downdraft.

In trading jargon, the Rwandan company and some of Speidell's other exotic holdings are "uncorrelated." They have a tendency to move to their own rhythm, a sort of Holy Grail in investing.

Discover enough of these assets and a money manager may claim to have achieved "alpha," an ability to beat the Standard & Poor's 500 or other indexes without taking on more risk.

Convincing investors of the claim is another matter. …

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