Robert Citrone Quotes

101 Robert Citrone Quotes

1 2 3



[In April 1994 on emerging markets.] think the story is still intact for spread tightening. We are expecting a year from now that spreads will be tighter than they are now. Once things calm down I think we would prefer to see some longer financing from corporates, like seven-year financing. If we get a longer exposure we can get capital gains on spread tightening.
Robert Citrone

[In May 1994 on the Fidelity Advisor Emerging Markets Income Fund.] I'm pleased with the fund's performance so far, considering the difficult investing environment in which it was launched. From the fund's inception on March 9, 1994, through May 31, 1994, its total return was 3.36%.
Robert Citrone

[In May 1994.] In hindsight, it's clear that the fund got off the ground about midstream in a severe worldwide bond market downturn. The sell-off began in early February - when the Federal Reserve Board raised short-term interest rates in the United States for the first time in five years - and bottomed in early April. The Fed's move was designed to curb future inflation resulting from a strengthening U.S. economy.
Robert Citrone

[In May 1994.] The correction accelerated in the emerging markets, in part, because so many investors in these markets had highly leveraged positions, meaning they were investing mostly with borrowed money. When bond yields rose - and prices fell - many of these investors couldn't put up the collateral to hold onto their positions, and had to sell.
Robert Citrone

[In May 1994.] By the time the fund was launched on March 9, it was obvious that emerging market bonds were in a free fall. So instead of diving right in, I kept anywhere from 40% to 60% of the fund's investments in cash and other short-term instruments in the early weeks.
Robert Citrone

[In May 1994 on what he was buying.] Mostly floating-rate bonds in what I considered to be the highest-quality emerging markets - places like Argentina. The stated interest rates on these bonds are reset at pre-stated fixed intervals, ranging from 30 days to six months. When rates are rising - as they were in March - the fund can obtain a higher interest rate on these bonds at their reset intervals. That helps reduce the fund's interest rate risk - or the risk that rising rates will negatively impact the fund's total return.
Robert Citrone

[In May 1994.] Any time you invest overseas, currency risk can play a role. That's the risk that movements in the currency of the nation in which you're invested can hurt the returns on those investments. I can reduce currency risk by buying dollar-denominated bonds - those whose returns are directly tied to the U.S. dollar. Going forward, I expect to keep roughly two-thirds of the fund's investments in dollar-denominated bonds. In addition, political risk is a concern. Governments in some countries in which the fund invests can be prone to sudden changes, which can disturb financial markets very quickly.
Robert Citrone

[In May 1994.] I can't really control political risk. But by doing my homework on the countries in which the fund is invested, I can try to limit it. The fund invests mostly in government rather than corporate bonds. Fidelity has a staff of researchers who help me learn everything I can about the stability of governments in these countries. By limiting investments in areas where political risk appears high, I can focus my energies on managing credit risk - or the risk that a bond's issuer won't be able to meet interest and principal payments. Again, information is key. Researchers help me find those investments where the credit risk appears to be more favorable than the market price indicates. In addition, when an issuer's credit rating is upgraded - as I believe will soon happen with some emerging markets issuers - its bonds become more valuable.
Robert Citrone

[In May 1994 on reducing the funds cash position to 19.3% by the 31st of May 1994.] By mid-April, many emerging markets had begun to turn the corner. The fund had a 25.5% stake in Argentina by the end of May, mostly in floating-rate, dollar-denominated government bonds known as BOCONs. Once the sell-off eased, these bonds offered yields that were up to 6% higher than comparable Treasury bonds in the U.S. In addition, Argentina has successfully reduced inflation and has a budget surplus. And it looks like the country's current leader, President Menem - whose administration has launched effective economic programs - is a likely candidate for re-election next year.
Robert Citrone

[In May 1994.] I increased the fund's stake in Mexico to 16.5% by the end of May. An already shaky Mexican bond market was rocked further by the assassination of the country's leading presidential candidate on March 23. Again, however, sliding bond prices created exceptional value in the marketplace. In addition, I've met with the PRI party's new candidate, Ernesto Zedillo. I believe his economic policies are solid, and I think he stands an excellent chance of winning the upcoming election. Mexican bond prices already reflect a level of political uncertainty, and I feel that as a PRI victory becomes more likely, bond investors will be rewarded appropriately.
Robert Citrone



[In May 1994.] The underlying political and economic stories in many emerging market nations continue to improve. Although yields have fallen - and prices have risen - since the correction bottomed in early April, I think there's potential for further price gains. But events in one emerging market can affect many. Key elections in Mexico and Brazil later this year bear watching. If the reform-minded candidate can win in Brazil, I think it could boost all Latin American markets, and I'll look to increase the fund's investments there. However, if the leftist candidate - who wants to slow reform - wins, it could create even more volatility in these markets through the end of the year. Finally, U.S. interest rates are also a factor. If they stabilize over the next several months, I think it will help calm jittery emerging markets investors.
Robert Citrone

[In May 1994.] I invest using a `top-down' approach. That means I first analyze the investing climate within a given country. I look for strong governmental leadership. I also examine the latest numbers on the nation's budget deficit, inflation, interest rates and more. Only then do I look at the individual securities available in the marketplace. Imagine a sheet of paper with a line down the middle. On one side, I list the risks. On the other, the potential rewards of the available securities. Through careful research, I try to find investments that I feel are under priced in the marketplace, given their risk/reward trade-offs.
Robert Citrone

[In June 1994.] If a country does the right things, and the economic reform programs work, they will get an additional push (As foreign capital rushes in). But if a country does something, and the market doesn’t like it, they pay immediately (As investors sell).
Robert Citrone

[In July 1994.] We use derivatives selectively.
Robert Citrone

[In July 1994 if he purchases a $100 million call on Mexican par bonds at a strike price of 64, he has to reserve $64 million (in addition to paying the cost of the option.).] For us, we’ve much better off taking the underlying cash position.
Robert Citrone

[In February 2000.] I think what's unique about our strategy is that we use both long and short directional strategies in all the asset classes… in equities, currencies and fixed income.
Robert Citrone

[In February 2000.] Where we believe we add the most value is selecting the right countries to be long and the right countries to be short.
Robert Citrone

[In February 2000.] We spend the majority of our efforts in the analysis of country risk, what's happening economically and politically in the country. We generally find the most attractive investments in countries where our view differs substantially from the markets, where we're either much more bullish where we'd be long or much more bearish where we would be short.
Robert Citrone

[In February 2000.] Although we look at most emerging markets globally, we really focus on about 20 markets, and it's the 20 countries that Harry [Krensky] and I have been traveling to for the last 10 years. We have not only a wealth of experience in these countries, having invested in them, both on the long and short side, but we also have local contacts that we've developed over these years.
Robert Citrone

[In February 2000.] When I was at Tiger Management and Fidelity Investments, we were two of the bigger players in the market, so we got tremendous access to resources in these countries and we developed fantastic relationships that still exist today. After we decide which of the countries we want to participate in, we evaluate the asset classes and select the one that best expresses our view.
Robert Citrone



[In February 2000.] The country decisions are most important. The asset class decisions are the second most important and then finally the security selection. Most people do the opposite; they go with security selection first. In emerging markets, we think that's putting the cart before the horse.
Robert Citrone

[In February 2000.] It may be local shares or local currencies, or we may do ADRs. We will utilize whatever is available as long as it is liquid. So we're not picking third tier stocks in these countries; we're staying in the more liquid blue chip names on both the long and short side.
Robert Citrone

[In February 2000.] We generally won't be in a market unless we like all the asset classes. Most of the time the markets move in the same direction; however, usually one asset class has a superior risk-return profile and better expresses our view.
Robert Citrone

[In February 2000.] In Turkey we wanted to focus on domestically oriented companies and did not want to be in the export sector. We felt the real exchange rate would appreciate significantly and there would be a large domestic demand growth. In that scenario, you want to be invested in domestic companies. In Turkey, it is a little bit more difficult, because the kinds of companies and sectors that come to the top of the list are utilities and telecoms. But there's no direct way to invest in the telecom sector in Turkey; it's all privately held or still owned by the government. In the utility sector there is also not a direct way to express our view. So we ended up investing heavily in the financial sector, which has done well, and we also were able to find some domestically oriented consumer products and retail companies.
Robert Citrone

[In February 2000.] Brazil is a market that we continue to like very much, although our recent extraordinary returns may not be repeated in the short term. We think that there is continued upside. Our continued interest in Brazil is largely based on the fact that the government is dealing in a very responsible way and a very effective way with the fiscal difficulties that have plagued it for many, many years.
Robert Citrone

[In February 2000.] Over the past several months, we have had positions in the currency, in external debt (through Brady bonds and sovereign Eurobonds), and in the equity market (primarily in the telecommunications sector); although the equities have been the dominant asset class that we have used to express our view. Now, at this point, we have eliminated our currency positions because of the risk-reward ratio, and also have reduced both our debt and equity positions, because as prices have dramatically risen and some of our price targets have been met, the risk-reward is not as compelling as it was in the early fall. We still like the fundamentals but are leaving a little ammunition to add on weakness in this market.
Robert Citrone

[In February 2000.] When you say fixed income in emerging markets, you really have to talk about two different asset classes. One is hard currency US dollar, euro, and yen-denominated long dated fixed income assets, dominated by Brady bonds and new issue eurobonds. That market is in excess of $250 billion. It is a large and very liquid market. The spreads are very attractive. We are talking about spreads anywhere from 350 basis points over US Treasury yields for Mexico to 1,500 basis points over for Russia, with the rest of the countries falling somewhere in between. There are some attractive risk premiums available there. But you have to be really careful on a country-by-country basis.
Robert Citrone

[In February 2000.] Then you have the domestic fixed income markets as we mentioned in Turkey, where you have two-year Turkish bonds that were yielding 110% when we bought them. This market is also country-specific. In some countries, it has become very liquid, but in other countries it is a very small market. Generally, the longest dated securities you can buy are two to three years. To some extent, it is more of a currency play, but increasingly, we are seeing long dated assets that then become more of a fixed income play. In this part of the market, we have used Turkey, but we have not found another market in the world that has been attractive in the local fixed income from a fixed income perspective.
Robert Citrone

[In February 2000.] I think the one mistake we made is a missed opportunity in one of the countries we know best: Mexico. We have not really made much money in Mexico so far. We are more cautious on the Mexican market because of its link to the US market and we are little bit more concerned about the US market. But we missed a very, very large repricing of Mexican assets over the last six months. It was a mistake not to be there in an aggressive manner. I have been there more than 25 times in the last seven or eight years, and Harry probably 50 times over that period. We have very good local contacts there. We felt there were better opportunities elsewhere and so we made the money elsewhere, but we could have made additional money in Mexico. It's an opportunity that we missed.
Robert Citrone

[In February 2000.] We have pretty much have stayed out of Venezuela and have no Venezuelan exposure at the moment, even though oil prices are very high and that helps the country tremendously. The risks are too high on the political side.
Robert Citrone



[In February 2000.] One of the things that I have done for the last four years is spend a lot of time in China. Although there is not much to invest in, China is such an important part of not only the emerging markets but of the global economy as well. What happens in China has an impact on commodity prices, bond prices, and potentially all markets on a global basis. I think that is a country that is not well understood by the market. I believe the situation in China is much more difficult than even the most pessimistic forecasts. I would warn people to be careful on China. I believe China is in the midst of a rolling five-year crisis. That certainly has implications for global markets. We need to keep a close eye on it. The other area to be cautious on is that some of the developed markets' asset prices in certain sectors are subject to a potential significant correction. I am not saying this applies to the market as a whole. We do not know what impact that is going to have on global markets or growth. We certainly try to make sure at all times that we have risk-reducing strategies in the portfolio.
Robert Citrone

[In September 2004.] We do a lot of currency and equity trades. It gives us a lot more information: one market will move and another will not. It also allows you to express your view more clearly.
Robert Citrone

[In June 2006.] Having in-house skills helps us to gauge which political risk analysts are really effective.
Robert Citrone

[In October 2011 on giving a gift of $75,000 to ‘Orphaned Starfish’ which builds computer centers and provides technology training for children in orphanages in 10 countries from Bolivia to Ethiopia.] We hope to fund one every year going forward.
Robert Citrone

[In October 2011.] I invest in emerging markets and I've been to all of these countries and I've seen the poverty. Some of these countries are very close to my heart and to support kids and help with education is really an important thing to do.
Robert Citrone

[In October 2011.] When you hear their stories and their backgrounds and what they've gone through to get where they are... it's just touching.
Robert Citrone

[In April 2014.] Discovery had reduced the amount of risk it was taking and I remained confident that U.S. growth was accelerating
Robert Citrone

[In April 2014 on the investment carnage involving stocks accounting for 85% of the firm’s March losses.] Perfect storm.
Robert Citrone

[In October 2014 investors on ECB’s (European Central Bank) policies.] Have lost a great deal of hope.
Robert Citrone

[In October 2014 on ECB policies.] Have allowed the economy to sink and have done little…
Robert Citrone



1 2 3

Return from Robert Citrone Quotes to Quoteswise.com