does not mean we can not learn from it............
I always said if it's a cartoon then it's for kids, so yes I have missed out on south park, simpsons and all the Shrek movies. But I caught a recent clip and got to say I was way wrong. Banking and Finance degrees should enter this clip in semester 2 studies.
http://www.youtube.com/watch?v=boK7PpWGI50&feature=related
Interesting times we are in right now. China buying up and storing commodities again which is getting some bulls all fired up as they sharpen their pens and reiterate or raise 09 numbers for some of these stocks. Remember the big picture, we are on the brink of a depression which is 10pct GDP contraction and if we do not reach such levels we will definitely be close enough to see over the cliff. UK will go real close to 10pct contraction, Eastern Europe will, Ireland has to give it a nudge, Russia, who knows, Japan will knock on the door. Euro how is that currency holding up above 1 to 1 with the dollar, just rank the developed world with the top 10 most risky countries from a Macro viewpoint and I am tipping most of the names in that risky list buy bread with the Euro. 1.34 currently heading below 1 by years end.
China has the cash to stockpile up and in any effect is finally looking inward and creating internal demand which in the medium term will serve them well as the rest of the world comes out of this mess but in the short term, DOWN. Keep the shorts on FCX we are in the money a lazy 3 bucks on that already and OIL, it has NO business above 50bucks a barrel in this market.
I saw Mr Wagner the CEO of GM was fired by Obama yesterday, watch ya back Mr Lewis the CEO of BAC bank of Obama. They say we don't have nationalisation so who fired Mr Wagner then?
I got rattled today, a portfolio manager mentioned he is finally beating his benchmark, the SP500 after under performing against it in 2008. I nearly fell off my chair and you wanna know why I didn't fall of it, because I was not sitting on one, that's how surprised I was. I said to the PM, do you know what a benchmark is? After a 2minute rant I had to pull him up.
A benchmark is the dumbest trader you will ever find, it's mandate is, don't trade, don't think don't do anything, don't forecast don't go to school and learn econometrics don't put in stop losses don't do, just don't do, just be. That's right a benchmark is stagnant, once your in, its bloody hard to get out, and if you do violate the simple rules like mcap, they only kick you out every 3months, I mean Citi bank is still in benchmarks, kick it out. So how can we not beat the benchmark? Transaction costs? Are you kidding me I can buy 1million shares on scottrade for 7bucks execution. Here let me tell you how to beat a benchmark, put 98pct of your cash in the SP500 ETF and research the crap out of one stock, put the remaining 2pct of your cash in the stock you have picked in the 500 you can choose from, as long as this beats say 250 of them you have outperformed the benchmark. Call yourself a hedge fund after one of the billion stars in the sky or after some greek god say, Apolo, investors love that stuff, hire two kids in colleague studying some physics degree, the likes NASA go for, don't put them on full time of course just give them a case of beer and ask them if you can put them down on your company website and away you go. Then on your CV you put that you ran a fund, beat the benchmark with a quantitative focus combined with an alpha overlay. Sounds impressive and all is true.
I still do not know why we have benchmarks and how MSCI can make so much cash in these things when all they are used for is so someone can say I beat it or I did not when trying to raise cash. Your benchmark should be do you have more money to trade with today than you did this time last year. Why not use Berkshire Hathaway as a benchmark if he is the smartest guy in the room for a value investor, so if you run a value fund why isn't his company your benchmark, he trades, he buys and sells. We spend money on these benchmarks then we spend money on sophisticated risk models that tell us why we have deviated from the benchmark (the dumb trader) and where the risks may be? Think about that for a second we buy more tools to tell us why we didn't perform like the benchmark? Just be smart make good decisions and make money, keep it simple. But alas how can you increase assets under management if you don't sound sophisticated and use vendor benchmarks and vendor risk models and hire PhD's as they say, if it walks like a duck, talks like a duck, it must be a duck. So lets keep using these easy to beat benchmarks and buy tools to explain the risks we are taking by making small bets against these benchmarks and let's be ducks.
I have not put on my overall market shorts again, still waiting to reload that gun, but OIL and FCX I am short short short.
Giddy Up
http://www.youtube.com/watch?v=J4joUa_IE3c&NR=1
Tuesday, March 31, 2009
Monday, March 30, 2009
walking on sunshine
Great time of year in the Northern Hemisphere, days get longer, skies look bluer, tennis rackets come out, women wear less to work and the best of all, the horses gear up for the main events like the Kentucky Derby. The best smell in the world is cut grass but alas none of that hear in NYC. But the next thing to be cut is stock prices.
http://www.youtube.com/watch?v=eONhto0x_nI&feature=related
What is oil doing above 50 dollars again, I am shorting that no demand for energy outside grain in 2009. Speaking of grain have you ever eaten Fennel Seeds, got some the other day, great to chew on if you like a licorice type taste, cheap as chips so passes the recession proof test but luv the taste, it also helps you digest foods.
http://www.youtube.com/watch?v=2xvnN8HGwKc
The China story is still being talked up, but every developed nation around China is falling over, Japan, NZ, Australia all getting bitten by the recession bug and somehow they still forecast 7pct growth in China in 2009, NO CHANCE. They produce and the rest of the world buys, well we ain't buying. America propping up defunct banks but the rest of the world will not and cant due to the ability to raise cash in their currencies and also due to the size of their banks relative to their economies. So global banks to fall over or get taken over while the US props them up only to realise they have made a mistake.
Time to reload my shorts after weeks on the sidelines, unemployment racing above 10pct in the USA and it will not be out of breath when it gets there. SRS, BGZ, it could even be time to short individual stocks that have ran up like, FCX. It deals in copper which has raced up recently, all I know is copper goes into pipes which goes into construction and I have not seen ANY of that going on, must be China buying stuff and putting it into holes again for later use, either way its run its course at 41 bucks a share, short that.
Giddy Up
http://www.youtube.com/watch?v=eONhto0x_nI&feature=related
What is oil doing above 50 dollars again, I am shorting that no demand for energy outside grain in 2009. Speaking of grain have you ever eaten Fennel Seeds, got some the other day, great to chew on if you like a licorice type taste, cheap as chips so passes the recession proof test but luv the taste, it also helps you digest foods.
http://www.youtube.com/watch?v=2xvnN8HGwKc
The China story is still being talked up, but every developed nation around China is falling over, Japan, NZ, Australia all getting bitten by the recession bug and somehow they still forecast 7pct growth in China in 2009, NO CHANCE. They produce and the rest of the world buys, well we ain't buying. America propping up defunct banks but the rest of the world will not and cant due to the ability to raise cash in their currencies and also due to the size of their banks relative to their economies. So global banks to fall over or get taken over while the US props them up only to realise they have made a mistake.
Time to reload my shorts after weeks on the sidelines, unemployment racing above 10pct in the USA and it will not be out of breath when it gets there. SRS, BGZ, it could even be time to short individual stocks that have ran up like, FCX. It deals in copper which has raced up recently, all I know is copper goes into pipes which goes into construction and I have not seen ANY of that going on, must be China buying stuff and putting it into holes again for later use, either way its run its course at 41 bucks a share, short that.
Giddy Up
Monday, March 23, 2009
Muni's
Municipal bonds, never really dealt with them, they are as exciting as watching paint dry on a cold day in the middle of a snow storm. But I did a bit of research today. Muni's are basically how local governments and cities fund their growth. Issue a muni, grab the cash spend half on things they don't need and waste the other half on things they need but don't know how to build.
http://www.youtube.com/watch?v=sm1Jyusyoqk&feature=related
Anyway a triple A Muni has about 0pct chance of default history says and all classes of Munis right down to non-investment grade historically all together only default around .2pct so as safe as chips.
Now here is a thought, governments, states, cities and consumers all have one thing in common, we ALL geared up massively in 2000-2006 when we all had jobs if we wanted one. Now we all have one thing in common and I use the term "we all" loosely here, massive debt and no real way to pay it off. So why are munis any different? When tax receipts were at all time highs and unemployment at 6pct in 2006 these instruments looked safe, now with tax receipts going way way down as unemployment races to 10pct how do these leveraged cities pay the interest due on these muni's? Maybe hire less people, less fireman etc but that just puts us back in the same downward spiral.
Over 3,000 of these instruments were in default in 1935
Nearly 90% of the 310 cities with populations of over 30,000 were rated Aaa in 1929. Nearly 98% of this same group were rated Aa or better. Of all defaulting issues, 48.1% were Aaa rated in 1929 and 78.0% were rated Aa or better.
The fact is they can't, short munis.
Giddy Up
http://www.youtube.com/watch?v=sm1Jyusyoqk&feature=related
Anyway a triple A Muni has about 0pct chance of default history says and all classes of Munis right down to non-investment grade historically all together only default around .2pct so as safe as chips.
Now here is a thought, governments, states, cities and consumers all have one thing in common, we ALL geared up massively in 2000-2006 when we all had jobs if we wanted one. Now we all have one thing in common and I use the term "we all" loosely here, massive debt and no real way to pay it off. So why are munis any different? When tax receipts were at all time highs and unemployment at 6pct in 2006 these instruments looked safe, now with tax receipts going way way down as unemployment races to 10pct how do these leveraged cities pay the interest due on these muni's? Maybe hire less people, less fireman etc but that just puts us back in the same downward spiral.
Over 3,000 of these instruments were in default in 1935
Nearly 90% of the 310 cities with populations of over 30,000 were rated Aaa in 1929. Nearly 98% of this same group were rated Aa or better. Of all defaulting issues, 48.1% were Aaa rated in 1929 and 78.0% were rated Aa or better.
The fact is they can't, short munis.
Giddy Up
Thursday, March 19, 2009
The best ever warning sign
Yesterday Mr Bernakie told us what he really thinks about the global economy. Not sure if you heard it he said we will have massive unemployment, asset deflation and servere bankruptcies both on a country level and consumer level. You might have missed it you might have heard him say we are buying 1trillion in treasuries to artificially lower the interest rates to make you guys borrow more to TRY and prevent the above scenario, you may have heard a bullish tone, a reason to buy stocks. Remember interest rates should have built in a risk premium and in todays market with rates so low and the borrower such a risk, I dont see much risk premium at all. So I dont see this as a bullish sign I saw it as Bernakie telling us what he really knows and thinks, don't act on what one says, act on what one does and Ben told me we in a real pickle and its bigger than we ALL thought.
But we can still make money in this environment just keep looking at the trees and judge them individually dont just see the forest.
Giddy Up
But we can still make money in this environment just keep looking at the trees and judge them individually dont just see the forest.
Giddy Up
Monday, March 16, 2009
The good, the bad and the.........
What an amazing performance by the banks last week, yeah we cashed a lazy 30pct profit and left the crumbs for the others but WOW. And I am not referring to the price movement of FAS the triple long financials we spoke about last week, to get on that wave and ride it home but WOW about the synchronised performance of the banks.
The bad, BAC came out and said we are making profits, than the ugly CITI, came out and said, can you believe it we too are making profits and even the good JPM joined in this magnificent synchronised performance.
Better organised than the vocals of the Brooklyn under 16 Christmas pageant of 2008.
The Canadian synchronised gold medal swimmers of 1988 would have even clapped at this effort by the banks. The fact that I can remember this gold medal not even I can explain but 88 was a big year for me as Australia celebrated 200 years of existence since our first convicts landed, so I remember a lot in that year, my mind was a sponge. And Bernanke on 60minutes last night giving us a forecast that we could be out of recession by the end of the year. That's a big call Mr Bernanke I mean that would in effect be the largest recession since the post war era so your not really sticking your neck out there and I do remember you said in 2007 that housing was not a bubble and the effects are contained, but alas I still like you, I think you get it now.
But the good, the bad and the ugly all teamed up last week but we all know what happened in the end of that movie.
http://www.youtube.com/watch?v=sXldafIl5DQ
But this made me think again, something I have not done for a few days, and as the king once sang to us, it brought up this little reminder.
http://www.youtube.com/watch?v=SBmAPYkPeYU
Tread carefully if your all of a sudden bullish, don't forget where we are, where we came from and where we are heading. The banking index is down 70pct from its highs at todays level and that includes the recent run. Dont forget the big picture of this economic downturn we are in, Eastern Europe in turmoil, banks to roll over, Ireland in trouble, unemployment to hit 10pct in USA comfortably, commercial property to fall off a cliff, still.
Giddy Up
The bad, BAC came out and said we are making profits, than the ugly CITI, came out and said, can you believe it we too are making profits and even the good JPM joined in this magnificent synchronised performance.
Better organised than the vocals of the Brooklyn under 16 Christmas pageant of 2008.
The Canadian synchronised gold medal swimmers of 1988 would have even clapped at this effort by the banks. The fact that I can remember this gold medal not even I can explain but 88 was a big year for me as Australia celebrated 200 years of existence since our first convicts landed, so I remember a lot in that year, my mind was a sponge. And Bernanke on 60minutes last night giving us a forecast that we could be out of recession by the end of the year. That's a big call Mr Bernanke I mean that would in effect be the largest recession since the post war era so your not really sticking your neck out there and I do remember you said in 2007 that housing was not a bubble and the effects are contained, but alas I still like you, I think you get it now.
But the good, the bad and the ugly all teamed up last week but we all know what happened in the end of that movie.
http://www.youtube.com/watch?v=sXldafIl5DQ
But this made me think again, something I have not done for a few days, and as the king once sang to us, it brought up this little reminder.
http://www.youtube.com/watch?v=SBmAPYkPeYU
Tread carefully if your all of a sudden bullish, don't forget where we are, where we came from and where we are heading. The banking index is down 70pct from its highs at todays level and that includes the recent run. Dont forget the big picture of this economic downturn we are in, Eastern Europe in turmoil, banks to roll over, Ireland in trouble, unemployment to hit 10pct in USA comfortably, commercial property to fall off a cliff, still.
Giddy Up
Wednesday, March 11, 2009
The only time the word hope made sense
Bob Hope, its the only time the word hope could either make you laugh or make you cash. This short clip is over 60yrs old but was before its time, they are either talking about citibank, our current policies, or all of the above.
http://www.youtube.com/watch?v=RWpU8sX10_4
I got scared again today and its the 2nd time I have been long this year and the 2nd time I have felt scared. So FAS was closed out today, 20pct upside yesterday and a lazy and unconvincing 8pct today and to you mathematicians out there that's more than 28pct on the original and if your not sure why, than that also explains why banks SHOULD make money on us small folks if they stuck to what they were built for. Plenty of easy money to be made in this world, we just need to keep it simple, like bottled water and hamburgers, keep it simple.
Well in my ground research work today I asked a few cowboys that were bullish their exit strategies, 4 out of the 5 gave answers like, 50pct gain and this kind of pie in the sky stuff. I then asked 8 shorts what their exit strategies were (more shorts as surprisingly there were more of them) 6 gave very good responses, some looking for the day unemployment hits 10pct, a few said when the first bank is fully nationalised another said when more than 30pct of commercial property in Manhattan is vacant or in 3mth arrears, but I cant believe I left him before asking how or what index do you track that on and another said when civil war breaks out in either Eastern Europe, or real unrest in China or even Iran got a mention. Anyway the point is the shorts have a strategy, a purpose, know what they are looking for and as such appears to be the smart money, the longs are just your every day chap that thinks the DOWn is 50pct cheaper than it was 18months ago so it must go up, mmmmm not much conviction or purpose there, more like a gamblers mentality, I bet if I asked him if I had 8blacks in a row on a roulette wheel and you had one bet to make would it be red or black, I am tipping he would have taken red. Another to her credit actually stuck the neck out and called a stock to be long, SBUX. Well I went past one on the way back home and decided to give the coffee burners a shot. I asked for single express (10cents to make, I am talking the beans here), and a small latte which they very well markedly call, tall, I find it insulting actually as I know straight out of the gate I am in a shop that has fully tried to bluff me the moment I ask for a small and they say you mean tall. Anyway a latte would cost about 30cents to make I think, tops. The bill came to 5.65 USD, which is a 30minute massage in Thailand and they don't just rub your back down there, its a totally different meaning to the word, full body down there. I can understand over paying for say a Prada bag as it may give off some kind of image or something I don't know but I get it, but coffee, nah I ain't having that. So SBUX not for me, not going long that. Very easy to dismiss that thesis.
So alas this dead cat bounce which we have made a nice little earner from is one to now stay away from, if it rips another 10pct good on it, we have a better risk premium to short it with. Go long from here if you would bet a red after 9 blacks in a row, otherwise lets smoke a peace pipe on this market for a little while and wait for the paint to dry then it will tell us when to strike. So I am all back in cash again.
Oh I will sleep better tonight knowing I am no longer long.
Giddy Up
http://www.youtube.com/watch?v=RWpU8sX10_4
I got scared again today and its the 2nd time I have been long this year and the 2nd time I have felt scared. So FAS was closed out today, 20pct upside yesterday and a lazy and unconvincing 8pct today and to you mathematicians out there that's more than 28pct on the original and if your not sure why, than that also explains why banks SHOULD make money on us small folks if they stuck to what they were built for. Plenty of easy money to be made in this world, we just need to keep it simple, like bottled water and hamburgers, keep it simple.
Well in my ground research work today I asked a few cowboys that were bullish their exit strategies, 4 out of the 5 gave answers like, 50pct gain and this kind of pie in the sky stuff. I then asked 8 shorts what their exit strategies were (more shorts as surprisingly there were more of them) 6 gave very good responses, some looking for the day unemployment hits 10pct, a few said when the first bank is fully nationalised another said when more than 30pct of commercial property in Manhattan is vacant or in 3mth arrears, but I cant believe I left him before asking how or what index do you track that on and another said when civil war breaks out in either Eastern Europe, or real unrest in China or even Iran got a mention. Anyway the point is the shorts have a strategy, a purpose, know what they are looking for and as such appears to be the smart money, the longs are just your every day chap that thinks the DOWn is 50pct cheaper than it was 18months ago so it must go up, mmmmm not much conviction or purpose there, more like a gamblers mentality, I bet if I asked him if I had 8blacks in a row on a roulette wheel and you had one bet to make would it be red or black, I am tipping he would have taken red. Another to her credit actually stuck the neck out and called a stock to be long, SBUX. Well I went past one on the way back home and decided to give the coffee burners a shot. I asked for single express (10cents to make, I am talking the beans here), and a small latte which they very well markedly call, tall, I find it insulting actually as I know straight out of the gate I am in a shop that has fully tried to bluff me the moment I ask for a small and they say you mean tall. Anyway a latte would cost about 30cents to make I think, tops. The bill came to 5.65 USD, which is a 30minute massage in Thailand and they don't just rub your back down there, its a totally different meaning to the word, full body down there. I can understand over paying for say a Prada bag as it may give off some kind of image or something I don't know but I get it, but coffee, nah I ain't having that. So SBUX not for me, not going long that. Very easy to dismiss that thesis.
So alas this dead cat bounce which we have made a nice little earner from is one to now stay away from, if it rips another 10pct good on it, we have a better risk premium to short it with. Go long from here if you would bet a red after 9 blacks in a row, otherwise lets smoke a peace pipe on this market for a little while and wait for the paint to dry then it will tell us when to strike. So I am all back in cash again.
Oh I will sleep better tonight knowing I am no longer long.
Giddy Up
Its better to be lucky than smart
Well after we booked 60pct gains in Feb when global markets fell double digits, we were lucky yesterday to be long FAS and even though it jumped out of the gate up 15pct before we could strike we rode the last 20pct up on the triple long financials, getting to be very predictable this market we just need to be patient and let the extreme events occur and its vital to watch CNBC with the volume off. Not many can buy when it opens 15pct up your told to wait for a pull back, well if you want to ride the ultimate wave be prepared to pay the ultimate price.
http://www.youtube.com/watch?v=k2vkwy2vdP4
Great movie point break if you have forgotten it, go get it, for 10years I wanted to be a bank robber after watching that movie and surf, well I robbed banks yesterday by buying FAS even though I have written for months stating their demise. This is what I would have said to you if you missed the opportunity
http://www.youtube.com/watch?v=Fh0KcpYeMVQ
It is better to be lucky than smart but the smarter you are the luckier you are but the more text book you think the more vulnerable you are. Everything in life should be broken down to a simple form and if you can do that you have something, just like Einstein did when creating the atom bomb. Unfortunately the higher educational guys, the PhD's the Masters and all that can't break things down they are taught to build them up to some sophisticated model. So when a lucky hedge fund guy driving home from work saw the foreclosure signs in California 2years ago start to increase in the streets he drives on, he joined the dots very quickly and saw the house of cards about to unravel and made cash on CDS. When the PhD guy drove home he was texting his mates on the IPHONE about the model he built and how it was so complex, you see the foreclosures just wasn't appearing in his numbers yet he needed a few more data points to be statistically significant and so he ignored the noise. Well if a girl at the bar says to me, piss off I don't want to talk to you, I don't need any more of those data points to draw a conclusion, trust me its statistically significant if its a STRONG signal. You only need one of those data points.
So lets continue to be lucky and play this simple game, keep the triple long financials on but every day now going forward I think I am wrong. Every morning when I wake up I feel slightly sad, because I know I am about to try and prove why I am wrong and no one likes to be wrong every day. Its a tough way to live life but its profitable.
If I cant prove that I am wrong than it means I must be right, and therefore made money.
But as soon as I prove I am actually wrong I have a chance to save my money and not only that feel great as I am now right. Think about that for a second its actually the perfect hedge, I have hedged life as I am only disappointed when I cant prove that I am wrong, which means I am therefore right and I have more chance of being lucky.
Giddy Up
http://www.youtube.com/watch?v=k2vkwy2vdP4
Great movie point break if you have forgotten it, go get it, for 10years I wanted to be a bank robber after watching that movie and surf, well I robbed banks yesterday by buying FAS even though I have written for months stating their demise. This is what I would have said to you if you missed the opportunity
http://www.youtube.com/watch?v=Fh0KcpYeMVQ
It is better to be lucky than smart but the smarter you are the luckier you are but the more text book you think the more vulnerable you are. Everything in life should be broken down to a simple form and if you can do that you have something, just like Einstein did when creating the atom bomb. Unfortunately the higher educational guys, the PhD's the Masters and all that can't break things down they are taught to build them up to some sophisticated model. So when a lucky hedge fund guy driving home from work saw the foreclosure signs in California 2years ago start to increase in the streets he drives on, he joined the dots very quickly and saw the house of cards about to unravel and made cash on CDS. When the PhD guy drove home he was texting his mates on the IPHONE about the model he built and how it was so complex, you see the foreclosures just wasn't appearing in his numbers yet he needed a few more data points to be statistically significant and so he ignored the noise. Well if a girl at the bar says to me, piss off I don't want to talk to you, I don't need any more of those data points to draw a conclusion, trust me its statistically significant if its a STRONG signal. You only need one of those data points.
So lets continue to be lucky and play this simple game, keep the triple long financials on but every day now going forward I think I am wrong. Every morning when I wake up I feel slightly sad, because I know I am about to try and prove why I am wrong and no one likes to be wrong every day. Its a tough way to live life but its profitable.
If I cant prove that I am wrong than it means I must be right, and therefore made money.
But as soon as I prove I am actually wrong I have a chance to save my money and not only that feel great as I am now right. Think about that for a second its actually the perfect hedge, I have hedged life as I am only disappointed when I cant prove that I am wrong, which means I am therefore right and I have more chance of being lucky.
Giddy Up
Monday, March 9, 2009
bobby bad fingers
Well I couldn't believe it when I heard the term decoupling mentioned again, like pink football boots I thought I had seen and heard the end of that.
You have to be kidding, we are more interlinked than the jewelry on the queen of Sheba's wrists and here is your proof. A few days ago I had a christening to attend so I went to a toy store to buy a gift and a religious card, well the toy was made in Taiwan the card was made in Mexico, I used my HSBC card which stands for, Hong Kong & Shanghai banking corp, the guy who runs the store is from Pakistan, I am Australian my girlfriend is from Honduras, we live in NYC and the parents of the child, one is from England the other is from America. Finally something from America. Decoupling are you kidding the only thing that has decoupled are bobby bad fingers and his thumbs but even they get together every now and then, spend 10minutes of your life on youtube searching his stuff you wont be disappointed and if there is one thing this great nation of America is good for its creating characters like this guy, best exports we have really and a lot more useful than a GM warranty.
http://www.youtube.com/watch?v=1iPv7gXKMjQ
If you want to ever fire me up mention the term decoupling in a serious sentence. Well before they said China wont be affected by Americas slow down, now that's been buried they say China will grow while America doesn't, good luck with that thesis. Yeah they might FINALLY create an internal demand as the ROW has stopped buying from them but I wouldn't call it decoupling not in today's world.
With a meeting scheduled on Thursday regarding banks and mark to market which shouldn't be changed but WILL be changed. You may want to get some FAS triple long financials but don't hang on to them like a big 36D women as you will end up having your heart broken. Be in and out like a bank robber as that's how you will feel. Mark to market, last year they said it was wrong as it didn't value the assets properly as there was no market, you want to know why a year ago we had no market for it, well check the price today, that's why, it was crap. Anyway it shouldn't be change, any major bank like Citi or BAC that needs a rule change on one major instrument to help them survives just hides the cracks we have in risk control, greed and all that jazz. Anyway lets just follow the herd on this one but get out before you get mad cow.
Giddy Up
You have to be kidding, we are more interlinked than the jewelry on the queen of Sheba's wrists and here is your proof. A few days ago I had a christening to attend so I went to a toy store to buy a gift and a religious card, well the toy was made in Taiwan the card was made in Mexico, I used my HSBC card which stands for, Hong Kong & Shanghai banking corp, the guy who runs the store is from Pakistan, I am Australian my girlfriend is from Honduras, we live in NYC and the parents of the child, one is from England the other is from America. Finally something from America. Decoupling are you kidding the only thing that has decoupled are bobby bad fingers and his thumbs but even they get together every now and then, spend 10minutes of your life on youtube searching his stuff you wont be disappointed and if there is one thing this great nation of America is good for its creating characters like this guy, best exports we have really and a lot more useful than a GM warranty.
http://www.youtube.com/watch?v=1iPv7gXKMjQ
If you want to ever fire me up mention the term decoupling in a serious sentence. Well before they said China wont be affected by Americas slow down, now that's been buried they say China will grow while America doesn't, good luck with that thesis. Yeah they might FINALLY create an internal demand as the ROW has stopped buying from them but I wouldn't call it decoupling not in today's world.
With a meeting scheduled on Thursday regarding banks and mark to market which shouldn't be changed but WILL be changed. You may want to get some FAS triple long financials but don't hang on to them like a big 36D women as you will end up having your heart broken. Be in and out like a bank robber as that's how you will feel. Mark to market, last year they said it was wrong as it didn't value the assets properly as there was no market, you want to know why a year ago we had no market for it, well check the price today, that's why, it was crap. Anyway it shouldn't be change, any major bank like Citi or BAC that needs a rule change on one major instrument to help them survives just hides the cracks we have in risk control, greed and all that jazz. Anyway lets just follow the herd on this one but get out before you get mad cow.
Giddy Up
Cat Stevens
It's not time to make a change, your so young its not your fault, find a girl settle down........
http://www.youtube.com/watch?v=Q29YR5-t3gg&feature=related
Well lets pull our heads in and not go to far but I have had my first bullish sign in years. But like mum in a toy store, I still aint buying.
I made a stock list today, kind of a watch list and trust me the only thing I have watched in the last 2 years are horse races and girls. So I thought I don't want stocks that need to roll over debt in atleast 2yrs maybe 3, have little debt, cashed up, and sell something that in years to come should still have a need, ah if only brothels were listed on an exchange.
Well I found 10 and 8 were tech stocks which then got me started on the subject of diversification a common requirement for an investor that doesn't know what there doing. You see to diversify is to spread risk and that's where I raised my hand in economics. I still remember that day it was 40degrees and our lecturer was sweating like a hooded first time rapist. Well I asked in class if I'm a fund manager and paid to research and invest why should I feel the need to diversify is it because I'm no good and don't have conviction in my thoughts. No he said its to spread risk. I left the class puzzled and to a degree I still em. Anyway the point here is if your good don't diversify, if I find stocks that are worth investing in and they are largely tech then why should I not just own them. I'm in this to make money not to limit risk, by being smart you limit risk, by understanding who you are and how your emotions take over than you have limited risk. Oh and how about fund of funds don't get me started on these fees of fees.
Which brings me to a recent discussion on Bernie and how he was the blame for the 50billion scandal. Well I felt like a guy that walked into a lesbian birthday party when I said, what did he do wrong. Why is he at fault, we have had criminals since Adam bit the apple and I hate to tell ya were gonna have them in the future as well, and I should know as my country Australia was built on criminals, an entire nation built on chicken theives. Put humans and cash together and you don't always get gravy. So Bernie wasn't the issue I was trying to point out, it was the system, the fund of funds due dilligence or lack of, the SEC and so on not Bernie, actually he has educated us opened our eyes to a poorly run system. But that won't stop me from making my watch list of stocks, they say do accounting and economics to understand stocks and scrutinise a balance sheet, I say do phycology understand humans first and put that in a risk model.
Giddy up
http://www.youtube.com/watch?v=Q29YR5-t3gg&feature=related
Well lets pull our heads in and not go to far but I have had my first bullish sign in years. But like mum in a toy store, I still aint buying.
I made a stock list today, kind of a watch list and trust me the only thing I have watched in the last 2 years are horse races and girls. So I thought I don't want stocks that need to roll over debt in atleast 2yrs maybe 3, have little debt, cashed up, and sell something that in years to come should still have a need, ah if only brothels were listed on an exchange.
Well I found 10 and 8 were tech stocks which then got me started on the subject of diversification a common requirement for an investor that doesn't know what there doing. You see to diversify is to spread risk and that's where I raised my hand in economics. I still remember that day it was 40degrees and our lecturer was sweating like a hooded first time rapist. Well I asked in class if I'm a fund manager and paid to research and invest why should I feel the need to diversify is it because I'm no good and don't have conviction in my thoughts. No he said its to spread risk. I left the class puzzled and to a degree I still em. Anyway the point here is if your good don't diversify, if I find stocks that are worth investing in and they are largely tech then why should I not just own them. I'm in this to make money not to limit risk, by being smart you limit risk, by understanding who you are and how your emotions take over than you have limited risk. Oh and how about fund of funds don't get me started on these fees of fees.
Which brings me to a recent discussion on Bernie and how he was the blame for the 50billion scandal. Well I felt like a guy that walked into a lesbian birthday party when I said, what did he do wrong. Why is he at fault, we have had criminals since Adam bit the apple and I hate to tell ya were gonna have them in the future as well, and I should know as my country Australia was built on criminals, an entire nation built on chicken theives. Put humans and cash together and you don't always get gravy. So Bernie wasn't the issue I was trying to point out, it was the system, the fund of funds due dilligence or lack of, the SEC and so on not Bernie, actually he has educated us opened our eyes to a poorly run system. But that won't stop me from making my watch list of stocks, they say do accounting and economics to understand stocks and scrutinise a balance sheet, I say do phycology understand humans first and put that in a risk model.
Giddy up
Tuesday, March 3, 2009
Lightning Strike
As I sip on my double malt whisky this morning and the markets are down again a sudden wave of reality hits me in the face like a hot latino does in a dark night club when approached. Any guy that can tame a latino is a true reflection of a man.
Well its Tim the tax dodger Geithner, where is he?? The kid after being booed in his first ever school play is out trying to get it right, Tim is talking to everyone, his old Goldman mates, his first school teacher and is getting the detail and the balance right for his next speech on the banks and that scares me as a short, the boy is THINKING and that scares me. Paulson didn't think nor did Bush they reacted over weekends with 1page TARPs to solve a decade issue, I want our leaders to think about 2010 and beyond and write off 2009, the previous cowboys literally acted like they were looking at their stock portfolios and made decisions on that. Lets face it, citi and BOA need to be nationalised, we are going to hit 10pct unemployment in the US so lets face it and look beyond with policy. Lightning has struck, Tim is gonna do a performance better than Angus of ACDC http://www.youtube.com/watch?v=7wWKqXf2rhE&feature=related), and as I am short I am scared, its the same feeling I get when an English soccer player takes a penalty in an important knock out match and I am not even English. I just feel the tension in the bars when watching an England game and it transcends through your body, every time I see Beckham on TV I think of that kick he missed against Portugal and what about John Terry for Chelsea in the champions league final last year the poor kid puts 4 lumps of sugar in his coffee now, he is still that bitter and just cant get the sour taste out of his mouth. Well thats how I feel about being short now and if I feel that so do other shorts and they will cover for now. Psychology says cover shorts, fundamentally I know we go lower. So emotion being short term usually rules so I close today.
This does not change the general thesis of, banks to roll over, eastern europe to sink, china to jail protesters and so on, this is just a lightning bolt that says I take the shorts off, bank our near 60pct profit in a month and reload the gun for a later day. If you dont eat it or shot it or even better both, you just cant go long it right now.
If your a junkie that needs real action then get yourself some triple longs BGU trading at 15 and change but with a tight stop. Personally not for me I rather bank the 60pct and wait and see if I can short again at a better entry. I cant personally go long with so much to still unravel. Look at the poor Sri Lankan cricket team today being shot at and wounded, if you ever need a reminder of the times and unrest there it is. And trust me this kind of action has a much bigger agenda they are trying to trigger off, maybe to get some neighbouring countries to start yelling at each other then eventually start something big, can you imagine if India didn't call off that tour, thats why Sri Lanka went, because India cancelled, I dont like that, seems like plan A didnt get cancelled, maybe Gold has a shine on it again?
Giddy Up
Well its Tim the tax dodger Geithner, where is he?? The kid after being booed in his first ever school play is out trying to get it right, Tim is talking to everyone, his old Goldman mates, his first school teacher and is getting the detail and the balance right for his next speech on the banks and that scares me as a short, the boy is THINKING and that scares me. Paulson didn't think nor did Bush they reacted over weekends with 1page TARPs to solve a decade issue, I want our leaders to think about 2010 and beyond and write off 2009, the previous cowboys literally acted like they were looking at their stock portfolios and made decisions on that. Lets face it, citi and BOA need to be nationalised, we are going to hit 10pct unemployment in the US so lets face it and look beyond with policy. Lightning has struck, Tim is gonna do a performance better than Angus of ACDC http://www.youtube.com/watch?v=7wWKqXf2rhE&feature=related), and as I am short I am scared, its the same feeling I get when an English soccer player takes a penalty in an important knock out match and I am not even English. I just feel the tension in the bars when watching an England game and it transcends through your body, every time I see Beckham on TV I think of that kick he missed against Portugal and what about John Terry for Chelsea in the champions league final last year the poor kid puts 4 lumps of sugar in his coffee now, he is still that bitter and just cant get the sour taste out of his mouth. Well thats how I feel about being short now and if I feel that so do other shorts and they will cover for now. Psychology says cover shorts, fundamentally I know we go lower. So emotion being short term usually rules so I close today.
This does not change the general thesis of, banks to roll over, eastern europe to sink, china to jail protesters and so on, this is just a lightning bolt that says I take the shorts off, bank our near 60pct profit in a month and reload the gun for a later day. If you dont eat it or shot it or even better both, you just cant go long it right now.
If your a junkie that needs real action then get yourself some triple longs BGU trading at 15 and change but with a tight stop. Personally not for me I rather bank the 60pct and wait and see if I can short again at a better entry. I cant personally go long with so much to still unravel. Look at the poor Sri Lankan cricket team today being shot at and wounded, if you ever need a reminder of the times and unrest there it is. And trust me this kind of action has a much bigger agenda they are trying to trigger off, maybe to get some neighbouring countries to start yelling at each other then eventually start something big, can you imagine if India didn't call off that tour, thats why Sri Lanka went, because India cancelled, I dont like that, seems like plan A didnt get cancelled, maybe Gold has a shine on it again?
Giddy Up
Monday, March 2, 2009
How to test a banker
I went to a great surprise party in Jersey on the weekend, I knew no one there but took the liberty to be the only drunken aussie that did the usual, speak to everyone, dance with everyone, always have a drink in atleast one hand and sing out loud to songs you have no clue of the words to. But although a lot of the night was a bit of a blur I do recall one conversation with a well known banker on, Nationalisation.
I mentioned how citi was nationalised and he said, no american bank will get nationalised, yes I coughed in reply and like a cat stalking a lame injured bird or even better like that guy in the corner of a bar that sees a girl stumble out of the bathroom, I pounced. Nationalisation is a topic no one seems to understand, a bit like how in 2008 everyone was saying the data does not suggest we are in a recession then in December of 08 they finally say we have been in a recession for a full year, mmmm these guys are advising you on how to invest?
Well I said to the well dressed banker if your stock price goes from 50 and trickles down to 5 then the govt takes a 40pct stake in you and the stock then goes down to 1.50 I think every shareholder that owns citi would say to you if this isnt nationalisation it sure as hell feels like it, smells like it and if I could touch it.........
Just like the recession last year it felt like one but no one agreed we were in it. Same as nationalisation. You only need 25pct to have real power on a board and 40pct even more so.
So as I could tell I had somehow offended him I continued to do so as no point burning the house you may as well torch the barn too. So I asked him if a magician has 52 cards in a deck, shuffles them and the magician gets his assistant to choose one card, she remembers it and puts it back in to the deck of cards and the magician shuffles the cards again, what probability does he have off choosing the same card she did. Well the banker said 1 in 52 as he sipped his cognac and slapped his wife on the back. NO I said, he has a 100pct chance, you forgot he is a MAGICIAN.
That is why quants, PhDs, majority of hedge funds and research teams missed the housing crisis, credit crisis, commodity bubble, they fail to see whats around the numbers.
Stay short no reason yet to go long, I am always looking for a reason just cant find one yet.
GIDDY UP
I mentioned how citi was nationalised and he said, no american bank will get nationalised, yes I coughed in reply and like a cat stalking a lame injured bird or even better like that guy in the corner of a bar that sees a girl stumble out of the bathroom, I pounced. Nationalisation is a topic no one seems to understand, a bit like how in 2008 everyone was saying the data does not suggest we are in a recession then in December of 08 they finally say we have been in a recession for a full year, mmmm these guys are advising you on how to invest?
Well I said to the well dressed banker if your stock price goes from 50 and trickles down to 5 then the govt takes a 40pct stake in you and the stock then goes down to 1.50 I think every shareholder that owns citi would say to you if this isnt nationalisation it sure as hell feels like it, smells like it and if I could touch it.........
Just like the recession last year it felt like one but no one agreed we were in it. Same as nationalisation. You only need 25pct to have real power on a board and 40pct even more so.
So as I could tell I had somehow offended him I continued to do so as no point burning the house you may as well torch the barn too. So I asked him if a magician has 52 cards in a deck, shuffles them and the magician gets his assistant to choose one card, she remembers it and puts it back in to the deck of cards and the magician shuffles the cards again, what probability does he have off choosing the same card she did. Well the banker said 1 in 52 as he sipped his cognac and slapped his wife on the back. NO I said, he has a 100pct chance, you forgot he is a MAGICIAN.
That is why quants, PhDs, majority of hedge funds and research teams missed the housing crisis, credit crisis, commodity bubble, they fail to see whats around the numbers.
Stay short no reason yet to go long, I am always looking for a reason just cant find one yet.
GIDDY UP
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