Just because its a cartoon

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