Month: December 2012

One reason I’m optimistic on the markets for 2013 is that finally the U.S. looks like it’s going to do something about the deficit.  The bad news is that it’s a very sloppy and public process.  The good news is that neither Democrats or Republicans have an appetite for doing anything remotely austere.  In this case a gradual cure is better than the shock and awe treatment some proponents proclaim is needed.

Buffett on US Debt Problem: ‘We’ll Get It Solved’ Published: Friday, 28 Dec 2012 | 12:54 PM ET By: Alex Crippen   Despite the intense political fighting over just the “fiscal cliff,” Warren Buffett is optimistic the nation’s overall debt problem will eventually be fixed. In an interview on BBC Radio 4’s “Today” program, Buffett said, “In the end, 535 people in Washington will not thwart the wishes of 312 million Americans.” “America has faced a lot tougher problems than this one. We’ll get it solved.” Warren Buffett “The United States is richer than it’s ever been. We have $50,000 … Read more

2012: The Year in Graphs Posted by The Wonkblog Team on December 27, 2012 at 11:12 am As 2012 draws to a close, Wonkblog asked our favorite professional wonks — economists, political scientist, politicians and more — to see what graphs and charts they felt did the best job explaining the past year. Here are their nominees. Sheila Bair — former chairperson, Federal Deposit Insurance Corp. (FDIC) “There has been much discussion about income inequality, but not enough focus on its corollary: debt inequality. As real wages for the masses decline, they try to sustain consumption through borrowing from the … Read more

Winning With Losers By ANDREW BARY | MORE ARTICLES BY AUTHOR An early-year strategy of embracing the previous year’s worst S&P 500 stocks has produced fat gains One early-year investment strategy is to buy the prior year’s 10 biggest losers in the S&P 500 in hopes that they’ll bounce up in early January. This approach has worked well in the past three years. In fact, the 10 biggest decliners from 2011 started 2012 with a bang, gaining an average of 13.7% in the first two weeks of January, compared with their Dec. 31 close, against a 2.5% rise for the overall index. … Read more

One of our first screens is insider buying and selling.  Although we think  from time to time we might have some perspective or glint of information correct that the maddening crowd has perceived wrong, we don’t delude ourselves into thinking that we have a better bead on what’s going on than the people running the business do.  Right now must of them have been sellers as noted in the graph below courtesy of the Washington Service. Click on it to enlarge.  The faint pink horizontal line is the normal ratio of buyers/sellers.  Anything above the line is heightened buying and … Read more

Who’s writing this script?  It’s almost corny.  How can you go over a cliff that everyone agrees is there and would be a bad thing to do?  You probably can’t but right now the market is starting to believe we can.  The last hour of the day and the hour after the close were reminiscent of panic voiced news commentators from 2008.  By 30 minutes after the close, futures markets were expecting a down 315 point day Monday.  The oddity is that when all is settled through the close Friday the S&P 500 is barely down 1% for the month … Read more

.Apple gives people a lot of reasons to buy their products.  They’re beautiful, they work, and they are a good place to work for.  I’m sure Apple will not disappoint its shareholders as well. Signs of Changes Taking Hold in Electronics Factories in China December 27, 2012 “Apple takes working conditions very seriously and we have for a long time. Our efforts range from protecting to empowering to improving the lives of everyone involved in assembling an Apple product. No one in our industry is doing as much as we are, in as many places, touching as many people as … Read more

Compiled by Michael of Investment Watch blog, What a year 2012 has been!  The mainstream media continues to tell us what a “great job” the Obama administration and the Federal Reserve are doing of managing the economy, but meanwhile things just continue to get even worse for the poor and the middle class.  It is imperative that we educate the American people about the true condition of our economy and about why all of this is happening.  If nothing is done, our debt problems will continue to get worse, millions of jobs will continue to leave the country, small businesses … Read more

UBS Admits Rigging Rates in ‘Epic’ Plot This confirms my suspicion that much more than previously known about the markets is rigged.  Over the years my market philosophy has heavily depended on confirmation by insiders for this very reason.   By DAVID ENRICH and JEAN EAGLESHAM UBS will pay $1.5 billion to settle accusations by regulators that the bank tried to rig benchmark Libor rates. Arrests are expected to follow. WSJ’s David Enrich reports. Photo: Reuters U.S., U.K. and Swiss authorities alleged a vast conspiracy led by UBS AG UBSN.VX -0.33% to rig interest rates tied to trillions of dollars in … Read more

Muni buyers and owners listen up.  If you haven’t been paying attention you might not know but in the last week the value of your muni bond portfolio has dropped 5%.  The trade that looked good after the Presidential election is starting to look very very bad.  I’ve said time and time again you don’t get compensated enough in the fixed income markets for the multitude of risk you take.  Interest rate risk, event risk and now Government risk. Timothy L. Firestine, the top government administrator in Montgomery County, Md., is crunching numbers in his battle to preserve the hallowed … Read more

No one knows more about housing than this guy.  In fact no one knows more about the economy in general.  He’s the man in my opinion. There is a video of the entire Economics class he teaches available for free download on Apple U. It’s still too soon to call a bottom in housing, much less the start of a boom, says Yale University economist Robert Shiller. It’s still too soon to call a bottom in housing, much less the start of a boom, Yale University economist Robert Shiller said Wednesday on CNBC. via Robert Shiller: Don’t Await Housing Boom.

I thought this article from Saturday’s NY Times was propitious and something Sax Angle readers could benefit from.  After reading this, one can’t help but draw the conclusion that we are heading into a lot more volatility during the first part of the New Year.  These things invariably get worked out or as Winston Churchill was quoted as saying, ” depend upon the Americans to do the right thing after they’ve tried everything else.”  Volatility can be your best friend or your worst nightmare.  ONLY YOU can decide which one that will be. The government is within days of hitting … Read more

Ironic, we have been railing about this for some time now.  Glad to see the WSJ picking up the baton. In 2007, a top securities regulator warned that executives could be abusing preset plans to buy and sell their companies stock “to facilitate trading based on inside information.””Were looking at this—hard,” Linda Chatman Thomsen, then-enforcement chief at the Securities and Exchange Commission, told a conference of corporate lawyers. via SEC Draws Fire Over Executive Trading Plans – WSJ.com.

Insiders know what they are doing.  They have a huge advantage over the common stock investor. That’s why the SEC has laws intended to level the playing field.  Come to our Investment Survival Workshop Wednesday 6:00PM at the Blind Dog and learn how you to can GAME the system,too. By SUSAN PULLIAM, JEAN EAGLESHAM and ROB BARRY Federal prosecutors and securities regulators are taking a deeper look into how executives use prearranged trading plans to buy and sell shares of their company stock. The Manhattan U.S. attorney’s office has launched a broad criminal investigation into whether seven corporate executives cited … Read more

I’m not predicting a housing price collapse but all four of these events are almost certain to happen to some degree and none of them are good for house prices.   Four Major Events That Could Topple The Housing Market All Over Again Has The US Housing Market Really Bottomed? Most Americans have heard of the “fiscal cliff.” The term — first used last year by Federal Reserve chairman Ben Bernanke — refers to the economic disaster that awaits America if tax increases, spending cuts and budgetdeficit rules go into effect in January 2013 if the Democrats and Republicans in … Read more

The next and last Investment Survival Workshop for 2012 will be Wednesday, December 12th at the Blind Dog at 6:00PM.   No Products or Services are sold at these workshops.  They are for qualified investors with at least $500,000 of liquid assets.   If you haven’t been to one of these workshops you are missing the most informative investment experience you will likely have all year.  The feedback has been overwhelmingly positive.  This workshop will be conducted by Jeff Day and Harvey Sax.  Mr. Sax is one of the top ranked long short equity fund managers according to Barclay Hedge, … Read more

I thought this article in today’s NY Times was interesting considering that so much of insider trading is readily available to anyone that wants to take the time to follow and analyze the SEC filings.  Read more about our views on this money making strategy at Learn how insiders beat the market.     Insider Trading Persists, and Gets Stealthier – NYTimes.com.

Recent pull pack in a number of these names stimulated insider buying.  Perhaps the largest amount of buying in this name, CYS.  The Fund picked up a sizeable stake.   CYS is a mortgage REIT that invests primarily in Agency RMBS. It pays a great 14.05% dividend. With the Fed backing up the housing industry, this is one of the safest investments in an uncertain investment world. The Fed is not likely to let the housing market drop much from here. The Fed is keeping mortgage rates low. It has said that it will keep Fed Funds rates low until … Read more

The Dow Jones Credit Suisse Hedge Fund Index Finished Up 0.64% in November   New York, December 17, 2012 – The Dow Jones Credit Suisse Hedge Fund Index (the “Broad Index”) finished up 0.64% for the month of November. Performance for the Broad Index and its 10 sub-strategies is calculated monthly. November, October and YTD 2012 performance numbers are listed below and are available atwww.hedgeindex.com.   Category Nov 2012 Oct 2012 YTD 12 Dow Jones Credit Suisse Hedge Fund Index 0.64% -0.18% 6.10% Convertible Arbitrage 0.22% 0.25% 6.36% Dedicated Short Bias -0.43% -0.07% -17.97% Emerging Markets 1.10% 0.35% 7.72% Equity Market Neutral … Read more

  FRANKFURT — For all the talk about Germany’s financial exposure to Greece, it turns out that some German banks have a problem of more titanic proportions — their vulnerability to the global shipping trade. Germany’s 10 largest banks have €98 billion, or $128 billion, in outstanding credit or other risks related to the global shipping industry, according to Moody’s Investors Service. That is more than double the value of their holdings of government debt from Greece, Ireland, Italy, Portugal and Spain. And it is more than any other country’s financial exposure to the shipping industry, which is in the … Read more

This chart from BlackRock states the obvious. Most people are terrible investors.  The real question is how much better is BlackRock.     Volatility is often the catalyst for poor decisions at inopportune times. Amidst difficult financial times, emotional instincts often drive investors to take actions that make no rational sense but make perfect emotional sense. Psychological factors such as fear often translate into poor timing of buys and sells. Though portfolio managers expend enormous efforts making investment decisions, investors often give up these extra percentage points in poorly timed decisions. As a result, the average investor underperformed most asset … Read more

Some Analysts Doubt Dire Predictions on Tax Increase Fallout By NATHANIEL POPPER As anxious investors assess their portfolios in light of expected tax increases on investment income, hedge fund manager Douglas Kass has a simple message: Relax. Related Debt Reckoning: The Fiscal Deadline in Washington Mr. Kass, the founder of Seabreeze Partners Management, thinks much of the investing world has overestimated how hard the markets and investors would be hit if tax rates on dividends and capital gains rise at the end of the year, as the White House has proposed. via Some Economists Doubt Dire Effects From Tax Increases … Read more

The Dow Jones Credit Suisse Hedge Fund Index Finished Down 0.18% in October   New York, November 15, 2012 – The Dow Jones Credit Suisse Hedge Fund Index (the “Broad Index”) finished down 0.18% for the month of October. Performance for the Broad Index and its 10 sub-strategies is calculated monthly. October, September and YTD 2012 performance numbers are listed below and are available at www.hedgeindex.com.   Category Oct 2012 Sep 2012 YTD 12 Dow Jones Credit Suisse Hedge Fund Index -0.18% 1.04% 5.42% Convertible Arbitrage 0.25% 0.40% 6.12% Dedicated Short Bias -0.07% -3.78% -17.62% Emerging Markets 0.35% 2.21% 6.55% Equity Market Neutral … Read more

Goldman’s Top Ten Market Themes For 2013 Submitted by Tyler Durden on 12/02/2012 16:55 -0500 Whether you trust the squid and their thought process or believe in ‘better the devil you know’, Goldman’s top thinkers – from Garzarelli to Himmelberg and from Stolper to Hatzius and Wilson – lay out the top ten global macro themes from their economic outlook that will dominate markets in 2013. Agree or disagree, one thing is for sure – these ten ‘themes’ will impact us all one way or another and for each theme, Goldman discusses the wider implications for markets, and the potential … Read more