Insomniac Hedge Fund Guy

One of the more colorful quarterly earnings calls this season. Its refreshing to find someone who is buying their stock when all of the Googles, Linkedin, Yelps, Facebooks, etc of the world can’t sell it fast enough. http://blogs.wsj.com/corporate-intelligence/2014/01/16/why-oil-tycoon-rich-kinder-feels-undervalued/?mod=WSJ_qtoverview_wsjlatest

  By ERIC MORATH CONNECT The state making the fastest climb up the millionaire rankings doesn’t have a single Tiffany or Saks Fifth Avenue store. The closest BMW dealership is a six-hour drive from the capital. Welcome to North Dakota, which jumped 14 spots in the annual rankings of millionaire households per capita released by Phoenix Marketing International. The firm derives its figures from a combination of data from the Federal Reserve, Census Bureau and polling firm Nielsen Co. (See a slideshow of the top 10 states) There were approximately 53,000 more millionaire households in the U.S. last year than … Read more

  December 2013 Performance of the HFRX Indices   HFRX INDICES – STRATEGY 2014 Glocap Hedge Fund Compensation Report Monthly Performance Historical Performance DEC ROR NOV ROR 2013 INDEX VALUE (DECEMBER 31, 2013) Last 36 M (ann) Last 48 M (ann) Global HFRX Absolute Return Index 0.29% 0.45% 3.57%   989.00 0.20% 0.12% HFRX Aggregate Index 0.84% 0.57% 8.31% 1,544.18 3.07% 4.17% HFRX Equal Weighted Strategies Index 0.49% 0.33% 6.29% 1,197.06 0.73% 1.85% HFRX Global Hedge Fund Index 0.56% 0.55% 6.72% 1,225.49 0.22% 1.44% HFRX Market Directional Index 0.89% 0.25% 9.50% 1,158.07 -2.76% 0.13% Equity Hedge HFRX Equity Hedge Index 1.25% 0.96% … Read more

No coincidence, Business Insider pumps this story when Apple is the rare up name in an ugly tape.  I do agree with the thesis and one up it, Apple is just plain cheap.  The Nest acquisition is a bit troubling, though.  I’m sure Google overpaid but the iPod is to the iPhone as the Nest is to the __?  You see the guy that started Nest, supposedly created the iPod. ( didn’t Jobs do that?) JAY YAROW Apple CEO Tim Cook should be happy. What a difference a year makes for Apple. In 2013, Apple’s stock was in a tail spin, analysts were … Read more

China overtakes US as world’s largest goods traderBy Jamil Anderlini and Lucy Hornby in Beijing©AFPChina became the world’s biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December.The total value of China’s imports and exports in 2013 was $4.16tn, a 7.6 per cent increase from a year earlier on a renminbi-adjusted basis, according to figures released by the Chinese government on Friday. via China overtakes US as world’s largest goods trader – FT.com.

Sax Angle Partners owns EEM, iShares MSCI Emerging Market ETF.  We prefer to invest in companies where management is buying but that information is not available in these markets and having just got back from China last month, I find it hard to ignore it completely.  The Financial Times reported today that China became the world’s biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December.   Ahead of the Crowd | THURSDAY, JANUARY 9, 2014 Emerging Market Stocks Are too Cheap to Ignore By JACK HOUGH | MORE … Read more

This scary chart from the Washington Service provides a graphical view of the flight from equities by C level officers and directors.  There has not  been a time in recent years when insiders have unloaded as much stock as now. Insider selling is not as good an investment clue as buying but still one has to wonder.  Shouldn’t you be a little wary of buying the very stock those insiders are unloading?  Particularly those of companies whose stock price defies traditional financial analysis, the momentum stocks. Momentum stocks always have the same premise.  Ordinary accounting and financial valuation rules don’t … Read more

Beware of the black swan. Black swan events were introduced by Nassim Nicholas Taleb in his 2001 book Fooled By Randomness, which concerned financial events. His 2007 book The Black Swan extended the metaphor to events outside of financial markets. Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as “black swans”—undirected and unpredicted. He gives the rise of the Internet, the personal computer, World War I, dissolution of the Soviet Union, and the September 2001 attacks as examples of black swan events. My top Black Swan events for 2014 and how to recognize them early and successfully survive them if not outright profit from them. 1. Market crash– early … Read more

Only two names on this list grab me as having notable recent insider buying  They are Apache and Tenet Healthcare.   By Ben Levisohn Picking underperforming stocks has not been a winning strategy over the long term. It can, however, succeed in the short term–especially at the beginning of the year and when combined with low valuations. Goldman Sachs’ strategist Stuart Kaiser and team explain: Lower valuation stocks have outperformed peers by an average of 420 bp in 1Q during the past 35 years vs. just 170 bp in all other quarters. Buying laggards has also performed well early in … Read more

2013 – a look back at performance metrics for the year US equities saw gains across the board in 2013.  DJIA +26.5%, SPX +29.6%, SPR +30.12%, Nasdaq +38.32%, Wilshire 5K +30.45%, Russell 2K +37%. The DJIA, SPX, and RTY are all at all-time nominal highs.  However, of the “Big 3” US indices (DJIA, SPX, CCMP), only the DJIA has achieved all time REAL highs (adjusted for inflation).  The SPX still has another ~10-13% to go (depending on how one measures inflation).  The Nasdaq hasn’t even achieved fresh nominal highs. Within the SPX, gains were broad w/several sectors outpacing the broader index.  Some of … Read more

This is the time you get 2014 predictions.  For the most part this is a completely worthless endeavor and a waste of your time unless you are a contrarian.   For me, it’s interesting reading and I am a contrarian. We will publish a few of them and if we seen anything noteworthy, I’ll highlight it.   Overview2014 should bring with it slightly better economic growth and a slow increase in real interest rates.We believe investors should continue to overweight equities in their portfolios.Additionally, we suggest avoiding Treasuries and TIPS and focusing on fixed income credit sectors.2013: A Year of … Read more

By GREGORY ZUCKERMAN, ROB COPELAND and NICOLE HONG CONNECT Updated Jan. 1, 2014 8:26 p.m. ET A trader who made more than $100 million from a $10 million bet against gold. A hedge fund that gained 42% after a bullish wager on stocks. A firm that saw returns of 48% thanks in part to soaring Japanese stocks. via Tepper, Tudor and Paulson Were Among 2013’s Big Winners – WSJ.com.

If you haven’t heard the cash registers churning away yet, it’s because you have no imagination.  Estimated sales today, the first day I read were $395 million already with long lines forming.   Since the state gets 25% of this take, expect Colorado coffers to rapidly fill up.  Sure fire winners are Colorado GO muni bonds. Whether its a matter of time before dozens of states follow suit or Colorado and Washington remain the new pot capitals is hard to say. Worlds first legal recreational marijuana sales begin in Colorado – The Denver Post.   Below is a link to Colorado … Read more

Thank you to all of our followers this year.  We are lucky as the market has been very forgiving and generous to long investors.  This article from the Journal talks about just how successful “boring investors” were. It’s a good New Year’s resolution though not to confuse smarts with luck.   How many of  us were 100% invested in stocks at the beginning of the year?  Most sophisticated investors probably started the year with a traditional blend of 60% equity 40% bonds  or some mixture of cash in their portfolios.    Bonds had their worst year in 20 yrs. Cash returned zero.  That … Read more

This is one heck of an interesting speech delivered by self-exiled American hacker/bad boy Jacob Applebaum.  I listened to half of it and came away with the conclusion if he died suddenly it would certainly not be surprising to anyone. Attendees at the Chaos Communications Congress in Hamburg this weekend got a surprising rundown of the NSA’s surveillance capabilities, courtesy of security researcher Jacob Appelbaum. Appelbaum, who co-wrote the Der Spiegel article that first revealed the NSA catalog, went into further detail onstage, describing several individual devices in the catalog and their intended purposes. THE EXPLOITS COULD BE DELIVERED BY … Read more

Interesting article for me as we have a similar investment style.  They have a long short insider fund as well which we have significantly outperformed.  Their long only fund is smoking it this year as you would expect.  It’s not doing any better than the market when you account for sales charges though.     Insider Buying: These Stocks Are CEO FavoritesBy GRACE L. WILLIAMS Portfolio manager David Miller buys only companies whose top execs put their own money on the line.ArticleComments 5EmailPrintReprints smallerLargerWhile many fund managers use complex strategies to try to outsmart the market, David Miller of Catalyst … Read more

Henry Blodget calls for stock market crash again.  Good work Henry. I really love the charts  but we all know a broken clock is right twice a day. As for market crashing, I think the warm up signs are pretty similar.  Large swings up and down, dramatic pick up in volatility.  Think summer of 1987, tech bubble of 2000 and oil price gyrations in 2008 all augured for big price moves.  We are not quite there but I do expect some black swans paddling by.  My hunch is a collapse in social media stocks, China banking meltdown, or Israeli preemptive strike on … Read more

A Holiday Gift for Apple Shareholders By TERESA RIVAS | MORE ARTICLES BY AUTHOR A deal that will open up the vast China market to iPhones should help the stock for years to come. Apple investors got an early Christmas present after the tech giant inked an agreement over the weekend to supply iPhones to the world’s largest mobile network. Yet we think Apple stock is the gift that will keep on giving in 2014. Late Sunday, Apple (ticker: AAPL) announced that it had reached a multiyear agreement with China Mobile (CHL) to supply it with its iPhone 5s and iPhone 5c. … Read more

Where’s the next Black Swan event coming from?  My guess China or Iran/MidEast.  The banking sector in China has been discussed as train wreck waiting to happen. By SHEN HONG And DINNY MCMAHON CONNECT Dec. 23, 2013 7:50 a.m. ET A cash crunch in China pushed short-term interest rates to a new recent high Monday and highlighted the difficulties faced by the central bank in managing an increasingly complex and stressed financial system. Rates rose again despite cash injections last week by the People’s Bank of China, 601988.SH +1.53% which has tried to rein in lending but is facing crosscurrents … Read more

This remarkable editorial from the Saudi Ambassador to the UK is tantamount to a call to arms.  We have been buying some of the oil companies (APA, APC, OXY, CLR as they have sold off nicely on the fear of an oil glut developing much like the natural gas price collapse that occurred in North American gas. There are two reasons why this will not happen.  Unrefined petroleum products are not really landlocked like natural gas.  For example there is no restriction (practical or legal) on refined petroleum products.  In fact exports are at record highs.  Second and that is … Read more

Mar 2015 Feb 2015 YTD 1 Year Avg Index / Sub Strategies Currency Value ROR Value ROR Return Return Annl* Std Dev* Sharpe* Credit Suisse AllHedge Index USD 135.96 0.39% 135.43 0.93% 1.79% 3.20% 2.97% 6.55% 0.24 Convertible Arbitrage USD 116.88 -0.44% 117.40 0.72% 0.00% -4.48% 1.50% 10.65% 0.01 Dedicated Short Bias USD 39.78 -0.40% 39.94 -6.07% -4.10% -4.35% -8.40% 15.08% -0.65 Emerging Markets USD 172.58 1.19% 170.55 0.15% 2.59% 13.12% 5.33% 12.92% 0.30 Equity Market Neutral USD 82.05 0.06% 82.00 -0.49% -0.92% -3.78% -1.87% 9.00% -0.36 Event Driven USD 157.80 0.26% 157.39 2.35% 1.26% -4.43% 4.44% 7.57% 0.40 Fixed … Read more

If I had to call it, I’d say buy the tapering.  But we don’t trade the market we trade in individual ideas.  None the less the market has been week due to its preoccupation with Fed easy money and a plethora of supplies in newly minted IPP.  The S&P 500 March contract is testing 1753 where the 50 day moving average awaits.  It will probably undercut this and set the market for a nice Santa Claus rally.  Stocks are still the only game in town and nothing much is going to change that this year.   12 Dec 2013 North … Read more

  Sunday, 15 Dec 2013 | 5:02 PM ET CNBC’s Sri Jegarajah takes you through the results of this week’s forex sentiment survey. Dollar bulls are betting the Federal Reserve will start cutting stimulus measures as early as this week, CNBC’s latest poll of currency traders, analysts and strategists showed. The Fed may reduce the monthly pace of bond purchases by between $5 billion and $10 billion at its policy-setting this week – Chairman Ben Bernanke’s last before his term expires at the end of January 2014 – as recent data suggests that the economy is gaining momentum. “Mr. Bernanke … Read more

The view from the Bund of Shanghai, the Pudong section of town.  To get some idea of the scale, the tall building under construction to my right is the Shanghai Tower. It is the tallest of a group of three supertall buildings in Pudong, the other two being the Jin Mao Tower and the Shanghai World Financial Center.  At the time of its topping out in August 2013, the Shanghai Tower was the tallest building in China and the second-tallest in the world, surpassed by the Burj Khalifa in Dubai. The video below was shot from the observation deck of the 100th floor of the Shanghai World Financial Center. That’s the highest observation … Read more

By STEPHANIE BANCHERO CONNECTUpdated Dec. 3, 2013 7:12 a.m.ET I just returned from 10 days in China.  The last part of the trip we visited a family friend and former intern of mine, Max Leary.  Max is enrolled in the Business and Financial Services Program at Hong Kong Polytech.  It’s no surprise to me that Shanghai students now rank #1 in the world in public education.  The Chinese people are ambitious, serious, and there is no social media.  The kids study a lot.  I mean a lot.  The PISA scores show that.  And Shanghai, the city, blew our mind.  The … Read more

All for One: China’s New Deal What appears to be the country’s generous new bargain is actually a move to strengthen the state By ANDREW BROWNE CONNECT Updated Nov. 22, 2013 7:53 p.m. ET China announced both economic and political reforms to pave the way for the country’s future. The WSJ’s Andrew Browne tells Deborah Kan what Xi Jinping’s China is shaping up to look like. If human figures were represented at all by the ancient masters of Chinese landscape painting, they appeared as black specks—mere spatters of ink on a silk scroll. This rendering of people with the flick of a brush was intended to demonstrate man’s insignificance before the power of nature, but it also mirrored a political reality that has endured to this day. In Chinese civilization, the … Read more

I am on a short 10 day trip through China’s major cities, Beijing, Shanghai, and Hong Kong. I wanted my kids to get a sense of the Asian imperative, the thousands of bright ambitious young Chinese swelling the ranks of our universities. The Chinese are coming and what better way than to get a feel than to come to them.  First observations is that there is a very pervasive and scary form of Internet censorship.  I can’t get the New York Times but I can get the Wall Street Journal from the hotel wifi. I think if I had told … Read more

If insiders are the smart money, no one told that to the Chairman of the Board,  William Macaulay as he bought $3.1 million dollars worth of stock nearly 7% higher than where it closed on Tuesday only three days ago.   I quote from the 14k ” William E. Macaulay has been the Chairman of our Board of Directors since October 2004. Mr. Macaulay is the Chairman, Chief Executive Officer, and a Managing Director of First Reserve Corporation (“FRC”), a private equity firm focusing on the energy industry, which he joined in 1983. FRC was an affiliate of our former indirect parent, … Read more

One of my favorite clients sent me this article.  This is something we have known to be true for a long time of course as we are the”insider’s fund”.  What is conspicuously absent from the reporters’s story is the revelation of the “short swing rule”.  This is the game changer and what makes insider buying such a timely indicator. Insiders Can Give an Edge By FRANCESCO GUERRERA CONNECT Nov. 18, 2013 3:04 p.m. ET Michael Babich seems like the right kind of insider trader—the legal kind. In mid-August, Mr. Babich, chief executive of the pharmaceutical company Insys Therapeutics Inc., INSY … Read more