Insomniac Hedge Fund Guy

One of the foremost mathematicians of our time and the father of quants James Simons – Mathematics, Common Sense, and Good Luck: My Life and Careers Simons has about 9,000 views on YouTube The other is by Ray Dalio, who runs Bridgeport Associates (reportedly the world’s largest hedge fund)  Dalio has a lot more views about 350,000. How the Economic Machine Works Then again you could watch What Does the Fox Say with a 149 million views    

Calendar opportunities Week of October 21 There has been a lack of Government data due to the partial shutdown so economic data will be intensely scrutinized, then out of hand dismissed as being inaccurate or irrelevant depending on the old Wall Street axiom, how can you ‘screw the most people, most of the time’.  After the recent run-up earnings disappointments might offer more pin action than surprises. Earnings season kicks off for real Monday.  This is always a sketchy time for nervous longs.  Follow us on Twitter @saxangle.com for the latest moves we might make. Monday October 21st Maybe we … Read more

I agree, one reason we are fully invested. By E.S. BROWNING CONNECT Associated Press The Washington mess of the past few weeks was ugly and disruptive for financial markets. It could do more damage in December as investors contemplate resumed acrimony when 2014 arrives. Yet it all has a silver lining. ‪ The federal government’s shutdown and threat of default on U.S. debt spawned anxiety among businesses and consumers, hurt the U.S.’s image around the world and took about half a percentage point off fourth-quarter economic growth, economists estimate. But the economy kept growing. Inflation stayed low. And the turmoil … Read more

‘Steve Jobs patent’ upheld by USPTO, ‘massive setback’ for Samsung and Google | TalkAndroid.com. So ironic that on a day when Google stock launched over $100 points and $30 billion in market value, the news that all of Apple’s touch capacitive screen patents were upheld by the USPO on challenge, seem to interest only geeks and me.  We bought more Apple on this news Friday and it is now our largest position by far in the Fund.  After such a momentum trader’s blowup run, Google’s stock could collapse on this news when the talking heads on CNBC and Wall Street … Read more

We are rarely full invested. We are now.  There is a time to press your bet and this is it at least for the next few weeks.  Even now we are not fully invested in equities but have a mixture of REITS, MLPs, beaten down closed in bond funds but we do have a lot of exposure to stocks.  Everything is working.The Fund is having its best month of the year and we are only half into it.   Our investors can check out our latest holdings as always at saxangle.com/portfolio-holdings-10-18-13/. A word of caution, there does seem to be an … Read more

What? No Christmas rally? Going forward, the near-term road map is a bit murky.  The move from ~1675 to the close (~1692) Thurs was a lot about “pain” but it seems like the most inappropriate positioning has been corrected.  Therefore, to get back to ~1700+ will require more clarity out of Washington and given that 1) this 6 week plan is still vague and 2) a big new deadline has now been placed on the calendar (11/22) investors may be reluctant to chase much further from here.  Stepping back, even in a perfect world (i.e. Washington resolution, strong Q3 earnings, moderate Fed policy withdrawal, … Read more

Since now the drama of who Obama will select for the the Fed Reserve head is over, what’s next? I found this good and telling article on Zero Hedge. Selecting The Next Federal Reserve Chair: Submitted by Tyler Durden on 07/23/2013 13:28 -0400Alan Greenspan Ben Bernanke Bill Dudley Bond Federal Reserve Goldman Sachs goldman sachs Institutional Investors Intrade Janet Yellen Larry Summers Monetary Policy Nomination Paul Volcker Tim Geithner Volatility Wall Street Journal White HouseinShare Federal Reserve Chairman Bernankes term expires January 31, 2014. While his continuation as Fed chair cannot be ruled out, he has given no public indications that … Read more

What shutdown?  My two kids,14 and 20, asked me what the Government shut down meant.  They never ask me about current events.  They get all the info they need about the world from Facebook and You Tube but they asked me about the shutdown.  First of all there  really is no shutdown, I told them.  I also told them there was not much to worry about yet.  Since we weren’t going to any national parks or D.C, they wouldn’t notice it. I didn’t tell them that if the country didn’t pay its bills, the results would be cataclysmic. I don’t … Read more

In spite of this massive Government attack the stock acts very well.  If anything JP Morgan seems to be hurt more by the very short term reversal the rise of  interest rates than the Government assault.  As a shareholder I would be aggravated that they are settling for such an amount.  Didn’t they get some kind of indemnification when they bought Bear and WAMU at the Government’s behest?  We are buyers below $47 as we have sold Oct 47 Puts short. Government lawyers are backing up the truck again at J.P. Morgan Chase JPM +0.37% to extract another haul from the … Read more

by Henry Blodget I don’t know when Henry finds the time to opine on the market but he’s someone I listen to and respect considering how he was thrown under the bus only to get up even stronger.  But when it comes to his market calls forget it.  He was the analyst that buried more people in the 2000 Dot com crash than anyone else.  In fact he was railroaded out of the business and maybe rightfully so.  So Henry, keep up the great work on Business Insider but leave the market calls to people with a better track record, … Read more

Submitted by Tyler Durden on 09/22/2013 11:05 -0400 In a world in which all the matters is “scale”, the ability to Martingale down on losing bets as close to infinity as possible something which JPMorgan learned with the London Whale may not be the best strategy especially when one cant print money out of thin air, and being as close to the Feds Heidelberg rotary printer as possible, it was expected that that “expert” of government backstops and bailouts, the Octogenarian of Omaha, Warren Buffett, would have only kind words for Ben Bernanke. But not even we predicted that Buffett … Read more

I’m not trying to find something to say about the iPhone. I just can’t help myself.  Apple is one of those things you seem to have to talk about.  Like your health, your job, or your lover you suspect is cheating on you.  I am not even pissed about the stock.  We blew out of Apple before the Friday open when it was in the green, then bought some back $7 bucks lower after the close.  Damn day traders.  That’s a shame because I despise day traders but there’s no denying it.   Apple has become a day trader’s form of … Read more

My wall of worry is growing. 1Debt whatever 2.Bernanke flip flop 3. October health care surprise 4. October surprise 5.  Too many IPOs 6. Too many insiders selling 7. No one buying 8. Earnings warnings 9. Momentum stocks of all stripes are soaring, 10. Let me think about it.  There must be something else.

Do You Have A Million Dollar Problem?   According to the Federal Reserve’s inflation forecast of 2% per year your $1 million today will be just $817,301 in ten years.  That’s probably optimistic.* Maybe your investment advisor can help you keep up? Not likely. 80% of professionals don’t even beat the market according to SPIVA.* You say that’s all right.  You abandoned these overpaid do-nothing advisors years ago and now you manage your own account with low cost index funds.  Good luck.  The S&P 500 has just now reached  the highs of 2000 when adjusted for inflation. You have earned zip, … Read more

Fed officials kept the central bank’s $85 billion-per-month bond-buying program in place, saying they wanted to see more evidence the economy can sustain improvement before scaling back.  The bull roars!  S&P rises 20.76 points and the Dow lifts 147.  Priceline breaks $1000 and surpasses Federal Express market cap. The last week we have been adding to MLPs like Kinder and El Paso, REITS, Utilities, and high yield bond funds.  That was very opportune for us.  We bought these beaten down groups because that’s about the only  thing insiders have been buying.   I think we are well positioned for the … Read more

The Credit Suisse Hedge Fund Indexes Performance data for Aug 2013 has been updated. Please visit our site athttp://www.hedgeindex.com for further details.   Credit Suisse Hedge Fund Index Performance Index / Sub Strategies Value** Aug 13 YTD 1 Year Annl* Std Dev* Sharpe* Credit Suisse Hedge Fund Index 504.30 -0.54% 4.03% 7.16% 8.58% 7.37% 0.77     Convertible Arbitrage 412.71 0.72% 4.47% 6.83% 7.47% 6.73% 0.68     Dedicated Short Bias 35.32 0.03% -17.36% -23.22% -5.15% 16.68% -0.48     Emerging Markets 405.34 -0.24% 2.87% 9.21% 7.38% 14.47% 0.31     Equity Market Neutral 252.48 -1.72% 3.00% 4.43% 4.82% 10.04% 0.19     Event Driven 585.72 … Read more

Barron’s publishes two  major articles this week.  The cover story is that the big money aided by their financial advisors,are getting back in risky assets with a vengeance.  See Seeking Higher Returns By KAREN HUBE via Seeking Higher Returns – Barrons.com. The next article by regular columnist Up and Down Wall Street’s Randall Forsyth states that when magazine covers herald a bull market it’s a reliable indicator that it’s over and the opposite is about to happen.  Beware the Bull . Who are you supposed to believe?  The financial advisors that missed the enormous run from the bottom that has doubled … Read more

One of our best clients forwarded this to me. I thought this was interesting since Apache is is our largest holding at Sax Angle Partners, LP..  Although we lightened up it on Friday, it still remains our largest holding.  I don’t believe the market will correct significantly either.  I’m glad Barron’s publishes a track record.  That’s the first thing I look at. I’m not in the habit of taking advice from someone who is doing worse than me and our track record is more than twice better.  Nonetheless, it’s nice to hear successful market participants agreeing with you.  None the … Read more

One of the things we talk about in the Investment Survival Workshop is developing the mindset to think ahead. The point being is that when you have a regular exercise routine, you have goals in mind.  When you are planning an investment strategy, it’s no different.  What’s your time period?  Are you a long-term investor or someone who is just trading week to week or even a day trader?  As part of a routine, find time to anticipate what’s going to happen for some period in the future.Everyone’s time frame will be different.   With that in mind, here are a few … Read more

Not much on the investment horizon except the Fed tapering.  Twitter’s IPO although certain to be a headline stealer won’t happen for weeks.  Syria is on the back burner.  It’s a few days early for 3rd quarter warnings.   By RANDALL W. FORSYTH “Lord, make me chaste — but not yet,” St. Augustine famously prayed. Federal Reserve Chairman Ben Bernanke and some of his colleagues on the Federal Open Market Committee may be invoking analogous words when they gather next week to consider what to do about its $85 billion-a-month bond-buying program after the “disappointing” August employment numbers reported Friday. … Read more

Smart money is betting on the Fed tapering to be announced at next week’s FOMC meeting.  Analysts believe the improvement in the labor market has met the Fed’s criteria to begin trimming its buybacks.  I believe they are likely to be very careful tampering with MBS as long-term rates for housing have already risen from 3 5/8 % to 4 7/8% in just a few months since they first mentioned tapering.  I am sure they are concerned that rising rates will be a drag on the housing recovery.  Meanwhile inflation remains soft and Bernanke would like to be able to leave … Read more

Chansoo Joung a two year  board member of Apache stepped up and bought 10,000 shares at $86. on 9-3-13.  That’s a striking buy not just for the size but for the timing.  Apache announced a surprise deal with the Chinese government owned Sinopec on 8-29 causing the stock to rally 9% the following day.  Undoubtedly Mr. Joung was aware of the deal and was restricted from buying prior to the announcement.  This large purchase is significant because he bought after a strong run-up and considering Mr. Joung’s background, he might have been instrumental in bringing the Chinese on board giving … Read more

Monday September 2nd Markets closed for Labor Day.  That didn’t stop the futures from closing Monday morning up 16.25 S&P points, 112 Dow points.  Chinese PMI numbers but mostly Syrian attack delay all contributed to the rally.  The week’s news headlines are likely to be consumed with the Congressional debate on whether the U.S should embark on some military action against the Syrian regime as punishment for their use of chemical weapons.  Since nothing will apparently be decided until the following week as Harry Reed said he would put up to vote the week of September 9th. The markets will … Read more

Ironic we predicted this in a blog post back in May. saxangle.com/the-very-cryptic-thing-apache-oil-ceo-said-at-bernstein-conference-today/ Besides this being the validation Apache needed for its Egyptian assets, it’s a real statement on geopolitics.   The Chinese apparently were talking to Apache about investing in Egypt for quite some time.  After all they are notorious as a nation for being slow and deliberate.  It was only when the military threw out the “democratically” elected Muslim Brotherhood candidate that the Chinese pulled the trigger on the deal.  They are after all more comfortable dealing with a military dictatorship than a democratically elected president.  That’s what the … Read more

U.S. single-family home prices rose in June, though the pace of gains slowed slightly, a closely watched survey showed on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent on a seasonally adjusted basis. Prices rose 1 percent in May. On a nonadjusted basis, prices rose 2.2 percent. Compared to a year earlier, prices were up 12.1 percent, in line with economists’ expectations. Prices were up 12.2 percent in the year to May, the biggest gain in more than seven years. Robert Shiller, Case-Shiller Index co-founder, breaks down the latest numbers on housing, with the “Squawk … Read more

Not sure if it was the Kerry press conference or the sobering headline about the debt shenanigans that caused the market sell off.  I wish there was a way to play volatility increasing that actually works because we are going to get more of it as September unfolds. By DAMIAN PALETTA CONNECT WASHINGTON—The Treasury Department said it would hit its borrowing limit in mid-October and be unable to pay all of its bills soon after that time, narrowing the window the White House and Congress have to maneuver on budget talks. The deadline, which is sooner than many on Capitol … Read more

We pivoted Friday, playing off the weak new home sales data, into more interest rate sensitive names.  Blue chip dividend paying stocks, MLPs, bonds in general, utilities, telcos, and tobaccos have all been relative weak players during the last few weeks as the market comes to terms with Bernanke’ and the Fed’s tapering.  Markets will get increasingly nervous about U.S. budget debates in Congress when Congress returns in September.  When next September Congress returns, refreshed, all Hell will (appear to) break loose according to this Forbes article.  There are only 9 legislative days in September, with the end of the fiscal … Read more