Insomniac Hedge Fund Guy

We  are large owners of CCL , the largest cruise line operator. We initiated a position around $32.95 and have watched it rise to its present price of $36 where it seems to be building a base.  There have been several management changes recently, most notably, long time CEO and Founder Mickey Arison, passed the day to day operating duties to a new CEO.  This apparently is a good thing as he might have been diverted by being a billionaire and owner of NBA Champions Miami Heat.  Our thesis is that demographics are overwhelmingly supportive of cruising and that China … Read more

We will be hosting our 12th Investment Survival Workshop.  Each event highlights different ideas and in these two workshops, we’ll talk about finding the next big thing.  Where to look, how to evaluate it, is it for real, and finally does it work? Come join us at workshops.saxangle.com This Tuesday, July 16th at Noon in our Park City offices and Thursday, July 18th same time same place.  Quote of the day.  There is a lot of hedge fund bashing in the media these days now that advertising is about to be legal for the industry.  Try this one on  from the … Read more

  As the second quarter comes to a close Friday, Benzinga looks back on the best performing stocks of the quarter.  Click below to see the results. And now for the shocker, the best performing Dow stock of the quarter was Microsoft Corp. (NASDAQ: MSFT) may have problems with slow PC sales and with Windows 8 being a disappointment, but it was the top DJIA performer of the second quarter. Its stock closed at $34.54 for a 21.57% gain. via SLIDESHOW: Top 10 Performing S&P 500 Stocks of the Second Quarter | Benzinga.

Feds Plosser Admits Fed Was Responsible For Last Housing Bubble, Doesnt Want To “Create Another”Submitted by Tyler Durden on 07/12/2013 12:00 -0400 The “mutinying” half of the Fed – that which the FOMC minutes indicated wanted an end to QE by the end of 2013 – is not going to take Bernankes Wednesday steamrolling lying down. Enter Charles Plosser, who becomes a voting member next year:PLOSSER SAYS FED SHOULD HALT QE BY END OF THIS YEARGood luck there. But here is the punchline:PLOSSER SAYS WE DONT WANT TO CREATE ANOTHER HOUSING BOOMFinally, someone from the Fed admits it was Greenspans … Read more

Complete 2013 Year To Date Hedge Fund Performance Submitted by Tyler Durden Bloomberg took hedge funds to task with a rather graphic cover, suggesting the hedge fund community doesnt actually provide value. We disagree: hedge funds certainly can provide value especially those who are too big to fail, syphon inside information, and whose army of lawyers makes them untouchable to government prosecution if only to their LPs and other investors, however not in an environment where none other than the central banks task is to manage risk. Which explains why for the fifth year in a row, or roughly since … Read more

Fed Affirms Easy-Money Stance Bernanke sought to reassure markets that while the Fed could start winding down bond buying later this year, officials aren’t abandoning their broader commitment to easy-money policies. via The Wall Street Journal – Breaking News, Business, Financial and Economic News, World News & Video – Wall Street Journal – Wsj.com.

We preach following insiders.  It’s no wonder why. What’s amazing is that many people including very smart people think they have a better idea of what’s going on than the very people inside running the business.   By SUSAN PULLIAMand ROB BARRYCONNECT One day in September 2011, Wall Street analysts trundled into the spacious lobby at the Livonia, Mich., plant of a company called A123 Systems Inc. to view a slide presentation describing a rosy outlook for the maker of lithium batteries. View Graphics”They stood up in front of investors and painted a very bullish picture,” said Andrea James, an … Read more

Why the entire U.S health insurance system is broken and the eventual likelihood of regulation of the health insurance industry. Don’t bet on it, though.  The outcome is inevitable but the timing is uncertain.  As the old saw goes, “What’s the difference between being wrong and early? None.” Americans are dying sooner and living with more illness than residents of Slovenia and other less prosperous countries, according to the latest study showing the U.S. is getting a poor return on money it spends on care. Americans lost more years of life to heart disease, lung cancer, preterm birth complications, diabetes … Read more

I’m staying pat on Apache even though the street seems to be pushing down the stock on Egypt anxiety.  Then again, maybe something else is afoot as the Egyptian stock market is rallying and credit default swaps on the sovereign debt is decreasing,  On Tuesday the cost of insuring against an Egyptian government debt default tumbled as news of the Gulf aid packages calmed fears that Egypt’s already fragile economy could be hit by a balance-of-payments crisis. Egyptian credit-default swaps, which investors use as insurance against defaults or to bet on creditworthiness of countries and companies, fell by 120 basis points to … Read more

Can Chesapeake really be a good value?  It sure seems so based on the large amount of recent insider buying.  This is all the more notable since insiders are not buying much of anything in this elevated market.  I’ve been doing this long enough to know that when insiders are buying and you can’t see the logic, don’t doubt it.  There is always something there. You might not be able to see it, but that doesn’t mean the catalyst isn’t there.  It also doesn’t mean that it will ever come to bear either so you can’t be stupid about blindly … Read more

Kudus to this fantastic piece of investigative journalism.  This is why the Times is still irreplaceable in a world of social media nonsense.  I never have invested in frontier markets but the Egyptian market may now be a worthy speculation.  There is only way to invest in it so the choices are simple.  Market Vectors Egypt Index,EGPT.  I AM NOT ALONE IN THIS VIEW.   The index rallied 13% this week.  Even with riots in the streets, Friday, the index was able to rise 3.28%. It is still down 50% from its 2011 high print of $82.52. This article from … Read more

This recent article from Monday July 8th Barron’s is  a good example why the average person is horrible at investing.  For example, read the small print or better yet look up the funds for yourself.  Most of them charge an average 4.7% upfront sales charge.  Basically a year or more worth of interest before you receive a dime from an income fund.   The author states that these funds in some cases produced double digit returns.  You don’t have to look further than their stock charts to see how dicey that proposition is. If you haven’t made money in a bond … Read more

I agree with the article but unlike the analyst I see the military takeover with broad popular support as a plus not a negative for price action.  Furthermore I expect APA to announce some kind of transaction in Egypt to validate the cost on their books.  Perhaps the Chinese will nibble.  Lost in the headlines today was 20 people killed in sectarian violence in Iraq and that hasn’t kept the Chinese from investing there.     Egypt Turmoil Creates Apache Buy Opportunity Apache (APA: NYSE) By Guggenheim Securities ($80.23, July 5, 2013) Apache’s stock price has been under pressure over … Read more

US bond yields soar on robust jobs growth Robust US employment figures sent bond yields soaring on Friday as the labour market showed it was healthy enough for the Federal Reserve to slow its $85bn a month in asset purchases later this year. The yield on 10-year Treasuries rose 22 basis points to 2.72 per cent – the highest since July 2011 – after payrolls rose by 195,000 in June, comfortably beating expectations. Revisions to recent data added another 70,000 jobs to the total.   The figures take average payrolls growth this year to 202,000 a month – meeting Fed … 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

Thank God is all I can say.  After going up every month of the year, the market is finally set to close with a losing month. The count is nearly over and  unless we have a 91  point Dow up day Friday or 17.5 point move in the S&P 500, the market will have its first down month this year.  And it couldn’t come a moment too soon for most money managers. We are all tired of getting our butts kicked by passive index funds and part time investors. There is an old Wall Street saying, “There’s no need for an analyst … Read more

I took the liberty of posting this email from Dan Greenhaus of BTIG   As of this morning, with the yield on the 10 year at 2.59%, yields are up (on a percentage basis) nearly 60% since hitting a low of 1.62% in early May.  On a percentage basis, that is the single largest jump over that time frame dating back to at least 1962, continuing a theme we’ve seen in the last few days.   Interestingly, all of the largest yield spikes on a percentage basis have occurred since 2003, a period characterized by greater Fed activity.   Source: … Read more

The rout in interest rate sensitive stocks, exchange traded funds (ETFs). publicly traded master limited partnerships (MLPs) and bonds presents some opportunities but not across the board.  Some sectors are more interesting than others  if you believe Chairman Bernanke’s economic forecast.  If the economy is indeed on a sustainable path toward growth and increasing employment, the economically sensitive sectors will also have improving fundamentals.  Remember, there are two things that impact fixed income like products; interest rates and business risk.  An improving economy will  help junk bonds as their business prospects will improve.  The same is true for many MLPs that are … Read more

Don’t Fear the Taper, Stocks Still Strong: Tepper Text Size Published: Friday, 21 Jun 2013 | 8:31 AM ET By: Jeff Cox | CNBC.com Senior Writer David Tepper President and Founder Appaloosa ManagementAny Federal Reserve money-tightening will come due to a stronger economy and shouldn’t scare investors, hedge fund manager David Tepper told CNBC Friday. As Wall Street digests statements earlier this week from central bank Chairman Ben Bernanke, Tepper—the widely watched head of Appaloosa Management—said the news is actually good. via Don’t Fear the Taper, Stocks Still Strong: Tepper.

I perk up when I hear the words total capitulation.  That’s usually a short term change in direction.  In this case bonds should rally if really all the sellers have thrown in the towel.  I don’t really buy it but….   What Bond-Fund Flows Say: ‘Total Capitulation’EmailPrint smallerLargerBy Brendan ConwayThose aren’t my words; they’re from Bank of America Merrill Lynch strategist Michael Hartnett. He and his colleagues call it a “blood bath” in bonds, the likes of which has only been seen a few times since the numberkeepers have been in business.Here’s what all bond-fund flows the last few weeks … Read more

1. The volatility in the markets related to Fed meetings has been accelerating. Generally the first reaction up or down was the contra trend reaction.  In other words, the market will be higher a few weeks from now rather than lower.   Today’s rout marked the worst two-day period since November 2011.  BTW that was a great buying opportunity.  I don’t feel that way today.  There is a bit of complacency still in the market that make me think this sell-off will not have a quick bounce back. 2. The market is not terribly oversold but will likely base in … Read more

We’ve sold a number of puts in some names we’d buy if  it reaches our price targets.  Wednesday, 6-13 will be an interesting day as the market probes new recent lows.  We are picking up more Dresser Rand, DRC which was recently highlighted in Bloomberg as a likely takeover candidate.  We’ve been in an out of this name twice in the last ninety days and welcome the third time. Pfizer looks interesting to us here at $27-28 and acts fairly well in a bad tape. AT&T $35 and under. Verizon between $45-48 Perennial takeover candidate Walter Energy has been pummeled in … Read more

More room to run for Apache according to widely read Heard on the Street. HEARD ON THE STREETJune 2, 2013, 7:32 p.m. ET Million Barrel Blues   By LIAM DENNING Evolution: It is messy, it takes time and some people don’t even believe in it. But it is essential for a select group of growing oil and gas companies that they master it. Occidental Petroleum, OXY -2.83% Anadarko Petroleum, APC -2.93% Apache APA -3.09% and the U.K’s BG Group BG.LN -0.16% form what Robin West, founder of consultancy PFC Energy, calls the “million barrel club.” Each could reach output of one million barrels of … Read more

They say history doesn’t repeat itself exactly, it rhymes. By NICK TIMIRAOS David McNew for The Wall Street Journal Real-estate investor Robert Ganem, shown in a Ladera Ranch, Calif., home, said he flipped 20 houses last year, double the previous year. LADERA RANCH, Calif.—Rising home prices have fueled the return of a practice that some blamed for inflating the bubble: house flipping. In California, the number of homes sold in recent months that had been flipped—or bought and resold within six months—has reached the highest levels since late 2005, according to PropertyRadar, a real-estate data firm. About 6,000 homes have … Read more

Wall Street Week Ahead: Good news on jobs may be bad for stocks By Caroline Valetkevitch NEW YORK (Reuters) – Standing conventional stock market wisdom on its head, investors may wish for weaker-than-expected employment numbers next Friday. A strong jobs report could prompt an early end to the Federal Reserve’s policy of pumping money into the banking system to rescue the economy and set off the stock market’s long-awaited pullback. The Fed’s loose monetary policy since the end of 2008 has kept interest rates low and propelled stocks to record highs. via Wall Street Week Ahead: Good news on jobs … Read more

Shareholders are not the only ones disappointed with Facebook.  Advertisers have generally been underwhelmed by their ad spends on the Facebook platform.  Apparently Millennials don’t buy much of anything.   The Real Reason Millennials Don’t Buy Cars and Homes By Rick Newman | The Exchange – Fri, May 31, 2013 11:33 AM EDT   They’re narcissistic. Apathetic. Pampered. And addicted to their four-inch screens. If you believe the conventional wisdom about the millennial generation — those 16 to 34 years of age, by most calculations — you’ve got considerable reason to worry about the future of the U.S. economy. Millennials show far … Read more