Insomniac Hedge Fund Guy

When a company as rich and valuable as Apple falls below private equity buy out values ,there are still no buyers.  Eventually Apple will buy its own stock back.  It’s not a broken company, at least not yet although it is a very broken stock now, whatever that means. The Wall Street Journal excerpt sums up my first impressions. Apparently, earning $13.1 billion in three months – the fourth-largest quarterly profit ever, mind you – is somehow a disappointment. Shares are down 6.3% in late trading amid heavy volume at $482. Apple reported earnings of $13.1 billion, or $13.81 a … Read more

Best Advice From The World’s Greatest Investors – Business Insider. I found this handy slide show presentation of investment nuggets.  Very entertaining. I especially like the format of the idea with the picture of the idea maker.  Kudus to Business Insider.  I really like Henry Blodget.  He’s on fire these days.

To many politicians, the deal that raised taxes on the wealthy and averted the fiscal cliff was a sellout, a cop-out, a Band-Aid — in short, nothing good. And now the debt ceiling showdown is looming. So why have stock investors cheered, pushing the Standard & Poor’s 500-stock index to five-year highs? via Economic Experts Give Predictions for 2013 – NYTimes.com.

Really, Tim Cook.  It’s time to put an end to the trading mania around your stock.  My calculations today that $12.86 billion worth of stock that traded today was 58% of entire dollar volume ($12.86 billion)of the most popular ETF out there, the SPY.  That’s just plain ridiculous and it wasn’t even an unusual volume day for Apple.  Clearly the stock is now getting in the way of innovation,hiring, and retention of employees. Can you think of anything better to do with your mountain of cash than buy back your own stock.  Apple is trading near 8 times earnings when … Read more

The 100 Most Successful Hedge Funds Of 2012Lucas Kawa | Jan. 4, 2013, 8:17 AM |The February 2013 edition of Bloomberg Markets Magazine features its ranking of the top 100 large hedge fundmanagers in the world.Unlike last year when the most successful hedge fundswere a variety of strategies — long/short, macro etc. — this years success stories mostly come from the world of mortgage bonds.This strategy provided an average return of 20.2 percent in 2012, far outpacing the industry average of 1.3 percent.The tiny average return was also far worse than the performance of the S&P 500, which provided a … Read more

  Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse Group AG (CSGN) foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. via Almost All of Wall Street Got 2012 Market Calls Wrong – Bloomberg.

I’m always looking for a reversion to the mean trade but this one is hard to grasp.  They  usually are though.  Who would have thought the best performing sector in the market last year would have been homebuilders? By BRENDAN CONWAY | MORE ARTICLES BY AUTHOR Metals and mining companies, and coal producers, have been in a slump, given economic worries and sluggish commodities prices. But this year and next could see a revival in the industries’ fortunes, and their shares. How to play the comeback via ETFs. The global economy keeps chugging along with signs of a modest, but sustainable, recovery. … Read more

How well did Goldman’s top trades do in 2012? Giles Turner 21 Dec 2012 Every December, the analysts at Goldman Sachs publish their top macro trades for the coming year – an event that attracts much hype among the investment community. But how did the bank’s trades for 2012 pan out? If you slavishly followed Goldman Sachs trade recommendations of 2012, and allocated an equal weighting of your portfolio to each trade, you would have returned 1.6% over the 12 months since November 30, 2011, excluding transaction costs. In comparison, the Barclays Global Macro Index increased just 0.01% over the … Read more

This is a checklist I use to quickly come to a conclusion on a stock.  I score a stock, each line getting a 1, 0, or -1.  A stock  that scored 1 on each line would be a perfect 10. Unlike Bo Derek was,  it may be impossible to score a 10.  For example if a company were to have a low PEG ratio, it might be because the company’s historic growth rate was low and scored a -1 with the analyst community.  All items receive an equal weighting.  Put it another way, I’ve never found a perfect 10. Some of these … Read more

Henry Blodget | Jan. 1, 2013, 11:25 AM | 11,826 | Things You Wont Believe That Are In The Fiscal Cliff Bill That The Senate Passed At 2 AM While Most Americans Were DrunkCongress Has Now Agreed To Raise Taxes On All Americans–Including The Middle ClassDEAR AMERICA: Here Are Your New Tax RatesMost of the attention around the Fiscal Cliff has been focused on income taxes.The way the deal went down, a tiny portion of American taxpayers — households that earn more than $450,000 per year — will see their income taxes rise modestly, from 35% to 39.6%. via Dividend … Read more

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