Insomniac Hedge Fund Guy

Romney Calls For Fed Audit As Party Mulls Platform Plank By Lisa Lerer and Julie Hirschfeld Davis – Aug 20, 2012 4:57 P   .Republican presidential candidate Mitt Romney renewed support for auditing the Federal Reserve, wading into an issue that threatens to spark a fight at his party’s national convention next week.“The Federal Reserve should be accountable,” Romney told thousands of voters at a campaign rally today in Goffstown, New Hampshire. “We should see what they’re doing.” via Romney Calls for Fed Audit as Party Mulls Platform Plank – Bloomberg. I’m worried about a lot of things but none … Read more

Buy Delta Air Lines: Debt And Cost Reductions Are Setting The Stage For A RallyAugust 19, 2012 Airlines are a notoriously difficult business. From fuel costs to the capital intensity needed to run an airline, this industry is certainly a difficult one, unless you are Southwest LUV, which is the only airline to have never filed for bankruptcy. But despite the difficulties of the airline industry, not every company needs to be avoided. One airline in particular has an intense focus on reducing debt and controlling costs, and by doing so, it is setting the stage for a rally in … Read more

We scooped the Heard on the Street guys with their good credit default swap credits with high yield.  Here’s our own list gratis compiled by bright and personable  internet Steve Pery         Swap Prices and Dividend Yields Ticker CDS Price Div. Yield TCP 88.00 7.69% AZN 58.00 6.80% VOD 89.50 5.64% BCE 59.50 5.42% RDS.A 79.50 5.38% PHG 93.50 5.17% T 82.50 5.13% GSK 57.00 5.12% MO 93.00 5.00% CAN 92.00 4.98% TE 90.50 4.95% COP 75.50 4.87% LMT 90.00 4.81% VZ 69.50 4.80% NVS 36.00 4.75% LLY 71.00 4.74% SI 72.50 4.72% STO 86.00 4.66% RCI … Read more

We’ve blogged repeatedly about our view that the investment community has yet to remark stocks based on a 10 year 2% risk free rate of return.  We are now in a period of ultra low interest rates that is likely to persist far longer than conventional wisdom dicates.  The Federal Reserve has a dual mandate of stable prices and full employment.  The state of high unemployment today is far more complex than just the result of an economic recession.  Baby boomers are for the most part not financially ready to retire and will be working far longer than most people … Read more

The ratio of insider buying to selling has dipped to lows not seen since 2007.  Although insider buying is a far more useful indicator than selling, this chart makes me nervous especially after the market has had a good run like it has in 2012.

The Dow Jones Credit Suisse Hedge Fund Index Finished Up 1.42% in July   New York, August 15, 2012 – The Dow Jones Credit Suisse Hedge Fund Index (the “Broad Index”) finished up 1.42% for the month of July. Performance for the Broad Index and its 10 sub-strategies is calculated monthly. July, June and YTD 2012 performance numbers are listed below and are available atwww.hedgeindex.com.   Category Jul 2012 Jun 2012 YTD 12 Dow Jones Credit Suisse Hedge Fund Index 1.42% -0.40% 3.65% Convertible Arbitrage 0.86% 0.33% 4.98% Dedicated Short Bias -0.44% -2.72% -10.52% Emerging Markets 0.96% -0.13% 3.01% Equity Market … Read more

CHART OF THE DAY: Stocks Often Rise When Earnings Are FallingMamta Badkar | Aug. 8, 2012, 10:05 AM | 524 | 1inShare2 EmailMore Investors have recently been pessimistic on the U.S. stock market and pointed to the fact that slowing economic growth is impacting corporate earnings.But BMOs Brian Belski notes that “S&P 500 earnings are not U.S. GDP”.And even when S&P 500 earnings fall, stocks often do well.He draws our attention to this cool chart which looks at stock market performance from 1950 – 2011 to illustrate his point. via This Chart Shows That The S&P 500 Can Do Well … Read more

Something Shocking Is Coming to the McDonalds Menu By Travis Hoium via Something Shocking Is Coming to the McDonalds Menu – DailyFinance. We love Big Mac at these price by the way.  Our analysis shows MCD grossly undervalued with a  2% 10 Yr Treasury.  Load up, it might not be healthy for your waistline but it will for your pocket book.  What I tell people is McDonald’s sell the food people want to buy.  When healthy eating habits is in demand, MCD will be there too. It just  isn’t going to happen too soon.

Macro Funds Show Micro ReturnsArticleComments 1MORE IN MARKETS »smallerLargerBy TOM LAURICELLA and JULIET CHUNGGlobal financial markets continue to be whipsawed by policy makers and economic news, leaving even fund managers who focus on profiting from sweeping macroeconomic trends in a difficult spot.The bad news for investors of all stripes: Few in the markets expect the cloudy outlook to become clearer anytime soon.Fridays better-than-expected July employment report shelved worries about a near-term slide into recession and sparked a relief rally in U.S. stocks. But the report was nowhere near strong enough to change the picture of a stuck-in-the-mud job market. via … Read more

I saw Bob Pisani on CNBC today and he said something very cogent and I thought relevant.  I have outperformed the S&P 500 every year since 2001.  Our Fund is having a decent year but it’s been really difficult keeping up much less beating the benchmark.    It’s no small wonder, most managers are struggling.  Professional managers are in denial.  We’re in a bull market.  Why?  Because interest rates have dropped to levels that make many,many stocks undervalued with the most pessimistic of growth forecasts.   Market Is Having a Very Good Year…Really! Friday, 27 Jul 2012 | 9:40 AM … Read more

The Best Advice From The Most Brilliant Investors In History Max Nisen | Jul. 26, 2012, 12:17 PM | 57,747 | Theres a bewildering amount of advice on how to invest. People divide into camps, schools and strategies, then proselytize on the internet, in books, and on televisions. via The Best Advice From The Worlds Greatest Investors – Business Insider.

“The ongoing European crisis presents the biggest risk to our economy,” Treasury Secretary Timothy Geithner said in congressional testimony Wednesday. “The economic recession in Europe is hurting economic growth around the world, and the ongoing financial stress is causing a general tightening of financial conditions, exacerbating the global slowdown.” This all seems so unnecessary to me. Yes the cradle to grave security blanket of the EU needs some tweaking.  No argument there but the whole euro currency thing is a false construct created without a political or financial union.  The only way out is unconditional guarantee of sovereign debt, one … Read more

Muni Blues Worry InvestorsGrowing Fear That Cities Will Default—Not Out of Necessity but as a StrategyArticleComments 56MORE IN BUSINESS »smallerLargerBy MICHAEL CORKERYSome cash-strapped U.S. cities are walking away from their financial obligations, exposing potential risks in the municipal-bond market.The moves are reminiscent of the strategic defaults seen during the financial crisis when many homeowners, overwhelmed by spiraling debts, mailed house keys to lenders and stopped paying their mortgages—a trend known as “jingle mail.” Now some cities are confronting similar dilemmas, and their choices could have repercussions on workers, taxpayers and bondholders. via For Cities, Default Becomes More Attractive – WSJ.com.

We’ve been saying for some time now how undervalued some NOT all big blue chip stocks are based on ultra-low interest rate assumptions. Investors head for ‘big cap’ America By Michael Mackenzie and Arash Massoudi in New York Euro crisis, Spanish bailout, America’s sputtering recovery and the threat of a hard landing in China. You name it, Wall Street has weathered it. The unexpected twist of the summer is the resilience of the US stock market. After big losses in May and early June, New York’s benchmark S&P 500 index appeared primed for a repeat of last summer’s tumble. A … Read more

This is currently one of the strategies our Fund is deploying.  We actually have a very small position like this in BlackRock so we thought this article might be usefull for our readers.   Striking Price | THURSDAY, JULY 19, 2012 Buy a Dividend Machine at a Discount By STEVEN M. SEARS   Use options to pick up shares of fund-giant BlackRock for less than the market rate. Stop trying to catch the next new thing on Wall Street or searching for mythical 10-bagger stocks popularized by fund legend Peter Lynch almost 25 years ago. These aspirations are unrealistic for … Read more