Insomniac Hedge Fund Guy

Chevron ex-CEO sees U.S. oil imports for next 20 years – Yahoo! Finance

by

PALO ALTO, California #Reuters# – David O’Reilly, the former head of Chevron Corp #CVX#, believes the United States will be importing oil for at least the next two decades despite a recent surge in domestic production from newly developed shale basins. While O’Reilly was upbeat about the potential for supplying enough natural gas and coal for U.S. electricity, he said the country should worry about its transportation system given its reliance on oil – barring a technological breakthrough. via Chevron ex-CEO sees U.S. oil imports for next 20 years – Yahoo! Finance.

”

by

Everyone thinks there will be some kind of stimulus  but I think this is becoming a sideshow to the real fact.  There is a global bank run underway. Stimulus will have no effect on that.  The 1 trillion euro  LTRO operation the ECB  undertook basically gave foreign creditors the liquidity to sell their sovereign bonds to the Spanish, French, Italian banks that were compelled by the their respective governments to buy the debt. The recent $100 billion euro Spanish bank bailout was more of the same and the financial markets saw right thru it. Spanish borrowing costs are higher  today … Read more

‘s 2012 Midyear Roundtable – Barrons.com

by

I read Barron’s roundtable religiously.  It’s the most interesting thing in the whole magazine and comes out twice per year.  Before I read it though, I print out the past recommendations and not just for the past period.  The guru that has been generally more right than wrong is Felix Zulauf.  He says plan for a complete financial global breakdown.  That’s shocking. Betting on the end of the world is generally not a good bet but it only takes being wrong once.   FELIX ZULAUF Is there a good word from Europe? ZULAUF: Adjusted for inflation, Italy trades at levels … Read more

”s Summer not Fall.

by

Everyone is nervous about Europe.  Me too.  I have no way of knowing how much of this is already priced in the market.  You’d have to say a lot based on the violent reaction in the oil patch, some European markets but  I don’t see any positive outcome from this weekend vote in Greece.  If they vote to  keep the austerity demands in place, brief rally and the market will soon say the economy is just going to at best muddle along and at worse, be right back at the  bread line. On the other hand if they abandon austerity, … Read more

Silicon Valley Faces Private Sanity Check – WSJ.com

by

Silicon Valley Faces Private Sanity Check By ROLFE WINKLER A wave of sanity is washing over Silicon Valley after Facebook’s FB +3.00% listing debacle, and that may be bad news for private companies looking to raise money. Suddenly, investors seem to care about business fundamentals again. Instagram surfed the wave perfectly. Despite having no revenue, it sold itself to Facebook for cash and stock currently worth $920 million. But the new focus on fundamentals makes it trickier for hot start-ups like Twitter,LivingSocial and Square to justify the peppy private valuations they have recently received or are seeking. via Silicon Valley Faces … Read more

| ZeroHedge

by

Spain IS Greece After All: Here Are The Main Outstanding Items Following The Spanish Bailout Submitted by Tyler Durden on 06/09/2012 14:52 -0400 Bank Run Bond Bridgewater CDS Creditors European Central Bank Eurozone Germany Greece Gross Domestic Product Ireland Italy National Debt Nationalization Portugal Sovereign Debt After two years of denials, we finally have the right answer: Spain IS Greece. Only much bigger. So now that the European bailout has moved from Greece, Ireland and Portugal on to the big one, Spain, here are the key outstanding questions.   via Spain IS Greece After All: Here Are The Main Outstanding … Read more

Ackman, Loeb, other hedge funds lose in May – CNBC

by

Ackman, Loeb, other hedge funds lose in May Published: Wednesday, 6 Jun 2012 | 6:44 PM ET Text Size   BOSTON/NEW YORK (Reuters) – May’s stock market rout dealt a blow to many on Wall Street including several big hedge fund stars whose bets on prominent U.S. companies looked badly timed. Even William Ackman and Daniel Loeb, two of the $2 trillion industry’s most respected players, failed to escape last month’s sharp sell-off and finished May in the red. Ackman’s Pershing Square Capital Management lost 7 percent, dropping more than the Standard & Poor’s 500 index’s 6 percent decline. Loeb’s … Read more

Form Worst To First – S&| ZeroHedge

by

Form Worst To First – S&P Has Best Day Of 2012 Shortly After Worst Submitted by Tyler Durden on 06/06/2012 16:17 -0400 Ben Bernanke Copper High Yield Investment Grade SPY Three days after posting its biggest single-day loss in seven months, it makes perfect sense in this nonsensical market for the S&P 500 e-mini futures to post their best gain in six months (a 4-sigma drop to a 3-sigma gain). Volume was heavy (and we note came in size at the end). Financials went berserk with MS and BofA ripping around 8% higher along with Energy and Industrials all up … Read more

| Buffett: chance of double dip U.S. recession very low – Rough Cuts

by

No one has a better network than Warren Buffett so he is the economist I pay most attention to. Billionaire investor Warren Buffett, speaking to the Economic Club of Washington, said he believed the chances of a U.S. recession were very low unless the euro zone crisis develops in ways that ”spill over [in the United States] big time.” Buffett, speaking to Carlyle Group CEO David Rubenstein, said he favored a federal budget plan with revenues at 19% of GDP and spending at 21%. (June 6, 2012) via Reuters TV | Buffett: chance of double dip U.S. recession very low … Read more

‘s too expensive to leave

by

I’ve been struggling with a metaphor to describe the state of affairs in Europe.  I’ve got it now.  It’s a bad marriage .  All parties now realize they’d be better off ending it except they can’t afford the divorce.  At some point, my guess is that Germany answers the question, “Why are euro divorces so expensive?  Because they’re worth it.” or do they just learn to live together and make the best of it.  I don’t know the German psyche well enough to answer that one.  Perhaps one of our readers will hazard a guess?

HAL, Halliburton revisit. Stock looks very undervalued

by

After re-doing the valuation on Halliburton and refining the inputs to the DCF model, the stock looks like it has even more potential upside with a new intrinsic value of $63.24, representing a 117% upside from the current price level.  The energy sector has been hit hard lately and looks like it is about to bottom out.  Look for bullish divergence in the near future for a strong buy opportunity.  See our post from April 11 for the rest of the checklist.  saxangle.com/2012/04/hal-halliburton-company-snapshot/  

VOCS, Vocus scores -1 on the checklist. Potential acquisition candidate.

by

                  CHART- know how to read charts. I firmly believe I can improve the price of buying or selling from an understanding of chart action.  Recent Bearish Divergence; -1   ANALYSTS- read analyst reports but come to your own conclusions. 5 strong buys and 5 holds (according to CNBC); 0   INSIDERS- if the people that know the company the best are not buying it, why should you? Lead independent director Kevin Burns has made 3 purchases since May 7 totaling 20,000 shares at a price range of $15.27-$16.15. Chairman and CEO Rudman has made 2 … Read more

Headline risk seems to overload indicators

by

As a trader, I look at charts to try and understand crowd behavior.  The headlines make me want to sell everything and hide under a rock until this euro mess is sorted out once and for all.  When I look at the charts, though, I see a different picture.  The S&P 500, DJI, and Russell 2000 all looked extremely oversold and short term bullish divergence on the shorter term RSI line.  Based on the horrendous price action in May though I suspect that it will take a while for the snap back to materialize.  The Russell 2000 is significantly below … Read more

Soros says Europe has three months to avoid catastrophe

by

I don’t pretend to know what’s going to happen but I’ve said many times, the world would be much better off without the euro.  For reasons beyond my comprehension, the Europeans seem hell bent on keeping it.  Perhaps this speech from George Soros will make it clearer to you. Remarks at the Festival of Economics, Trento Italy June 2nd  

Japan Is Never Going To Default, And The Kyle Bass Trade Will Be A Disaster – Business Insider

by

Kyle Bass’s Most Famous Trade Is A Disaster, And It Is Never Going To Work Out Joe Weisenthal | May 20, 2012, 6:42 AM | 23,775 |   Kyle Bass was one of the handful of hedge funders who made a fortune betting against housing during the subprime bust, and since then hes been stalking his next big “career trade.”For years now, his big target has been Japan, a country with a debt-to-GDP ratio of over 200% and a shrinking/aging population. Hes convinced that its only a matter of time before the country implodes in a massive sovereign debt crisis … Read more

‘t be for a long time if ever

by

  As of 2011, approximately 89 million barrels of oil and liquid fuels were consumed per day worldwide. That works out to nearly 32 billion barrels a year. Where is the bulk of oil demand growth going to come from? In the next five years, almost half of global oil demand growth will come from China according to the IEA, and this trend is set to continue to 2035 as oil demand from the transportation sector is growing strongly in countries such as China and India. In contrast, oil demand among OECD countries is expected to decline over the next … Read more

FOSL, Fossil scores 5 on our checklist

by

CHART- know how to read charts. I firmly believe I can improve the price of buying or selling from an understanding of chart action. Continues to stabilize after recent pullback and could be poised for a jump; +1   ANALYSTS- read analyst reports but come to your own conclusions. 3 Strong buy, 5 buy and 4 hold (according to CNBC); +1   INSIDERS- if the people that know the company the best are not buying it, why should you? CFO, and other key directors purchased a total of 9800 shares at a price range of $72.86-$80.01 during the month of May 2012; +1 … Read more

Spain’s Banking Rescue Should Become Example for Europe – Bloomberg

by

Spain’s Banking Rescue Should Become Example for Europe   Europe’s leaders can’t save their currency union without figuring out a way to salvage the region’s banks. Spain is a perfect place to start.Perhaps no country better illustrates the mutually reinforcing links among the euro area’s banking, sovereign-debt and economic crises than Spain. Its banks are largely paralyzed amid concerns about heavy losses on real estate loans that, by various estimates, could require as much as 120 billion euros $150 billion in fresh capital to offset. Tight bank credit has in turn deepened the country’s economic slump, increasing banks’ potential losses … Read more

RRTS, Roadrunner Transportation Systems socres 7 on the checklist

by

CHART- know how to read charts. I firmly believe I can improve the price of buying or selling from an understanding of chart action. No trends defined.  Looked as though it was poised for a rebound but has been kept down by the market; 0   ANALYSTS- read analyst reports but come to your own conclusions. 4 strong buy, 2 buy, 1 hold (according to CNBC); +1   INSIDERS- if the people that know the company the best are not buying it, why should you? CEO Scott Rued purchased 30,000 shares at 17.41 on February 10, 2012; +1   MANAGEMENT DISCUSSION 10Q AND … Read more

Technical Rally

by

My indicators are showing bullish divergence on all of the major future markets.  We could have a very tradable rally here in spite of the ugly headlines.  As is always the case, how much is being priced in is key to the analysis.  The market now is poised to react violently to the upside with a whiff of good news.    

Venezuela best performing market

by

This interesting table supplied courtesy of the Financial Portal points out some of the folly of trend following and the merits of contrary investing.   When I was a broker at PaineWebber I used to train other stockbrokers. Every week we would have mutual fund wholesalers come in to the office, buy us lunch and show us their funds. One day while we were finishing up lunch and the wholesaler was just getting into his dog and pony show, I interrupted him. I said today we want to hear something different. You come here month after month and tell us … Read more

Facebook IPO Seen Deepening Investor Distrust of Stocks – Bloomberg

by

Facebook IPO Seen Deepening Investor Distrust Of Stocks By Elizabeth Ody and Margaret Collins – May 25, 2012 10:01 PM MT Facebook Inc. (FB)’s initial public offering, plagued by trading errors and a 16 percent drop in the share price, will push more individual investors out of a stock market they already distrust after the financial crisis. “This is clearly the latest in a long string of events that is eviscerating the confidence investors have in the market,” said Andrew Stoltmann, a Chicago attorney who represents retail investors. “The perception is Wall Street jiggered this IPO so the underwriters made … Read more

Is It Time To Switch Gears On The Short Best Buy And Long Amazon Pairs Trade? – Seeking Alpha

by

Is It Time To Switch Gears On The Short Best Buy And Long Amazon Pairs Trade? I’ve been personally considering this trade. There was just a large insider buy of Amazon as well.  Amazon has been a tough stock to short because as long as revenue is rising, investors seem content to give it a pass on earnings. May 27, 2012  | 2 comments  |  includes: AMZN, BBY Pairs trades, going long one company while shorting another, provide outstanding returns for those that can identify trends in an industry or in the broader economy. To say a pairs trade is risky, … Read more

CHART OF THE DAY: The Biggest Driver Of Equity Returns Since 1970 – Business Insider

by

CHART OF THE DAY: The Biggest Driver Of Equity Returns Since 1970 Dylan Grice, Societe Generale’s eloquent investment strategist and author of the Popular Delusions note, just introduced his “Quality Income Index.” His thesis is pretty straightforward: Invest in high quality companies with sustainable dividends. Here’s one of the key charts from his report.  It shows how dividends are the most important component of total equity returns. “The following chart shows that since 1970, dividends and dividend growth have been pretty much the whole story,” wrote Grice. via CHART OF THE DAY: The Biggest Driver Of Equity Returns Since 1970 … Read more

Miserable May bodes well for the future

by

Although the S&P is down nearly 10% from it’s April highs, I’m more optimistic than I’ve been in some time.  Low interest rates really appear to be a long term fixture and not a financially engineered aberration.  The REAL  risk free rate of return is really quite low and based on the DCF model, many, many stocks are undervalued even with diminished growth prospects.  Insiders are beginning to acknowledge this with stepped-up buying.  The lesson from last year and perhaps every year is that you have to buy when despair is high and prices are cheap.  It’s important to do … Read more

LAYN, Layne Christensen Company scores -2 on checklist, look for earnings results Jun. 5

by

CHART- know how to read charts. I firmly believe I can improve the price of buying or selling from an understanding of chart action. Chart is tracking the market; 0   ANALYSTS- read analyst reports but come to your own conclusions. As of April; 1 strong buy, 3 buy, 8 hold, 3 underperform (according to CNBC); -1   INSIDERS- if the people that know the company the best are not buying it, why should you? Shares purchased by both the COO and the President purchased stock with a combined value of almost $2 million at prices of $21.22 and 23.75 respectively; +1   … Read more

Who Lost the Euro? – Businessweek

by

Opening Remarks Who Lost the Euro? By Clive Crook on May 24, 2012 Tweet Facebook LinkedIn Google Plus 19 Comments   The arc of Europe’s postwar history is turning toward tragedy. It isn’t just that much of the Continent has fallen into a new Great Depression, or that in some countries things will get worse before they get better. It isn’t even that the whole mess was avoidable in the first place. It’s that the crisis is dividing Europe along the very lines the European project was intended to erase. Decades of clichés about European “solidarity” and “the European idea” … Read more