Insomniac Hedge Fund Guy

Sallie Mae: Fees the Unemployed, Then Deletes Backlash on Facebook

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Nominal fees targeted at the demographics who will feel them most simply don’t work.  Bank of America thoroughly illustrated this concept with the short-lived monthly fee on their debit cards, resulting in a plethora of negative press and a number of former clients transferring assets to credit unions.  So why did Sallie Mae think applying a $50 fee to unemployed borrowers would work any differently?  Following BAC’s footsteps and a 100,000 name strong petition, Sallie Mae restructured the fee and now applies the money toward repayment of the loan.  Damage being done however, several people chose to speak out on … Read more

| UTAH SECURITIES FRAUD

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Thinking of investing in a hedge fund? Here are some tips for sniffing out potential fraud. Posted on March 15, 2011 by Mark Pugsley This is the text of a terrific article that appeared in the Wall Street Journal yesterday about how to sniff out potential fraud in a hedge fund: Danger! Danger! Thinking of investing in a hedge fund? Here are some tips for sniffing out potential fraud. By ROB CURRAN In the age of Madoff, small investors are rightfully leery of hedge funds with eye-popping returns and a low profile. But how do you size up the risk of fraud? via … Read more

With Iran Offline, Oil Could Jump 30%

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Despite our massive emergency oil reserves (see here), the IMF estimates a halt in Iran crude could produce a rather dramatic effect in the price of oil: “If Iran halts exports to countries without offsets from other sources it would likely trigger an “initial” oil price jump of 20 to 30 percent, or about $20 to $30 a barrel, the IMF said in its first public comment on a possible Iranian oil supply disruption.” “Financial sanctions against Tehran may be ‘tantamount to an oil embargo’ and would imply supply declines of about 1.5 million barrels per day from the world’s … Read more

Pension Pulse: Hidden Burden of Ultra-Low Interest Rates?

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Guest Post By: Leo Kolivakis via Pension Pulse: Hidden Burden of Ultra-Low Interest Rates?.   Matthew Philips and Dakin Campbell of Bloomberg report, Banks Join Pensions in Squeeze as Federal Reserve’s Low Rates Erode Profit:   The Federal Reserve, which cut its target for the federal funds rate to a zero-to-0.25 percent range on Dec. 16, 2008, said last month that rates would remain “exceptionally low” at least through late 2014. While the unprecedented period of near-zero rates is meant to aid an ailing economy, it poses challenges for banks, insurers, pension funds, and savers. The hope is that by making mortgages and … Read more

Dominion Resources- primed to dominate

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Dominion Resources, Inc., together with its subsidiaries, engages in producing and transporting energy in the United States. It operates in three segments: DVP, Dominion Generation, and Dominion Energy. The DVP segment includes regulated electric transmission and distribution operations that serve residential, commercial, industrial, and governmental customers in Virginia and North Carolina. There are a few reasons why Dominion is set to dominate.     Dominion Resources, (D) operates in the all important corridor of power, the Washingon DC Virginia suburbs where unemployment and recession are largely absent  because of the growth of Government.  Besides what better recession resistant business is there than … Read more

Fresh Off an Insider Trading Charge, Did Einhorn Sandbag Green Mountain?

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Up 21% after hours yesterday and finishing today almost 24% from yesterday’s close, it certainly seems that Green Mountain Coffee Rosters isn’t the dark and gloomy picture that David Einhorn painted in his 110 slide presentation released on October 17th of last year (presentation here).  To his credit, he makes some strong points as to GMCRs difficulties with free cash flow.  However, with several important patents on the K-cup design expiring this year, the company is defensively spending money to acquire competitors and protect the market share.  This is in conjunction with large scale research and design efforts to roll … Read more

WATCH: Facebook’s $200 Million Graffiti Artist

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WATCH: Facebook’s $200 Million Graffiti Artist Posted by Jackie Cohen on February 2nd, 2012 12:58 PM David Choe, the graffiti artist who covered Facebook’s walls took compensation in the form of stock currently worth $200 million, and the value of it is getting him a lot of ink. Videos of Choe are also getting more views than ever, especially footage showing the artist incorporating a pair of stick figures that the Mark Zuckerberg put up on one of the walls at the Menlo Park headquarters. We’ve embedded three clips of Choe’s work at Facebook below. Let us know what you … Read more

Thinking About Retirement? Forget 401Ks, Graffiti Pays… A Lot.

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Ok, so maybe picking up a can of spray paint isn’t the best retirement option for everyone, but it certainly worked out for David Choe.  Back in 2005 and under the direction of Napster kingpin Sean Parker, he adorned the walls of the Palo Alto with his street styled tagwork (the rest of his mixed medium works can be seen here).  Upon completion, Parker asked if he would like to be compensated in cash or in an equal value of stock.  While Choe is no beacon of the mainstream social environment, he took a gamble and accepted the offer of … Read more

12 Rules Stockpickers Live By

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The Magellan Fund has never been as strong and consistent a performer after Peter Lynch left the helm.  There are many postulates as to why this is the case.  I am going to introduce a new one.  Few believe Berkshire will be the same after Buffett.  In fact those trying to imitate Buffett’s style now have paled in comparison.  I believe that just like the two investors shared some things in common, one thing they shared that the market has failed to appreciate is that both investors constantly changed, they evolved and their styles of investing encompassed many and broad … Read more

‘s Kung Fu Grip, One Finger at a Time..

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Remember when China, producer of 95% of all the world’s rare earths, sent shockwaves through the rare earth markets by announcing a 40% reduction in rare earth production (seen here), and further stoked the fire by “mysteriously halting” all exports of the commodity (seen here) in a retaliatory effort against Japan?  While China’s grasp strengthens while Western economies flail, Malaysia sees opportunity in offering some relief from restrictions by the erratic and opaque Chinese government.  According to the NYTimes, regulators have granted an initial operating license to an immense refinery specializing in rare earth production.  Although this is just the first of … Read more

| The White House

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From: The White House “In his State of the Union address, President Obama laid out a Blueprint for an America Built to Last, calling for action to help responsible borrowers and support a housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference, including allowing these homeowners to save thousands of dollars by refinancing at today’s low interest rates. That’s why the President … Read more

Kass: 10 Reasons to Rally – TheStreet

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Kass: 10 Reasons to Rally By Doug Kass 01/10/12 – 02:20 PM ESTAdd Comment This commentary originally appeared Jan. 10 at 8:45 a.m. EST on Real Money Pro — for access to all of legendary hedge fund manager Doug Kass’ strategies and commentary, click here.   NEW YORK (RealMoneyPro) — I have rarely been accused of being an economic/stock market cheerleader, but I believe the U.S. stock market will surprise to the upside in the near term for the following fundamental, technical and sentiment reasons: via Kass: 10 Reasons to Rally – TheStreet.   I’m not one to mimic others … Read more

Facebook Under Fire as it Approaches IPO

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I’m sick of Facebook.  The name makes me cringe every time the talking heads on CNBC spout out the same regurgitated facts; all too reminiscent of Armani  clad penguins feeding vast fields of their young.  Regardless, here’s some news that might  get a smile out of your spiteful inner self: lawsuits against the social media giant are rapidly piling up as we near the initial public offering.  No, the company didn’t decided to go on one last rampant crime spree just before going public.  It’s the scent of money in the air that drives the shoals of patent lawyers into … Read more

What Does a Third Carrier Battle Group in the Gulf Mean?

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Having already recently warned the US (Jan 3), Iran is certainly not going to appreciate the addition of a third Carrier Battle Group around the Strait of Hormuz which was announced yesterday on Navaltoday.com. Generally a Battle Group makes for a bit of a procession.  Although it varies depending on the mission, the structure of a Group generally consists of: the aircraft carrier itself, two offensive guided-missle cruisers to engage land targets, two destroyers for defensive maneuvers against submarines and aircraft, a frigate to protect from submarine attacks, two submarines also for defensive purposes, and a supply ship to provide support … Read more

Use Google? YouTube? Have a Gmail account? Worried? Maybe You Should Be: Part 2

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OK, the previous post on this topic generated a LOT of emails.  With excessive use of the caps lock.  All the shouting aside, the responses formed two very distinct camps: those who welcomed the changes with open arms, and those angered to the point that their accounts will be deactivated within the next month.  This apartheid is primarily due to difference in perspective rather than an actual misrepresentation of facts.  Let’s break down the two mindsets so we can understand both sides of the equation. Now it is clear that purely from a functionality standpoint (ignore the politics for just a moment), the … Read more

‘t Lose It!

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Just Dont Lose It!By KOPIN TAN | MORE ARTICLES BY AUTHORMore than ever, investors want advisors and money managers to preserve their capital. So how can you make your wealth grow?ArticleComments 4EmailPrintReprints smallerLargerWhen stocks recently hit a six-month high, U.S. Trusts chief investment officer, Christopher Hyzy, expected to hear from investors eager to buy more shares. Instead, calls came in from clients who wanted to know if they should take profits, or how they could protect their winnings following the Standard & Poors 500s quick 20% jump to break through 1300. via Investors Just Want Their Principal Back – Barrons.com.

Differentiating Between An Irrational Market Or Strong Bull Market Trend?

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Guest post by: Kirk Differentiating Between An Irrational Market Or Strong Bull Market Trend? These past two weeks have been tough as an options trader. Differentiating between trading an a possibly irrational market or bull market trend is sometimes very difficult to assess. We all know that the stock market can push us to extremes and then, just when we “give up” and “give in” the turn happens. Timing is really everything. Blow-off Top or Pull-Back? Most traders I talk to are in one of two schools of thought right now. Either you think this is the best shorting opportunity for the … Read more

Like Herding Cats? Try Trading Oil

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Today’s rampant fluctuation in oil was a perfect example of how much political and headline risk from Iran surround the markets.  While nothing fundamental has changed from our initial assessment of the Iran situation seen here, all it took was Iran reiterating they are pissed and the IEA emphasizing to the EU that reserves exist for a reason. NEW YORK—Iran’s threat to immediately halt oil sales to the European Union pushed prices above $101 a barrel, but crude retreated after the International Energy Agency later said it could release strategic inventories if a supply emergency occurred.  Light, sweet crude oil for … Read more

Use Google? YouTube? Have a Gmail account? Worried? Maybe You Should Be: Part 1

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I admit, I constantly use all three in almost every aspect of my life.  But it looks like my Hotmail account, Yahoo Finance, and Vimeo are about to see a lot more of my traffic, and here’s why.  I received an email from Google just earlier today about their ‘new privacy policy’.  It seemed harmless enough, even like a step in the right direction of reducing these longwinded legal documents into something the average user can understand: We’re getting rid of over 60 different privacy policies across Google and replacing them with one that’s a lot shorter and easier to … Read more

The Roof Has Been Raised: $16.4 Trillion Debt Ceiling

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Well, it’s looking like  the Senate was unable to muster enough votes to reject the newest debt ceiling hike in a 52 to 44 vote.  Due to take effect this Friday, we will be looking at a new ceiling of $16.4 trillion with our current levels reaching the $15.4 trillion mark. From Zerohedge: “Since roughly $100 billion was plundered from Pension Funds in the past month, The US will have about $15.4 trillion in debt with the Monday DTS. The question then is how long will the $1 trillion in debt capacity last: at $125 billion/month it won’t be enough … Read more

Some interesting numbers on Netflix

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As the subscription based online movie provider soars as high as 15% in after hours trading on a decidedly positive earnings report, some investors are left scratching their heads.  While the company has shown an impressive rebound of 38% since touching on it’s 52 week low of 64.54 a share, the upward correction seems to lack a real catalyst.  In their trademark no-nonsense style, Zerohedge took a closer look at the hard data (spreadsheet can be downloaded here ) and found some interesting points.. Netflix generated $33.9MM in “Free Cash Flow”. Of this $25.6MM was from change in Net Working Capital; this compares … Read more

‘s not hard, just follow the Dividend..

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For those of you long AAPL yesterday, the paltry 6% or so gain on the most impressive numbers that we’ve seen to date from the tech giant were a bit depressing.  The fact that every single metric that analysts provided estimates on was completely blown out of the water combined with the $7 drop in share price before the announcement only reinforces the fact that both analysts and the street had no idea how profoundly astounding Apple’s results would be.  So why doesn’t the market seem to reflect similar sentiment?  One word: Dividends.  With over $17 trillion in qualified retirement … Read more

Iran, Nuclear Policy, and America: An Investment Opportunity In Disaster?

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  We have a delicate balancing act at hand between the threat of an emerging nuclear power, our rapacious thirst for oil, and responsible diplomatic policy.  The consternation in the air is palpable, bringing to mind Buffet’s famous words “Be fearful when others are greedy and greedy when others are fearful”.  So how does one put such words of wisdom into an actionable trade idea?  Since going long nuclear fallout seems short sighted, let’s look at how to take advantage of a potential event driven jump in the price of oil once we fully grasp the situation at hand. At … Read more

Is Natural Gas a Buy?

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Since mid 2008 natural gas has been completely decimated by the market with the past eight months have been particularly bearish, cutting natural gas stocks in half.  Take a look at UNG for instance, down close to 60% from it’s June high of 12.32 a share.  So with natural gas bouncing off it’s all time low is it time to take a bullish stance on the commodity?  Recent options activity has spiked dramatically, with a call to put ratio of more than six to one.  With options activity a good forward looking indicator of investor sentiment, this is generally a very bullish … Read more

‘s got it right CNN or WSJ?

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There are major implications for short-term trading here.  Natural gas E&P companies were the biggest gainers today while the drillers like BAS were some of the biggest losers on the idea that natural gas prices are bottoming since Chesapeake Energy announced major curbs on drilling due to collapsing natural gas prices.  If Obama sounds sympathetic to nat gas and promotes it in any kind of meaningful way, BAS and others could rocket. State of the Union to offer a blueprint for the economy By Jessica Yellin, CNN Chief White House Correspondentupdated 5:29 PM EST, Mon January 23, 2012 A source … Read more

More than a coffee shop? Starbucks to offer beer, wine in select locations

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In the search for increasing profits a number of fast food restaurants venturing away from their tried and true business models and testing the uncharted waters of breakfast; Subway, Wendy’s Co. and YUM brand’s Taco Bell are just a few.  In a similar venture at a select few locations, Starbucks is looking to add alcoholic beverages and a larger menu to match which would include light, appetizer style fare.  If successful, the coffee chain could be looking at a large increase in sales with little additional overhead costs.  Considering the frequency locations are used to conduct business, the addition of … Read more

The Ban on Iran: Tehran continues with threats

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As promised, the European Union followed through with their promise to ban all oil imports from Iran today in an effort to halt the country’s nuclear development program.  The halt on oil was accompanied by a number of other provisions including sanctions on trading with their central bank.  Just days after the US, French, and British militaries sent a flotilla of warships through the gulf, the combined effect of the ban and military actions are sure to add pressure to our already tense relationship with Iran who reiterated their threat of a closure of the Strait of Hormuz.  Markets responded … Read more