Insomniac Hedge Fund Guy

Buckle Up! – Barrons.com

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This cover article from this week’s Barrons.  My only observation is how does one get a job by being this wrong?  Everyone they reviewed failed miserably on their forecast for this year.  Why would they be any better for 2012?  The guy who came closest to being right, Doug Cliggot is not on the panel anymore.  I guess why reward competence.  By the way he is super bearish and in September projected a year end of 1100 S&P 500 for 2011, two weeks left for a big market drop to fulfill this prediction.   Buckle Up! By VITO J. RACANELLI | MORE … Read more

‘| ZeroHedge

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The Mother Of All Chart Porn – Presenting Goldman’s Top 100 Favorite Charts Submitted by Tyler Durden on 12/16/2011 08:51 -0500 Goldman Sachs goldman sachs Christmas comes early for chart porn addicts this year, courtesy of Goldman Sachs which has compiled its top 100 favorite charts together in one place. As Goldman’s Hugo Scott-Gall. says: This is a supplementary chart book to our final Fortnightly Thoughts of the year. In it, we take the best charts that we have published throughout the year and rearrange them to tell the story of the world. Our story is not just of 2011, … Read more

‘t Touch

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Hedge Fund Titan Michael Platt Reveals The Three Things He Won’t Touch U.K. hedge fund manager Michael Platt, the founder of $30 billion fund BlueCrest Capital, discussed the eurozone crisis, European banks and opportunities for investing on Bloomberg Television’s “Inside Track.” via Hedge Fund Titan Michael Platt Reveals The Three Things He Won’t Touch.

JP Morgan Research Top Ideas for 2012

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This is a 156 page report I’ve posted.  I’m not sure if its worth the additional storage I’ll have to pay my network provider.  In other words, it may be completely worthless.  But then again, like I say in my seminars, you should come to your own conclusions after listening to what others have to say.  A few days ago, I posted BAC Merrill Lynch’s research department’s top ideas for 2012.  Before you download this with baited breath, read this blurb from Dec 12, 2011 WSJ Blog. “J.P Morgan permabull Thomas Lee is at it again, issuing a note this … Read more

No hedge fund strategies have positive YTD results

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Dow Jones Credit Suisse Core Index Performance Index / Sub Strategies Value** Nov 11 YTD 1 Year Annl* Std Dev* Sharpe* Dow Jones Credit Suisse Core Hedge Fund Index 92.97 -0.95% -7.03% -4.16% 6.38% 6.78% 0.67 Convertible Arbitrage 91.16 -2.35% -8.84% -8.50% 2.86% 11.51% 0.09 Emerging Markets 97.44 -1.43% -2.56% -0.56% 9.48% 10.84% 0.71 Event Driven 88.32 -0.76% -11.68% -8.96% 4.64% 8.32% 0.34 Fixed Income Arbitrage 99.14 -0.87% -0.86% 0.78% 7.51% 8.74% 0.65 Global Macro 89.57 -1.43% -10.43% -6.41% 5.66% 7.58% 0.50 Long/Short Equity 94.73 -0.94% -5.27% -2.60% 6.55% 8.46% 0.56 Managed Futures 95.31 0.52% -4.69% -0.30% 8.42% 12.33% 0.53 … Read more

Turmoil sparks hunt for high-yield stocks – FT.com

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Turmoil sparks hunt for high-yield stocks By Michael Mackenzie and Dan McCrum in New York Fund managers have had to be nimble this year. A transformed trading environment has tested their investment strategies to breaking point. The S&P 500 index of US stocks may have fallen just 3.6 per cent in 2011, but this modest decline masks a year of sharp price swings against a backdrop of a worsening eurozone debt crisis and banking problems. A slowdown in emerging market economies and fears that the US economy could suffer prolonged stagnation have added to the volatility in equities. via Turmoil … Read more

For Europe, Only Way Out Is to Break Up: Kyle Bass – Yahoo! Finance

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For Europe, Only Way Out Is to Break Up: Kyle Bass CNBC – 47 minutes ago   With no workable solutions in sight and a sovereign debt crisis only likely to get worse, the European Union is likely to see an ultimate breakup, widely followed hedge fund executive Kyle Bass told CNBC. Bass, the managing partner at Hayman Capital Management famous for making huge sums from the collapse of the subprime mortgage industry, said last week’s EU summit produced “a blank piece of paper” on which “there are no details,” causing him to conclude, “It won’t work.” via For Europe, Only Way … Read more

Bernanke Tells Senators Federal Reserve Has No Plan to Aid European Banks – Bloomberg

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Since we know Germany has no plans to allow the ECB to bail out countries, there seems little hope for European banks that own lots of sovereign debts from countries under siege.  So if you can find ways to short European banks, this may be a good trade.   We own puts on Deutsche Bank (DB)and Barclays(BCS)  The weakest ones are the French banks but there are no ADRs to trade.   Federal Reserve Chairman Ben S. Bernanke told Republican senators the Fed plans no additional aid to European banks amid the region’s sovereign debt crisis, according to two lawmakers … Read more

The Week Ahead: Apple-HTC Smartphone Suit Moves Toward Ruling in U.S. – WSJ.com

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Judgment Day Looms for Apple, HTC   By IAN SHERR Apple Inc.’s claims that some smartphones running Google Inc.’s Android software copy its inventions are approaching their first big judgment day in the U.S. The International Trade Commission in Washington on Wednesday is expected to rule on whether some phones made by HTC Corp. violate Apple’s patents. The ruling could lead to a ban on handsets sold by the Taiwanese company, which uses the Android operating system and is the No. 3 smartphone provider in the U.S. market, according to research firm Nielsen. via The Week Ahead: Apple-HTC Smartphone Suit … Read more

‘t As Easy As Advertised – Barrons.com

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No Easy—or Cheap—Remedy for Volatility By BEVERLY GOODMAN | MORE ARTICLES BY AUTHOR Lots of new funds promise to remove uncomfortable price changes from your portfolio, but most are unproven and could be bad for your financial health. The only thing more alarming than this year’s market volatility has been some of the unsolicited advice given to investors who don’t even understand the problem. Several mainstream publications and television pundits have casually —and clearly without the benefit of much research—recommended that investors wary of market volatility try an array of expensive and unproven products. Among them: inversely correlated funds, which aim to … Read more

S&P 500 Dividend Aristocrats

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Dividend paying blue chip stocks have been one of the soundest and least volatile of the equity investments this year. As of this date the S&P 500 Dividend Aristocrats are up 6.4% YTD.  If you add the current yield of 3.27% to that, you get an annualized return of almost 10%.  Very few hedge funds will surpass that this year.   In fact 44% of the total return of the S&P 500 over the last 80 years has been from dividends.  In many cases, the dividends paid by the common stock exceed the yield on the corporate debt of the … Read more

How can you buy below the market? Try selling puts below the current price.

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We’ve added this explanation on put writing from the Options Industry Council.  One of our favorite strategies is naked put selling.  We only do this on securities we would be willing to own.  When we can’t find anything to buy at prices we like ( for example the market has risen to new heights), we may sell puts on stocks we would be willing to buy if they fell back to a level we were comfortable with.  If we get put the stock, we are no worse off than had we bought it at that price.  If we don’t’ get … Read more

Trading the Markets is a Humbling Experience

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Just ask JP Morgan security analyst that put out this bold buy recommendation literally minutes before Texas Instruments warned and stock shed 8.15% after hours.   Hot Research PM | THURSDAY, DECEMBER 8, 2011 Texas Instruments May Boost Q4 Guidance J.P. Morgan says the chip giant will see strength in its OMAP products. Texas Instruments (TXN: NYSE) By J.P. Morgan Securities ($30.67, Dec. 8, 2011) After the close Thursday, Texas Instruments is scheduled to provide an update on business conditions for the fourth quarter. We expect TI (ticker: TXN) to raise the midpoint of its fourth-quarter revenue guidance from $3.4 billion (down … Read more

”s Gain – WSJ.com

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Investor George Soros’s family fund bought about $2 billion of European bonds formerly owned by MF Global Holdings Ltd., the very debt that helped force the securities firm to file for bankruptcy protection Oct. 31, according to people close to the matter. Under the direction of MF Global’s former chief executive, Jon S. Corzine, the firm accumulated $6.3 billion of short-term debt issued by various European nations, mostly from Italy, in a bid to boost trading profits. Over the summer, this debt led to nervousness by investors, regulators and ratings companies, resulting in the firm’s collapse just over a month … Read more

Hedge funds braced for worst year since 2008 – FT.com

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Hedge funds braced for worst year since 2008 By Sam Jones in London and Dan McCrum in New York Hedge funds are set to rack up their second-worst year in two decades after taking a beating from the eurozone crisis and an unexpected slowing in global economic growth. The average hedge fund manager has lost 4.37 per cent in the year to the end of November, according to data just released by Hedge Fund Research – losing money in six of the past seven months. Only in 2008, following the collapse of Lehman Brothers, did the industry fare worse. High … Read more

‘s promotion machine- the more bearish he bets, the more money he raises.

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It’s interesting to note Kyle Bass’s, Hayman Capital Advisors Form 13F filings.  I’ve posted his most recent one from Sept 30, 2011.  .  Now I’ve posted his Sept 30th 2010 return below where he had just a fraction of the money he manages now.  The more bearish Bass gets, the more money he raises. Perhaps he’s more wily than smart.  Hayman Capital Advisors AUM based on these filings has risen almost ten fold.  The most recent 13F filing counts $739.19 million dollars.  A far cry from the $73.4 million in the Sept 30th 2010 filing.  There’s nothing to suggest great … Read more

The Dow Jones Credit Suisse Core Hedge Fund Index was down 0.95% in November as a majority of component strategies declined.

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The Dow Jones Credit Suisse Core Hedge Fund Index Down 0.95% in November   The Dow Jones Credit Suisse Core Hedge Fund Index was down 0.95% in November as a majority of component strategies declined. The Dow Jones Credit Suisse Core Hedge Fund Index provides the benefit of daily published index values which enable investors to track the impact of market events on the hedge fund industry. November, October and year-to-date 2011 performances are listed below and are available at www.hedgeindex.com. Index Nov 11 Oct 11 2011 YTD Dow Jones Credit Suisse Core Hedge Fund Index -0.95% 1.85% -7.03% Convertible Arbitrage … Read more

So, you know what Kyle Bass says, what does he do? Hayman Capital 13 F

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Maybe I just don’t get it but did Bass bet $577 million of the fund’s $739 million in assets on a put position on the SPDR 500 ETF? Please somebody set me straight. He could have some horrific performance the 4th qtr if the market doesn’t collapse in the next three weeks. FORM 13F SUMMARY PAGE Report Summary: Number of Other Included Managers: 0 ——- Form 13F Information Table Entry Total: 12 ——- Form 13F Information Table Value Total: 739,190 (thousands) ——- List of Other Included Managers: Provide a numbered list of the name(s) and Form 13F file number(s) of … Read more

ONLY 23% OF STOCK-FUND MANAGERS were ahead of the S&P this year through Nov. 30, according to Bank of America Merrill Lynch.

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Can’t anybody play this game?  In pro baseball, most hitters will tell you they usually don’t want to know whether a teammate thinks he’s stolen the catcher’s sign for the next pitch. Not only is there a risk that the filched signal is wrong, but the input adds complexity to an already daunting task. Hitters may make an educated guess on what pitch might come, but their main job is to attempt a disciplined reaction, spoiling or avoiding great pitches, and pouncing on mistakes. via Can’t Anybody Play This Game? – Barrons.com.

17.5 trillion in retirement assets searching for returns

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Investment Company Institute: Total US Retirement Assets Rose 5.2% in 4Q:2010 May 06, 2011   According to the Investment Company Institute (ICI), US retirement assets totaled $17.5 trillion as of December 31, 2010, having risen by 5.2% during the fourth quarter. ICI’s analysis encompasses private-sector defined benefit (DB) plans, government pension plans, defined contribution (DC) plans, annuities and individual retirement accounts (IRAs). The ICI estimates that private-sector DB plan assets were steady at $2.2 trillion at the end of the fourth quarter; for DC plans, assets increased from $4.3 trillion to $4.5 trillion. Retirement savings accounted for 37% of all … Read more

DJ UPDATE: US Judge Rejects Apple Request To Ban Samsung Galaxy Sales

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I don’t think this will impact our pairs trade much but it certainly blows apart the thesis.  The bottom line is that Apple’s chart looks more bullish than Google’s this week.  There may be a short reaction Monday but there is still going to be a trial.  I like asymetric trades where if you are right there is potential big upside or in this case downside with Google.  And if you are wrong, there may be no major reaction at all.  Samsung already has 30% market share with its partner, Google and its doing little to hurt Apple as they … Read more

Short euro a very crowded trade

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Perhaps one of the reasons the euro is holding up so well is that there are so many speculators like myself betting against it that it has become the contrarian play.  After all why would anyone want to own a currency that is the daily speculation of whether it will survive? Wouldn’t it be much easier to just sell your euros for dollars.  This is the nature of bear markets.  They are very subject to vicious bear market rallies that test the resolve and conviction of the holder.  In that sense owning put options on the FXE or call options … Read more

Pairs trade idea Long Apple Short Google

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As usual we present the news with an idea for a trade.  I blogged a few days ago about Apple issuing our first buy signal for it in months.  There could be a court case coming up apparently that’s outcome (although I have no idea of how the case will play out but I think its time someone kept people honest and Apple and Jobs is so beloved that I wouldn’t want to bet on Samsung) could be hugely positive for Apple but even more negative for Google.  So here’s a pairs trade idea that just makes sense on a … Read more

| On a long enough timeline the survival rate for everyone drops to zero

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A Snapshot Of Ludicrous Volatility: Since May 1 The S&P Has Travelled 1234 Points Yet Is Unchanged For The YearSubmitted by Tyler Durden on 12/01/2011 – 20:47Bear Market European Central Bank Moving Averages Recession recovery Risk Management VolatilityTo suggest financial markets have been volatile as of late is simply a wild understatement.  Although weve certainly seen this type of volatility in terms of percentage moves over short spaces of time in the past, we cant remember when weve last seen this degree of volatility within the context of whipsaw back and forth movement.  Although it may sound hard to believe, … Read more

‘ Hands – WSJ.com

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Does the Fed face increased risk under the swap lines? Since the Fed isn’t lending to banks directly, the risk is tiny. The ECB is responsible for giving the Fed its dollars back, so the central bank would have to collapse for the Fed to take a loss. The Fed also isn’t exposed to changes in currency rates since the Fed gets back the amount of dollars it loans out. It also earns interest on the loans.   Okay, what’s wrong with this picture?  What if the banks or bank that the ECB loan the dollars out to go bust? … Read more

We are still very defensive

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Although we did not outperform the market today (the only way you could have done that was all in and then some) we managed decent gains.  Surprisingly some of our largest positions did not move much at all.  Hess registered a decent 4.76% gain but Kellogg only went up 1.9% versus the S&P 4.33% gain.  We recently picked up the cereal maker because we figured the way the middle class was shrinking , more and more people would be eating cereal for meals besides breakfast.  All kidding aside, there’s some truth to that. Kellogg sports a 3.56% dividend yield.  That’s … Read more

Central Banks Take Coordinated Action – WSJ.com

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Central Banks Move to Calm Fears Markets Rally After Joint Action Aimed at Cushioning Global Effects of Euro Crisis; Fed ‘Prepared’ to Do More if Needed By JON HILSENRATH And JEFFREY SPARSHOTT Is the move by the Fed, ECB and other central banks to help shore up global economies more substance or more symbolic? WSJ Chief Economics Correspondent Jon Hilsenrath checks in on Mean Street to discuss. (Photo: Getty Images) The world’s major central banks launched a joint action to provide cheap, emergency U.S. dollar loans to banks in Europe and elsewhere, a sign of growing alarm among policy makers … Read more