Insomniac Hedge Fund Guy

11,500 tons of radioactive water dumped into the Pacific…

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If you think that dumping 11,500 tons of radioactive water into the Pacific is nothing to be concerned about, look at the facial expression of the Tecpo official announcing the procedure: http://www.youtube.com/watch?feature=player_embedded&v=-W7uGvW8xvY#at=90 (starting at 27 seconds into video, and continuing to 1:00 minute in). Yes, I believe he’s crying. The footage and English translation are both courtesy of NHK TV’s English language addition.

MCHI: There Are Now 23 China ETFs

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 by Ron Rowland  

BlackRock, Inc. (BLK) yesterday (3/31/11) announced the listing of the iShares MSCI China Index Fund (MCHI).  The press release claims it is the first ETF to be benchmarked to the large cap and mid cap MSCI universe, providing exposure to the top 85% of Chinese equities by market cap.  However, MCHI becomes the twenty-third China ETF, and some of the existing ones provide similar or even broader coverage of the country.

The overview page does not currently contain any information, but according to the month old fact sheet (pdf), the fund is slated to have 141 holdings and an expense ratio of 0.61%.  The largest positions are China Mobile Ltd 8.6%, Industrial and Commercial Bank of China –H 7.1%, China Construction Bank –H 6.4%, CNOOC Ltd 6.1%, and Bank of China Ltd –H 5.0%.

Sector breakdown has Financials at 37.0%, Energy 18.4%, Telecom 11.4%, Industrials 8.0%, Technology 6.4%, Materials 6.1%, Consumer Discretionary 5.4%, Consumer Staples 4.7%, Utilities 1.8%, and Health Care 0.8%.

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Game Changer?…Better Place Opens FIRST Battery Swap Station in Israel

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This week, Better Place, the innovative electric car company, opened up their very first commercial battery swap station. The concept of swapping out depleted batteries for fresh charged ones is what distinguishes Better Place in the burgeoning EV market. You’ll never need to wait to charge your car—you just pull into one of the battery swap stations, robots switch out the batteries, and in three minutes you pull away. It’s really no different than a full service fill-up of 93 octane.

Say goodbye to range anxiety…..Just take a look at this video:

http://www.youtube.com/watch?v=4lp_6VyIeSY&feature

Bronfer explains how it works:

The battery switch process itself is thoroughly unexciting, which must mean great praise for Better Place’s work in developing the concept. The driver only needs to flash his Better Place RFID card at the machine, drive into the rather narrow tunnel and find something to occupy himself with during the upcoming 3 minutes. The car slides into position, slightly lifted – then an underground robot grabs the battery, disappears – and returns with a fresh one. All of this is invisible to the technologically impaired driver, while the geekier amongst us can watch the entire process streamed live on a TV planted outside.

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Chart of the day: Why $4-Per-Gallon Gas Is Damn Cheap

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All of the European data comes from the E.U.’s European Energy Portal website. U.S. and Canadian data come from the respective Automobile Associations. From this recent chart in the Economist, you can see that the bulk of the premium costs in most European nations is due to higher taxes and duties on crude and gasoline. Many nations recognize oil as a finite resource, and are utilizing gasoline taxes to reduce oil imports, create a more efficient transportation system, and better prepare for longer-term oil price volatility.

HSBC Bombshell: Oil Will Run Out in 50 Years

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The senior global economist at the world’s second largest bank warned that the global oil supply might run out in under 50 years. “Energy resources are scarce,” wrote Karen Ward, HSBC’s senior global economist in a research report that was obtained by CNBC. “Even if demand doesn’t increase, there could be as little as 49 years of oil left.” Speaking on CNBC, she raised her estimate by a year.  “We’re confident that there are around 50 years of oil left…There’s possibly more out there, but the confident estimates are around 50 years.” Here’s Ward on CNBC: Peak oil theorists are … Read more

Oil Hysteria: The Resurrection of Peak Oil

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It would be great if I’m wrong but chances are we’ll see prices for crude hit $140 before we see $80 barrels again….After hovering around $103 a barrel for the past week, light, sweet crude had jumped to over $107 a barrel on the Nymex (and Brent over $117 a barrel).  Let’s take a step back and try to understand why this is happening……

The situation in Libya is looking like a shit-show. Pro-Gadhafi forces have pushed back rebel forces, in spite of the coalition-imposed no-fly zone.  Plus the reports of British Ops & the CIA tearing it up in Libya, doesn’t make matters any better.  And let’s not forget about the geopolitical unrest in Syria, Yemen and Bahrain.

The situation in Libya raises a broader, far more concerning set of questions. If it can happen in Libya, why not in Saudi Arabia, where the government is still essentially tribal in nature and will not be winning any prizes for their human rights record anytime soon. Women are still not allowed to drive. Take their 12 million barrels/day off the market, even for a few days, and the geopolitical implications are large, very large (despite the fact that the US imports only 2 million barrels a day from the mid east).Having said that, Canada is now our largest foreign supplier, followed by Mexico and Venezuela (I’ll save my opinions on Chavez for a later date). But oil is a globally traded commodity, and if you prick the supply line in one place we all have to pay. Remove Saudi Arabia from the picture, and the results could be catastrophic, for China first, but for ourselves as well.

While unlikely, if the US keeps demand relatively flat through the use of new alternatives (which there are a great deal of), new conservation efforts and a growing economy, China promises to eat up all of this increase. That my friends, is when the sushi hits the fan. I think oil could easily hit $300/barrel by 2020.

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Charlie Sheen Shorts Berkshire Hathaway. Proves you can still make a killing in the market while wasted.

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The Sax Angle created a hypothetical portfolio for Charlie Sheen.  Our extensive backtesting proves you can still get wasted and make a killing in the stock market.

Charlie Sheen’s stock portfolio produced enormous gains while his career floundered.   That’s the conclusion that the analysts at the SAX  ANGLE came to while building a hypothetical portfolio of Charlie Sheen’s stock holdings.  Based on public information, TV shows, and extensive web gossip, we concluded that Charlie Sheen should own or control significant stock in nine companies, some private and public.

1. Playboy Enterprises– PLA.A

Charlie Sheen should get involved in a group offering a rival bid to Hugh Hefner’s attempt to take Playboy (PLA) Enterprise private.  Once a sought out guest of the Playboy Mansion, Charlie should plan behind the scenes to throw out its namesake owner. Once his buyout group gets control of Playboy, we suggest that Charlie plan to move into the mansion and mummify Hef and display him wax figure like descending the entrance stairs.

2. Laboratory Holdings- LH

Sheen should work with the drug testing giant’s research lab to make drug tests anyone can pass.  Charlies should direct his agent to make a deal for him to be the spokesperson for the new “Easy Pass Come Clean Machine.”

3.  Betty Ford Clinic Buyout

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Chart of the day: Rolling 3-Month Correlation Between Oil & S&P500

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Over the past few years the correlation between oil (especialy WTI Crude Oil) and the S&P500 has been remarkably consistent with an average of about 0.75 (scale from -1 to 1).  However, over the past month that strong correlation that traders had become acustomed to has diminished at an exponential rate.  Over this past month, the rolling 3 month correlation (rolling windows give a much more accurate measure) has fallen to its lowest level since the early 2000s (less than 0.20). Basically, the Energy sector and oil have been moving less in tandem with each other on a day to day basis than they have in years.  Source: Bespoke Investment … Read more

Recently Discovered Video Interview with Seth Klarman

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For those who don’t know Seth Klarman, here’s some brief info from Jacob Wolinsky at Valuewalk:

Seth Klarman is undoubately one of the greatest investors of our time. Klarman manages Baupost Group, the 11th largest Hedge Fund in the US, with over $20 billion in assets.  There is a rumor that Buffett, (a big fan of Klarman) keeps a copy of Klarman’s out of print and super expensive book Margin of Safety, by his bed. Seth Klarman’s Baupost fund has produced returns of approximately 20% annually since inception in 1983. Klarman has produced phenomenal returns despite the fact that he usually holds huge amounts of cash.

According to a lecture given by Bruce Greenwald: Warren Buffett says that when he retires, there are three people he would like to manage his money. First is Seth Klarman of the Baupost Group, who you will hear from later in the course. Next is Greg Alexander. Third is Li Lu.

Below are the videos (6 in total), enjoy:

[youtube=http://www.youtube.com/watch?v=u0aRiDI1wnk&feature=related&w=400&h=300]

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XOIL Tries to Be Spot-On Spot

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  Global X launched a new equity ETF on Tuesday (3/15/11) that attempts to achieve high correlation to crude oil spot prices. Global X Oil Equities ETF (XOIL) provides exposure to pure-play oil companies with significant oil reserves that are typically not involved in other industries such as natural gas or downstream operations.

The underlying Solactive Global Oil Equities Index tracks the performance of 25 equal-weighted companies that have shown a high correlation to the spot price of oil. Constituents are ranked and chosen by their correlation to the spot price of oil in the quarter preceding the selection day. The index has a global mandate, but only North American stocks passed the most recent correlation screen with 80% currently allocated to the U.S. and 20% to Canada.

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Weekend Reading Links

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The weekend is always a great time to catch up on some of the week’s reading you missed… Markets have gotten conditioned to central bankers flooding the market with money every time something goes wrong. [The Psy-Fi Blog] A profile of Jonathan Ive the “design genius” behind the rise of Apple. [I Heart Wall Street] Market bubbles and investor psychology.  [Vanguard Group] Buffett’s worst investment ever (and its not what you think) and7 other unusual things I learned about Warren Buffett. [The Altucher Confidential] Why are some cities happier than others?  [The Atlantic] Sirius is Clearning up its balance sheet. [Sirius Buzz] The frequency … Read more

Best Hedge Against Rising Oil Prices: Part 1

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by: Dr. Osman Gulseven After the UN resolution on no-fly zone in Libya, the coalition forces just launched an almost full-scale operation on Libya. I was watching Euronews to get latest updates on the Libyan crises. Obviously, this is not a single operation that will last for a couple of days. Libya is on fire! We might see a full-scale war in Libya that will last for weeks or months or even years. After learning a smart lesson in Iraq, France is trying to lead the coalition forces with 20 aircraft and a number of warships. Gaddafi’s spokesman said that … Read more

‘s Focus Growth Fund: A Brief Analysis

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by: Dr. Osman Gulseven In a recent article, I discussed the top holdings in Morgan Stanley’s portfolio. According the latest 13F filings, Morgan Stanley’s (MS) year-to-date performance was mediocre and below the S&P 500 (SPY) return. The investment banks mutual funds have been lagging behind the market since the last decade. The mediocre performance of investment banks portfolio shows that they take hard-earned money and invest in under-performing assets. They also charge management fees and hidden costs such as front-end/back-end loads, plus commissions you never heard of. Some companies charge up to 3% in management expenses. I was checking which funds … Read more

Insider Buying: 7 Stocks With CEO Buys of at Least $100,000 in the Past Week

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by: Steven Kiel Each week I highlight large insider purchases made by the CEO. These purchases must not be option grants or exercises. I prefer to track insider buying at the CEO and CFO level, rather than at the Board level, because management should have a better idea of what’s going on in the day-to-day operation of the company. An insider buys company shares because they have confidence in the company and the stock, and occasionally these purchases foreshadow a coming catalyst. At the same time, these insiders are humans and can get caught up in the market and may … Read more

Get Ready for ETF Changes: QQQQ Becomes QQQ Again

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by: Ron Rowland

PowerShares is changing the ticker symbols for 10 of its ETFs starting with tomorrow’s (3/23/2011) opening of trading. Included in the changes are the PowerShares QQQQ Trust along with the nine small cap sector ETFs that were the subject of a lawsuit filed by the Select Sector SPDR Trust.

I never understood why PowerShares changed the ticker symbol on the Nasdaq 100 ETF from QQQ to QQQQ while simultaneously making QQQ part of its name back in 2004. Perhaps it had something to do with it becoming a Nasdaq listing when the Nasdaq wasn’t allowed to have three letter ticker symbols. Anyway, apparently enough time has passed (or the letter count restrictions were relaxed enough) to allow it to revert to the former ticker – the one with just three letters that matches its name.

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George Soros: China will be the NEW world currency

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[youtube=http://www.youtube.com/watch?v=JJVZ8sf6uBI&feature=player_embedded&w=450&h=350] The US Dollar has been the king of currencies for some time now. According to Soros, there was a flight from all currencies, which is why the price of commodities, especially gold and oil, were generally rising. He also stated that an orderly decline of the dollar was desirable and that the entire system needed to be reconstituted towards a global currency. When commodities, notably oil, is bought and sold in the futures markets it is done in U.S. Dollar denominations. This is why we see such a strong negative correlation between the price of crude oil and the … Read more

What to Buy in Rebuilding Japan

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   Japan has been hit by a triple calamity – monster quake, killer tsunamis’ and nuclear disaster– that only a Hollywood disaster film director could imagine. The damages wrought by this catastrophe in terms of human life and suffering as well as economic damage will be remembered as one of the worst in history. From our standpoint on the ground in Tokyo, it was (and is) hard to be an objective observer given the ongoing Fukushima nuclear crisis, daily earthquake aftershocks, checking radiation levels, gas lines and empty shelves in neighborhood convenience stores and supermarkets. But Japanfs stock and financial markets, being the amoral animals they are, have largely or completely discounted the worst in losing 12.6% or 1,305 points on the Nikkei 225 from a mid-session high on Friday March 11, 2011 to a mid-session low on Friday March 18, 2011; the caveat being that the Fukushima nuclear crisis does not deteriorate into a level 7 Chernobyl-like nuclear disaster.

  • Historically, monster quakes (in 1855, 1923 and 1995) have marked or

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Some insiders step up. You should too.

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We have written a couple of times about our morbid pre-occupation with DELL Computer.  While the world has been hiding under its desk and hunkering down under the twin spectres of nuclear meltdown and democracy contagion in the oil patch, Michael Dell has been buying $150 million more of his stock.  And it’s not like he needs anymore of it to diversify.  According to our friends at the Washington Service, he now owns 273.39 million shares.  So what does Michael see that Wall Street is missing.    While the world, me included, awaits every tidbit of news and product announcement from Apple … Read more