Insomniac Hedge Fund Guy

We shorted a large amount of S & P ETF

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We shorted a large amount of SPY after hours when we learned of the deteriorating nuclear meltdown problems in Japan.  Unfortunately we didn’t short more.    I’m sorry to say we did this as insurance and really don’t want to make money on this as we are still far more weighted to the long side.  We listened to Robert Kelley on Bloomberg TV who is an intelligent nuclear engineer and he seemed confident that this would be nothing  like Chernobyl. This reassured me but it doesn’t appear to be reassuring the market.  This futures are down 31.7 pts, the largest drop since the Gulf oil spill.  In … Read more

GM and the Japan earthquake disaster present a compelling opportunity

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GM reawakened from the dead and bankrupt went public again at the end of 2010.  It was a heavily subscribed gigantic IPO and the stock did well peaking at around $39 during the first of the year 2011.  It began its descent and recently plunged below 32 on the news of its CFO, Chris Liddell would be leaing the company.  Barron’s reported, ”

Fourteen months after becoming CFO of General Motors (GM), Chris Liddell is leaving the company. He will be replaced on April 1 by Dan Ammann, the company’s senior vice president for finance and treasurer. The company gave no reason for the transition. Shares fell 3.3% in early trading.

Liddell joined GM in January 2010. He had previously been the CFO at Microsoft (MSFT). At GM, he was instrumental in engineering its IPO. He was also praised for strengthening the company’s accounting methods — when it was emerging from bankruptcy, GM acknowledged “material weakness” in some of its statements, but the company’s audit committee said this year that weakness had been fixed, CNNMoney noted.

The company’s statement indicated Ammann had been groomed for this position. Ammann, who is 38, helped Liddell prepare the company’s IPO and has helped set the company’s financial strategy. Prior to joining GM, Ammann was managing director and head of industrials investment banking at Morgan Stanley (MS).

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‘m very curious about this one- Earnings tomorrow

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CEO Brown bought 100,000 shares of this mortage insurer in Nov 2010 at 10.  The media has had lots of play about mortage irregularities and the potential of claims MBI and others might have against the offending banks that created these deficient mortgages.  MBI has also made progress in splitting itself into two businesses, the good one that insures municipal bonds, and the bad one, you know your home, etc. Single family housing has reached levels that don’t support further price destruction as the cost of building is now substantially higher  than the existing housing stock.  On the other hand, the  municipal … Read more

50% in cash now and waiting

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The last couple of days for us have been very frustating.  We were perfectly positioned going into the President’s Day weekend and suffered almost no losses on Tuesday.  I wish we could say we have been that fortunate since.  There has been nonsensical selling.  Alternative energy stocks, such as AMSC go down when oil skyrockets and even natural gas stocks go up?  NLC with 1/3rd of it’s business in the oil sector goes down while oil service stocks go up?   In headline driven markets, technical analysis becomes less useful.  When you lose your compass slow down until you get your bearings.

Oil, Gold, and Market Correction- Should be no surprise to our readers

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Radar Screen Flashing Red Overbought on Multiple=If you will search on our posts, you will see we suggested buying the USO (that’s the most popular ETF tracking crude oil), several of the largest gold miners, and lastly we have repeatedly warned of a toppy market. Now you might say we have been lucky, that the Mideast democracy contagion has worked in our favor

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NLC shows a good setup at 27

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Remember the company that supplied all the dispersant from the Gulf oil spill.  Well Nalco, NLC is an interesting company that has been on a bull run.  It pulled back after this quarter’s earnings.  Insiders must think the future is rosy as two of them stepped up with significant buys.  Take a look at the chart.  Insider buying and bullish RSI divergence in price action suggests this stock is about to turn up.

If you had any doubts how actionable and good these ideas are, look at our last post on Dell and Visa

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We don’t like people gloating but we do like to help people make money.  We wrote about both Dell and Visa as our largest year end positions.  Both have done very well for our investors.  We are mostly out of Visa now but continue to hold Dell.  We will buy Visa back though on any pullback.  Dell is so grossly undervalued as to be ludicrous.

Companies on the Move in Emerging Markets

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This is a great report I found on the web about rising stars in emerging markets.  The Boston Consulting Group did an excellent job as usual in ferreting out this information.   The BCG is a global management consulting firm and according to them the world’s leading adviser on business strategy.  I did work with them while I was CEO at HomeCom and they were first rate. You can find the report here.

If you knew your stock was going down tomorrow would you sell it today?

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Everyday before the market opens, I put a plus sign, minus sign or zero sign in front of every stock symbol I own.  The plus sign signifies that I think the stock goes up today, the minus is down, and the zero sign is I don’t have a clue.  I keep these sheets for several days comparing my predictions to the actual results.  The cost of transactions is so miniscule that if I have a high confidence level that a stock is going down, I have to ask myself can I own this stock cheaper tomorrow.  If so, why do … Read more

One piece of news trumps charts

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Some chartists believe that all known events are already reflected in the price patterns in the chart. They spend a lot of time trying to divine MA crossovers, MACD, Stochastics, Resistance Support lines and many more technical indicators. I too believe strongly in technical analysis but of course equally strongly that one piece of news trumps charts. This chart of Dolby is a a perfect example of this. The company looked like it was poised for a bounce. It was oversold, the RSI was diverging clearly heading in a positive direction while the price action was settling out. Then came … Read more

The technical edge – Gold is making a turn, the counter trend

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Gold is in a downtrend. If you look at the chart you will see the double top with multiple red divergence paints showing before it rolled over. Now it’s flashing divergence in the trend and set for a rebound. The news in Egypt should put a temporary psychological kick in the price too. Longer term the events in Egypt could be remarkably bullish for emerging markets. A friendly Arab democracy would be quite wonderful along the lines of the falling of the Berlin Wall. Who’s going to pick up that tab though? The Chinese?

SODA what a pop!

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This is a repeat of a prior post. I only wish I had listened to my own advice as we made so much money on this trade we didn’t keep enough of a tail. We have a small but exciting position in an Israeli based company, SodaStream International, Inc. You basically buy their product and make your own sodas and carbonated water. It’s a classic razor and razor blade model. They recently targeted the underserved US market and had an IPO in November. The stock nearly doubled from its initial public offering price of 20 but has pulled back recently … Read more

Things look dicey

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We have a very high cash position right now, almost 50%.  Half of the securities we own are municipal bonds we blogged about earlier.  The rest is in Intel, AMSC, ARTC, and a new position, SHLM.  We could be all cash in seconds and net short.  Stay focused you should get  a buying opportunity soon.

Value or Growth?

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Everyone is fixated on finding the next Apple, but look at this stodgy department store, Dillard’s. The stock rose twenty fold in twenty three months.  Too bad I didn’t buy it. It’s been on my screen since $2.75.

True Religion Play

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True Religion Apparel is technically poised for a bounce. Anecdotal checks of inventory show little discounting which leads me to believe that XMAS season went well. The high-end consumer seems to have fared better than the lower-end demographics. Catalyst. The company will be presenting Wed at the Annual ICRX Change conference after the market closes on Wed. Could be a good bounce or more importantly a run-up into the conference in anticipation.

Our largest positions for the New Year – Visa

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Our largest position is Visa which is 16.41%.  This is an out-sized position and we will be reducing it soon one way or the other.  We all know who Visa is and we think it is pretty clear that cash transactions are on the way to becoming extinct and Visa is the prime beneficiary of this secular trend.   The reason though that we own Visa is that it recently dropped in price from 80 to 67- almost 16% in one sad day in December for Visa shareholders when Uncle Ben Bernanke announced that the Fed Reserve was suggesting that the … Read more

MBI hot hot ticket today

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Classic case of massive insider buying, doubting and mounting short position, legal wrangling with huge implications.   We loaded with  call options limiting our losses but taking the full upside for at least a while.  Apparently no one really knows the future earning potential of this company as well as the people running it who see to be wanting to own more stock in it.  Duh.  I’m a buyer and it seems they are able to split the good risk from the bad risks, incredulously. It just seem that if you have lots of money and friends in high places things work … Read more

Soda Sodastream 10 Bagger

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This is truly a disruptive company.  What I mean by that is that this Company, SODA, has the potential to destroy CocaCola and Pepsi’s business model.  I know that is a strong statment and I don’t own a lot of this stock yet but I am a big user of their product and I haven’t brought home a six pack or case of Coke or Pepsi in a month.  Trust me, I know my soda.  This is the best business model (low tech little risk of technological obsolescence, low capital investment) that I have ever seen.  The only risk is … Read more