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The Fund has returned 33.02% net of fees over the last twelve months ending June 30, 2017 versus the S&P 500 return of 17.90%. When you beat your benchmark by 84% you should crow about it for a moment as Rabbi Hillel intimates in his famous quote “If I am not for myself who is for me? If I'm just for myself, what am I?, If not now, when?” Please take a moment to check out our new website, insomniachedge.com/. We would love to hear what you think about it. Also be sure to sign up for our blog email … Read more

I have often said the probability of the next crash lies greatest with computer glitches that cause investors to lose confidence in the pricing system, either by design by cyber-terrorists or computer glitches.  This story from FT reinforces this. Multiple Nasdaq-listed stocks, including Amazon, Microsoft and Apple, saw their share price as displayed on multiple platforms drop or rise to exactly $123.47 on Monday.Amazon.com saw its share price drop 87.2 per cent, while shares in Apple fell 14.3 per cent on Nasdaq. But Microsoft’s stock had jumped 79.1 per cent, eBay had jumped 253.5 per cent and Zynga’s share price … Read more

We are making the annual pilgrimage to Denver’s Enercom next week.   Dozens of CEOS and top management from mid to small market oil and gas companies pitch the investment merits of their companies to the buy side.  There is also a lot of commerce between buyers and suppliers of oil and gas services.  This year there are three companies we are particularly interested in hearing from and talking to in the break out sessions.  We have big investments in two of them and just lightened up in a third but are interested in trading back  to a full position.  Timing … Read more

One we have a sizable position is ARRC ARES Capital Corporation, is one of if not the largest of these BDC companies that basically are mezzanine lenders to midtier companies.  It’s a good business today as the larger banks are leaving the lending business in taters due to their Fed regulated Tier 1 Capital ratio obsessions.  Take at look at this good report from JP Morgan on the group.  Note that those companies have to pay out 90% of their earnings in dividend income so you can do the math.  JP doesn’t break out yields which I think is a … Read more

You will hear a lot of explanations of why stocks had their worst week in two years.  The truth of the matter is no one knows.  Sure there are a lot of explanations and perhaps its just the sum of those explanations that adds up to the best explanation. 1. Ukraine crisis.  Obama and the EU have been ratcheting up pressure since the Malaysian airliner was shot down over eastern Ukraine by the separatists.  Obama claims its not a new cold war but Putin shows no signs of backing down. Sanctions now targeting the Russian oil industry.  Counterintuitively the price of … Read more

Sax Angle Partners put up very good numbers for June, up over 5.5% for the month. We did that in spite of finding very few equities corporate insiders were willing to buy.  With the market at all-time highs, it’s natural to reflect on how much is left in this bull-run? Based on the five phases of the business cycle, it looks like there is plenty of gas left.   My read of this chart is that we are probably in the early upswing. Stock prices have more room to the upside. First of all, is the market overvalued? Is it set … Read more

Any number of things could derail the benign climate for equity investing.  This is one of them.  It could happen as early as November elections but I couldn’t handicap when Republicans will gain control.  With the current policy of exclusion, Republicans winning a national election seems as likely as peace in the MidEast but things do change in ways we cannot predict.  Forcing the Fed into raising rates earlier than anticipated would certainly temper animal spirits. House Republicans Resume Efforts to Reduce Fed’s Power By BINYAMIN APPELBAUMJULY 10, 2014 WASHINGTON — House Republicans frustrated by the Federal Reserve’s expansive economic stimulus … Read more

Do you believe in the word typical when it comes to the economy and stock market?  If so you might find this chart interesting.  Where do you think we are in the cycle?  I would have to say we are in the early upswing as policy is far from restrictive.  If that’s the case the market has more room to run.  This year and next could be go and a bear market would coincide well with the pre presidential election year jitters we normally get early 2016.   

A very knowledgeable contact of mine best described as a military atache’ with deep mideast connections,knowledge, and experience says things in Iraq and region are far worse than the public knows.  He expects ISIS to attack Baghdad imminently as soon as this weekend.   We bought options on Brent today and went long the BNO.     Islamic State advancesCompared to other regions of Iraq hit in an offensive launched in June by a well-financed group then called the “Islamic State in Iraq and the Levant” ISIS, but now shortened to simply the “Islamic State,” Baghdad has seen few attacks. … Read more

Last year Charlie Munger took much pleasure at castigating Doug Kass as the selected short seller of Berkshire stock.  The utter disdain Munger and probably Buffett had for short sellers was best summed up by Munger’s comments “We don’t like trading agony for money”.  Becky Quick asked Buffet to elaborate on this. BECKY: I’d like to get your take on them. First of all, on short sellers, he said, ‘We don’t like trading agony for money.’ BUFFETT: The reason he said that is because a stock, when you short it, can theoretically go to infinity. When you buy a stock … Read more

Window dressing is a strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.  Playing the contrarian nature of this can be an interesting way to spice up a listless summer.

GoPro IPO and Google’s Nest & Dropcam Deal Leave Ambarella Sitting Pretty By Rick Munarriz   Ambarella (NASDAQ: AMBA ) seems to be hanging around the cool kids these days. Its two biggest clients — wearable camera leader GoPro and surveillance camera speedster Dropcam — are in the news right now, and Ambarella stands to be the welcome beneficiary in both cases. Over the weekend we learned that Google’s (NASDAQ: GOOG ) (NASDAQ: GOOGL ) recently acquired Nest has hatched a buyout of its own. The company behind the high-tech learning thermostats is confirming the purchase of Dropcam that third … Read more

We have recently purchased several of these dogs as insiders have been barking loudly about the opportunity.  Seriously this is one of the few areas in the market where insiders are buying.  Names we own include PSEC, TCRD,CPTA, ARCC. CPTA, FSC, FULL, KCAP, MCC, NGPC, NMFC, OFS, OXLC, PSEC, SCM, TCRD, TICC by: Fredrik Arnold Disclosure: The author is long FSC, CSCO, GE, CVX, INTC, MCD, MSFT, PFE, T, VZ. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it other than from Seeking Alpha. The author has no business … Read more

We are long TIPS, short TLT.  This is a trade that will need leverage to work well but it isn’t very volatile.  Iraq meltdown is a wildcard though and we have a light position on now. Another firm core CPI report makes the Fed’s job trickier  We have been blogging about this for some time now.  Inflation is inevitable if easy money Fed policy persists.  That’s what they want.  Can they shut it on and off without creating a lot of volatility?  No way. Quoted from JP Morgan Michael Feroli Both the headline and core Consumer Price Index (CPI) came … Read more

Ebay will be well served to move quickly to replace departing PayPal President David Marcus with their recent purchase of Braintree President and Founder, Bill Ready BILL READY CEO , Braintree Bill Ready is the CEO of Braintree, one of the most innovative and influential startups in the payments industry. With its emphasis on mobile-first experiences, elegant tools for developers, and incredible customer support, Braintree developed industry-leading payment solutions that power many of the world’s most disruptive new businesses, including Uber, Airbnb, OpenTable, and Rovio/Angry Birds. Braintree was acquired by eBay for $800 million in 2013. At PayPal, Bill continues … Read more

Value investing is considered riskier than growth investing.  At least that’s what they teach you in modern portfolio theory as taught in business schools today.  Value investor’s want to purchase a stock trading below what they consider its intrinsic value.  Value investors buy more of a security as the price declines if their fundamental valuation thesis remains intact.  They reason it’s on sale and the sale price just got better.  Convinced of their analytic ability, they continue to buy on the way down.   Sometimes this approach is dead wrong and the value investor realizes that his perceived value is … Read more

Everyone in my business is consumed with beating the market.  What if I told you I knew a sure fire way to beat the market?  It’s simple really.  Buy the SPY, the S&P 500 ETF, on margin.  You’ll beat the market.  You will also lose more on the downside of course.  This helps put it into perspective.  We’ve had a one way game since 2009, now running into one of the steepest and longest bull markets in history.  Perhaps we started from a low base after the crash of 2008.  Perhaps we have benefited from zero interest rate policy of … Read more

The PPI number came in hot.  I expect the CPI number tomorrow, Thursday, to come in blazing hot.  I keep looking for asymmetrical ways to express this view.  In other words, limited downside, significant upside.  The utility stocks are my preferred play although there may be a few others including long gold. Producer prices increased 0.6% in April, up from a 0.5% increase in March. The consensus expected producer prices to increase 0.2%.  Ex-Fed Chairman Alan Greenspan said although he doesn’t see an imminent rise in prices, it’s a mistake to believe that inflation isn’t a threat. Greenspan spoke in Washington … Read more

STAG-FLA-TION with a hot PPI and CPI print this week, talking heads will be all over the return of stagflation. Sub-par economic growth and rising input costs across the board will make for interesting headlines soon.  The stock market doesn’t like stagflation. It’s the worst of all worlds although a little pick-up in inflation will be heralded as a good thing at first.

We are positioned for this trade with shorts on the XLU and put option on it as well as puts on the Vanguard Utility ETF, VPU.  Both of which have made nice runs this year and could pull back some on hotter than expected numbers.  It’s a somewhat asymmetrical trade as their doesn’t seem to be huge risk on the downside and some nice alpha on the upside. May 11, 2014 4:50 p.m. ETThe next small steps up in inflation could set off big tremors in financial markets.The two main U.S. inflation gauges, the Labor Departments consumer-price index and the Commerce … Read more

We wrote in our quarterly letter that we expected inflation to rise more than expected.  The CPI and PPI next week should give the new Fed Chairperson, the chance to exhibit her inflation fighting credentials.  Expect some tougher talk of the bond vigilantes and a sharp downward reaction to interest rate sensitive utility stocks.  Our next largest position after our long Apple stakes is a short position on the XLU.    May 4, 2014 7:42 p.m. ETT The improving U.S. jobs market is impaired by stubborn, slow growth in wages, but recent results from companies show the outlook for some workers may be brightening. WSJs … Read more

We mentioned in our quarterly letter than we had picked up small stakes in handful of beaten down biotech stocks that insiders were buying.  One of those was Merrimack, the largest percentage gainer in the market. We have been following Merrimack pharmaceuticals for a few months now. The cluster buying from insiders caught our eye at the end of last year. They have multiple trial drug categories; their most promising is a pancreatic cancer drug in the final trial stage. Results of this trial were to be finalized and released in the 2nd quarter of 2014. Today, with the news … Read more

I believe that you will soon see a noticeable and rather unwelcome uptick in inflation due to the rise in asset prices and the improving employment picture. The Federal Reserve has a dual mandate, to strive for full employment and to keep inflation in check. In order to help the nation recover from the deep recession of 2008, the Fed has used zero interest rates and quantitative easing, QE, as policy tools. Cheap money has driven up asset prices across real estate, the stock market, collectibles and art, and now it’s having an impact on real prices. The Fed has … Read more

When I trained brokers at Paine Webber we used to bring in mutual fund wholesalers to pitch us their latest and greatest funds.  It was an optional meeting and had good attendance.  After all it was a free lunch without leaving the building.  One day out of frustration, I told the wholesaler we wanted to do something different today. “Normally you come in here and tell us about the latest and greatest fund that you have.  We go out and sell  your best fund to our clients and all too often, it turns out to be your worst performing fund. … Read more

  DJ United CEO Back in Market; That’s Been Harbinger — Market Talk 15:48 EDT – United Continental (UAL) CEO Jeff Smisek’s purchase of 20K shares Monday “bodes quite well” for the airline’s stock if his history of buying at bottoms the past several years was repeated this week, says Wolfe Research. The firm, which says the $792K purchase is the 6th-biggest insider purchase of the past quarter-century in the airline space, notes the top 10 by executives logged an average 41% return the next 6 months. For Smisek, his 5 other open-market buys saw his company’s stock outperform the … Read more

Why stocks may be sniffing out inflation.  Is it time to buy gold or gold miners?  We think its a favorable trade.  It wasn’t that long ago that it was gospel to have 5-10% of a conservative portfolio in gold.  The price of gold plunged 28% last year. Now that everyone has been punished for following prudent advice, it might just be the perfect time to reconsider.  Two ideas we have for this is the GLD ETF and the largest gold miner,  Barrick Gold.  ABX is in talks with Newmont Mining to merge the two large miners into the world’s largest gold mining company. … Read more