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Trading Desk Photos – Business Insider.   Yours truly  about 17 down or so. The  one from Park City of course. Not a bad place to have to trade from.

Einhorn Sees Tech Bubble – Business Insider. Hedge fund manager David Einhorn, who runs Greenlight Capital, says that we’re witnessing a tech bubble, CNBC reported citing his fund’s quarterly investor letter. “Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it,” Einhorn wrote in the letter. I couldn’t agree more but it is a very painful short road to stake out. Read more: http://www.businessinsider.com/einhorn-sees-tech-bubble-2014-4#ixzz2zdxnMVfU

The Momentum Stock Meltdown Has Exposed A Big Flaw In A Very Popular Investing Strategy Passive investing, or investing in a benchmark index and letting the money ride, is probably the most time-tested and most prescribed investment strategy in the world.However, the recent sell-off in the momentum stocks might have exposed a flaw in strategies that take passive investing too literally. via The Flaw In Passive Investing – Business Insider.

The relentless cram down of IPOs has come to a screeching halt as 4 of the 8 deals to price Thursday night got postponed.  The insane valuations many Internet stocks traded at and still trade at got taken to the woodshed.  Amazon, Facebook, LinkedIn, Google, Yelp, and many others not as well known ended one of the bloodies tech weeks since 2000.  The selling in those names may have climaxed for now as many could stage some brief but sharp reversals.  Also income tax due April 15th probably had something to do with the poor market action for the bulls. … Read more

http://online.wsj.com/news/articles/SB10001424052702303847804579479841325311678?mg=reno64-wsj

Somewhat counter-intuitively, history shows that buying the market at a lower relative P.E. is likely to be hazardous to your financial health in the short term.  It is important to mention that these results are totally skewed by your time basis.  For example the S&P 500 total returns since January 2001 thru Feb 2014 are cumulative 82.08% yet the returns immediately after 2000 were -11.88% year 2001, -22.11% year 2002.  Similar phenomenon occurred in year 1973 when the DJIA had a P/E ratio of nearly 7x.  That year in 1973 the DJII returned -16.3%, and the following year, 1974, was … Read more

I’m glad to see someone else echoing my view.  Google seems the most vulnerable in my opinion as the only model the company has is an ad model.  At stunning figure seldom mentioned is that the Safari browser (Apple) dominates mobile mind share with something like 40%.  The article fails to even mention Apple as an advertising competitor.  Apple may have been slow get into the ad business, but they are there now and if they get good at it, watch out.  The market share is going to come out of someone’s hide.  Google has the most share so consequently the … Read more

Bright Horizon Family Solutions announced a secondary this afternoon as we expected.  Glad we are short the stock, not happy we are not short more.  After trying to cover small amounts with almost none for sale, the underwriters, aka manipulators decided to slam down 7 million shares. Now I know who has been propping it up while they picked the pockets of the public.   I guess we’ll buy ours back then.  This is just another example of insiders unloading stock at a 52 week high right before their underwriters slam the stock down with a massive secondary.  If you … Read more

Game, Set, Match. I can’t imagine Amazon or Google can be too happy about this. If it comes to pass, two virtual monopolies will band together and become one, unstoppable ,unmoveable force. I just for one hope and pray that Comcast will let Apple do their customer service as well as set top boxes. I still have a lot of doubts about this actually happening as the Comcast X-1 Infinity set top boxes are quite advanced now and I don’t think Comcast needs Apple as much as Apple needs them. You can see why Google is intent on building out … Read more

http://blogs.barrons.com/focusonfunds/2014/03/21/buy-russia-after-the-plunge-a-crazy-idea-that-usually-works/?mod=BOLBlog Controversial, but apparently it works well for the patient investor. I don’t believe Putin will screw the pooch. He acts like a man who knows exactly what he is doing. Then again from what I have read, he may be the richest man in the world with a $75 billion net worth. He owns 5% of Gazprom amongst other holdings.

lPrintBy ALEXANDRA SCAGGS CONNECT REUTERS   Five-years after U.S. stocks hit their financial-crisis low, Goldman Sachs strategist David Kostin says it’s going to be an uphill battle for stocks to move significantly higher this year.Mr. Kostin points to the level of profits, expected earnings growth rates and valuations as measured by price to earnings multiples. “Given the high starting point of all three metrics, it is hard to identify any one of these that will climb significantly during the coming year.”Goldman expects the S&P 500 to finish the year at 1900, roughly 2.4% above where it was Monday morning.Looking back … Read more

What I’ve been saying for some time. The important thing to remember is that not all insiders are bearish. There are still pockets of opportunities. The point being it will be hard to generate returns with passive index funds. As a group insiders are the best market timers out there. They buy low and sell high. http://online.wsj.com/news/articles/SB10001424052702303546204579435570595883600?mod=WSJ_hpp_MIDDLENexttoWhatsNewsFifth&mg=reno64-wsj

People that live and ski here scratch their heads and wonder how Vail will ever recoup the approximate $350 million paid for the Canyons without the real estate. That’s a lot of liability for piazza and lift tickets no matter how much they charge for a slice. Appropriately enough, Vail Resorts Inc. MTN +0.57% s share-price chart resembles a mountain range.The ski-resort operators shares have been an exaggerated version of the S&P 500: They rose by 480% in the four-and-a-half years leading up to the 2007 market peak before shedding three-quarters of their value. They bottomed on the same day … Read more

Interesting read.  Note the SaxAngle has nearly 50% of its portfolio in cash although dare say we know anywhere near as much as legendary Seth Klarman. I’d like to short more but the crap keeps rising. Our rationale is simpler.  We can add a few things that trouble us too.    Insider buying has come to a halt yet selling remains unabated.  It’s hard to find much if anything insider’s are buying  and when you do it doesn’t seem to attract much interest and performs rather dismally. The stuff that insiders are dumping continues to rise.  Contrary to common past arbitrage practice both … Read more

Jim Cramer says the markets turn on Rich Kinder, CEO of Kinder Morgan Energy Partners  KMP_, is a mistake because of his companys performance over the long term.Cramer notes that while many people dislike master limited partnerships, he still believes they are solid income vehicles and Kinder has a way of looking forward. Thus, he rates Kinder Morgan as a “buy.” via Cramer: Kinder Morgan Energy Partners KMP Rich Kinder Is a Bankable CEO – TheStreet.

There is a record amount of stock being bought by corporations while at the very same time the people running those corporations are dumping it.  Per Standard & Poor’s, share repurchases increased to $128.2 billion during Q3 2013, up 8.6% from Q2 and up 23.6% from Q3 of 2012.  At the same time the ratio of sales versus purchases by chief executives, directors and senior officers at S&P 500 companies is more than twice the average ratio of 5.4 over the past 10 years, according to data compiled by Bloomberg and the Washington Service.   What that means is that many … Read more

US Exchanges Current Hot Stocks: Biggest Up Moves Current information as of Tue, Mar 4th, 2014 Hot Stocks lists the most volatile stocks, ranked by highest standard deviation compared to their past 20 days of data. CurrentDailyWeeklyMonthly FlipCharts Filter: US Exchanges Main ViewTechnicalPerformanceCustom View Sym Name Std Dev Last Change Percent High Low Time Links ROSG Rosetta Genomics Ltd +4.39 5.15 +1.08 +26.54% 5.18 4.08 03/04/14     AMC Amc Entertainment Holdings Inc +4.33 23.98 +1.03 +4.49% 24.46 23.08 03/04/14     CRD.B Crawford Co Cl B +4.32 9.95 +1.57 +18.74% 10.05 8.46 03/04/14     PLT Plantronics +4.28 46.39 +1.99 +4.48% 46.61 44.95 … Read more

http://www.businessinsider.com/most-intense-ski-slopes-2013-11

Value investors like to buy at a discount.  They want to buy a stock for less than they perceive it to be worth.  Value investors buy more when the stock goes down. It’s a better deal.  The value trap is an investment in a company that gets cheaper not because of irrational behavior of the investing public but because the business fundamentals are deteriorating.   Or worse yet the investor is being duped by a financial fraud.  That’s tantamount to what Barron’s accused Kinder Morgan of over the weekend.  They accused them of aggressive accounting designed to boost distributable cash … Read more

This is interesting as the bullish cheerleaders for FaceBook have been touting how WhatsApp  has 99.9% uptime and handles more messages than the entire global telecom community combined.    Somehow that justifies the insane price ($19 billion) paid for a company with $20 million in revenues . It seems according to this article, blackouts at WhatsApp are not uncommon.  Then there is the excuse it could  have been overwhelmed by the Facebook acquisition  That’s odd too,one of the main reasons FaceBook gave to investors that this company was adding 1 million accounts per day.  Why then would they be overwhelmed by … Read more

I think Barron’s brings ups an interesting arcane accounting point. There seems to be a lot of flexibility in the way these MLPs classify expenses between operating, maintaining, and future expansion buckets. If KMI is robbing Peter to pay Paul, it makes no sense as the value of their goose that lays the golden egg is in KMP not KMI. Sure KMI on the surface looks like a better deal. KInder gives you different ways to invest. You can invest in the limited partner, ex. a hedge fund or KMP itself or the general partner, the management group which is … Read more

The Barron’s piece has a clever title but that is the last bit that is. The lack of journalism integrity is stunning. While I always want to hear the bear opinion on any investment idea, especially one that I am long in, the bull and bear sides both demand coverage. That’s just good manners for a writer and for an investor it should be required reading. Barron’s cites in their “research” as one of the negatives of Kinder Morgan that less than half of the 19 analysts covering it have a buy on the name. Thompson First call’s service polled … Read more

It’s very frustrating for value investors such as ourselves to watch our largest holding, Apple decline,  almost precisely the absurd amount of money that FaceBook paid for messaging app, Whatsapp.  Whatsapp reportedly had $20 million in revenue and Facebook has paid $16-19 billion depending on how you count it.  I’ve heard all the silly valuation analysis of how Facebook got a good deal at $40 per user, etc when their stock is worth and other social media stocks are trading for much higher valuations per user.  You can’t use one ridiculous valuation to justify another unless you are in a bubble … Read more

Yes, it’s a bold statement but Apple stock is already worth far more than its trading it based on discounted cash flow analysis with very modest projections of near zero revenue growth.  Any product category that Apple pursues that generates new scale and vigor will likely push the stock much higher.  On that note, it’s almost a certainity that Apple is readying the relase of iWatch or some wearbable device on your wrist that will do far more than anything people are expecting. According to this following article from Business Insider, Apple is pioneering a product in the health/fitness category … Read more

Almost all investment ideas related to the growing legalization of marijuana are making money for their investors. I expect this one to do so as well. http://www.businessinsider.com/silicon-valley-vape-marijuana-tobacco-tesla-firefly-2014-2

Interesting chart but Business Insider’s comments show their lack any understanding of Apple’s customer base or the company’s busines strategy. Churn is actually upgrade and there is a wide swath of people that are willing to pay for a product that is well tested and designed, done right from the start out of the gate. As a long time customer of Microsoft, I became frustrated over the years by poor quality of hardware vendors, bugs and software that wasn’t right until the first major upgrade pack and needless GUI changes for the sake of change alone. There must be a … Read more

Small positive – the Fund is now positive for the year. Enjoy your long weekend. Harvey Sax harvey@saxangle.com www.saxangle.com “the insider’s fund”

http://www.cnbc.com/id/101405322 The FXI was up over 3.5% Tuesday. That’s a big move for the equivalent of China’s Dow Jones Industrial Average.

An interesting investment idea but one that has yet to be profitable for us is long dated in the money call option on the FXI.  The large cap China ETF is where it was in 2007 while US markets have nearly doubled.  “The China growth story is going to be the story of the next 30-40 years,” Blankfein said in an interview with Bloomberg Television’s John Dawson from Hong Kong while attending the Goldman Sachs Global Macro conference. “We really need that growth in China to occur.” via Blankfein Says China’s Expansion to Have ‘Huge Consequences’ – Bloomberg.

How much do you pay for liquidity?  This is a question I’ve often asked myself.  I know at our Fund, Sax Angle Partners, we like to tell ourselves and our investors, that our exceptional liquidity (we have no lock-ups just 30 day notice) is worth something.  Now we know what the world’s largest endowment thinks liquidity is worth. How much added return do you need in private equity, in return for tying up your money for five or 10 years?We should be getting an incremental return for that illiquidity—and we call that our illiquidity premium—of at least 300 basis points … Read more