:)
ACI up 8% AUY up 8%, ferts up good, dollar weak!!
I did say so!!! :)
Feels so good to be right!!!
Friday, September 12, 2008
Wednesday, September 10, 2008
H2G2.. thats what I am!!!
Took a book quiz and the book that closely reflects my personality is H2G2.. Incidentally, it happens to be one of my all time favourites!!! Amazingly holarious, though the movie sucks!!
Reminds me.. I took my "About Me" description (Mostly Harmless), in my orkut profile from H2G2..
You're The Hitchhiker's Guide to the Galaxy!
by Douglas Adams
Considered by many to be one of the funniest people around, you are
quite an entertainer. You've also traveled to the far reaches of what you deem possible,
often confused and unsure of yourself. Life continues to jostle you around like a marble,
but it's shown you so much of the world that you don't care. Wacky adventures continue to
lie ahead. Your favorite number is 42.
Take the Book Quiz
at the Blue Pyramid.
Well well well,.. a good day for commodities.. finally.. !!!
Digressing.. investors or analysts tend to associate the reason to the event.. not the event to a reason.. They ( I am not an exception) tend to have a firm opinion on their opinion about the market and stick with it.. Since, the irrational behaviour in the market lasts longer than you are solvent, they market does not behave any remotely close to what they expect it to behave. Yet they stick to their convictions.. If market continues to go the other way, they kind of give up,, but this phase comes after they got totally obliterated (like I am now).. But what goes one way should go the other way too.. so eventually the market tracks the path the anaylst has predicted,, and well, thats when the analyst boasts "I said so!" .. . :)
Anyways, I spoke with an analyst who recently has been to a gold conference in Denver.. Interesting insights into whats happening in the markets.. From what I understand his explanation, most of US debt is held by central banks of other countries and the soveriegn wealth funds. Russia hold about 100bn of FNM and FRE debt, China a lot more and trillions of treasuries. Sinking credit markets in US has a nagative impact on the dollar and on the debt, logically so, the nations wealth ihas been eroding as fast as the dollar was sinking. When FNM and FRE were on the verge of collapse (technically they were not, as they were 'well capitalized - more than what is required by the mandate'), Treasury had to come in and bail them out. Well, this in a way is a lifesaver for the economy. and it was not in Fed's or tresury's interest to get on the bad books of other central banks.. From a different vantage point, Treasury and Fed's intention was to reverse the trade sentiment - short financials, long commodities, and by bailing out over a weekend, they infact did it. Commodities trade round the clock where as financial stocks only when the markets are open. Hedge funds who were short financials had to face margin calls on a monday morning, and had to sell the commodities.. Though financials were trading at prices not supported by fundamentals, funds could not short them as the naked short rule was put in place right on time. Add redemptions and liquidations to the equation. and the Soveriegn Wealth funds selling gold to support dollar (this is what text book does not teach - SWFs selling gold to bolster dollar.. the money they were making on the strong dollar was more than the money they were losing selling gold).. This in short explains what is happeneing in the markets, to the commodities, to gold..
When will all this come to an end?? when the selling comes to an end.. and I am not good at picking up the time correct.. It is wise, thus, to own options in commodities .. I happily own options of gold, Jan 09 exp.. 10 strike.!!! :)
Digressing.. investors or analysts tend to associate the reason to the event.. not the event to a reason.. They ( I am not an exception) tend to have a firm opinion on their opinion about the market and stick with it.. Since, the irrational behaviour in the market lasts longer than you are solvent, they market does not behave any remotely close to what they expect it to behave. Yet they stick to their convictions.. If market continues to go the other way, they kind of give up,, but this phase comes after they got totally obliterated (like I am now).. But what goes one way should go the other way too.. so eventually the market tracks the path the anaylst has predicted,, and well, thats when the analyst boasts "I said so!" .. . :)
Anyways, I spoke with an analyst who recently has been to a gold conference in Denver.. Interesting insights into whats happening in the markets.. From what I understand his explanation, most of US debt is held by central banks of other countries and the soveriegn wealth funds. Russia hold about 100bn of FNM and FRE debt, China a lot more and trillions of treasuries. Sinking credit markets in US has a nagative impact on the dollar and on the debt, logically so, the nations wealth ihas been eroding as fast as the dollar was sinking. When FNM and FRE were on the verge of collapse (technically they were not, as they were 'well capitalized - more than what is required by the mandate'), Treasury had to come in and bail them out. Well, this in a way is a lifesaver for the economy. and it was not in Fed's or tresury's interest to get on the bad books of other central banks.. From a different vantage point, Treasury and Fed's intention was to reverse the trade sentiment - short financials, long commodities, and by bailing out over a weekend, they infact did it. Commodities trade round the clock where as financial stocks only when the markets are open. Hedge funds who were short financials had to face margin calls on a monday morning, and had to sell the commodities.. Though financials were trading at prices not supported by fundamentals, funds could not short them as the naked short rule was put in place right on time. Add redemptions and liquidations to the equation. and the Soveriegn Wealth funds selling gold to support dollar (this is what text book does not teach - SWFs selling gold to bolster dollar.. the money they were making on the strong dollar was more than the money they were losing selling gold).. This in short explains what is happeneing in the markets, to the commodities, to gold..
When will all this come to an end?? when the selling comes to an end.. and I am not good at picking up the time correct.. It is wise, thus, to own options in commodities .. I happily own options of gold, Jan 09 exp.. 10 strike.!!! :)
Tuesday, September 9, 2008
Its a crime to have a conviction in these markets. If you have any, you are proved wrong, in your face!! Monday, the big news that made the indexes across the globe rally was the bailout of FNM and FRE.. after all they are too big to fail.. Dow rallied near 300 points. Normally, such a bail out is inflationary and lthe dollar theoaritically should weaken, pushing Gold, if not any other commodity, up.. But well,, this is not the market where you play according to teh books. Open tuesday, the market shed most of the gains it had the prev day. Leh in the spot light, hitting a 10-year low.. Seems Korean govt has (and has not - might as well be a rumor) advised KDB against buying a stake in Leh. Indeed who would want to wash their money down the drain.. Leh has relatively more exposure to Commercial/Residential mortgages, fixed income business,, which are both in shatters.. added to the woes, the asset management, Underwriting, M&A business has all dried out. However, is the stock tumbling form low 60's to 9 dollars not enough for everything. Guess not. Spread on CDS (Credit Default swap) for Leh debt increased by about 150 basis points, pointing that LEH currently is a risky investment. As some economists have pointed out, may be leh is the next BIG bank to go under!
On other news, DEll bought 100 million worth of shares in Dell.. A significant insider buying.. what should technically happen to the stock.. go up ofcourse.. and what incidentally has happened today.. No sign of uptick!! Current trade philosophy - if there is a bad news on a stock, beat it, if there is a good news on a stock - beat it..
what are the stocks with about 1.2 Bn market cap, with 1B shares outstanding that can have a wild 50% swing on a single day??? answer - FNM and LEH..
Not surprisingly, FNM and FRE were awarded tax breaks by IRS and they get to keep all the NOL's - about 12 Bn.. That should get their effective tax rate to 0 for teh next 20-30 years!! catch is, it is only good if they are able to make any money!!
Till a couple of weeks back, the market strategy was to long commodities and short financials.. but now the former part of the equation seems to have altered. Commodities are facing a wide sell off, because of the percieved global slow down. High oil and commodity prices have created a demand destruction and a slow down of global economy. Its hard to restarin from going with the natural tendency - to invest in commodities are they seem to be at attractive valuations.. But, I do not think this is not a right time to get in.. Lesson - Never try to catch a falling knife!!. I really would like to know who is buying USD and what they're doing with it? They're not buying commodities or stocks or real estate or gold or American cars. WHAT ARE THEY BUYING,, Ipod, XBOX?
Apple unviels its new Ipod.. reception - lucke warm and the stock down 6. Thats the problem if investors have thier expectations high on a compnay. esp in these markets.. Microsoft on the otherhand is coming up with a newer version of Zune (and recently slashed the prices of Xbox). Well, dwelling the numbers, AAPL sold about 150 mill of ipods and Zune about 2 mill.. How do you think the market recieves MS zune changes considering the reaction to new ipod..
Bankruptcydata.com reports that 15 major retailers have filed for bankruptcy this year, compared with seven in all of 2007.
BAd news all the way!! The well-regarded Manpower Employment Outlook Survey's look at corporate hiring plans found that a net 9% of firms expect to hire in the fourth quarter, down from 12% in the previous quarter, and 18% for the fourth quarter a year ago. According to MarketWatch, this is the longest string of quarterly declines in two decades.
On other news, DEll bought 100 million worth of shares in Dell.. A significant insider buying.. what should technically happen to the stock.. go up ofcourse.. and what incidentally has happened today.. No sign of uptick!! Current trade philosophy - if there is a bad news on a stock, beat it, if there is a good news on a stock - beat it..
what are the stocks with about 1.2 Bn market cap, with 1B shares outstanding that can have a wild 50% swing on a single day??? answer - FNM and LEH..
Not surprisingly, FNM and FRE were awarded tax breaks by IRS and they get to keep all the NOL's - about 12 Bn.. That should get their effective tax rate to 0 for teh next 20-30 years!! catch is, it is only good if they are able to make any money!!
Till a couple of weeks back, the market strategy was to long commodities and short financials.. but now the former part of the equation seems to have altered. Commodities are facing a wide sell off, because of the percieved global slow down. High oil and commodity prices have created a demand destruction and a slow down of global economy. Its hard to restarin from going with the natural tendency - to invest in commodities are they seem to be at attractive valuations.. But, I do not think this is not a right time to get in.. Lesson - Never try to catch a falling knife!!. I really would like to know who is buying USD and what they're doing with it? They're not buying commodities or stocks or real estate or gold or American cars. WHAT ARE THEY BUYING,, Ipod, XBOX?
Apple unviels its new Ipod.. reception - lucke warm and the stock down 6. Thats the problem if investors have thier expectations high on a compnay. esp in these markets.. Microsoft on the otherhand is coming up with a newer version of Zune (and recently slashed the prices of Xbox). Well, dwelling the numbers, AAPL sold about 150 mill of ipods and Zune about 2 mill.. How do you think the market recieves MS zune changes considering the reaction to new ipod..
Bankruptcydata.com reports that 15 major retailers have filed for bankruptcy this year, compared with seven in all of 2007.
BAd news all the way!! The well-regarded Manpower Employment Outlook Survey's look at corporate hiring plans found that a net 9% of firms expect to hire in the fourth quarter, down from 12% in the previous quarter, and 18% for the fourth quarter a year ago. According to MarketWatch, this is the longest string of quarterly declines in two decades.
A quick glance over at the Forrester study of IT spending found that 43% of companies have cut IT spending this year. How can companies like Oracle (ORCL), Microsoft (MSFT), and IBM (IBM) have strong earnings into next year with that kind of trend?
A Bloomberg News survey of 39 economists showed that they believe pending US home sales dropped again in July.
Sunday, September 7, 2008
Finally Treasury had laid out a plan to bail out FNM and FRE. Not surprisingly, the rescue plan was made public on Sunday (now investors would be scared to hold Finacial stocks over the weekend). Monday, FRE and FNM would fall to near zero levels, the dollar weakens, pushing gold and commodities up. stick to the same strategy that I laid out a couple of days back.. long gold and ferts, commodities.. Will it work.. Well .. i am not sure!!!
Its a crime to hold a conviction in such markets!!!
Its a crime to hold a conviction in such markets!!!
Friday, September 5, 2008
My take.. Sep 5
Todays market action has been pretty volatile.. down more than 100 points at one point but ended in green by the end of the day. Labor department announced a sharp decline in nonfarm pay rolls.. THe unemployment rate stands at 6.1% now.. up about 40 basis pionts from last month.. the highest since 2003. Later in the day, financials rallied, and did the commodities too.. on no particular news.. I guess, this is just a buy in on a last day of the week.
Coal stocks intrigue me a lot. Oil had hit a peak of 147 sometime in june, and thats when the oil&gas stocks peaked. When oil started its trend down stairs in an elevator, no energy related stock was spared.. and surprising for me, the coal stocks followed suit.. Irony is that the Coal prices in the futures market, and teh spot market have not come down.. There is a big disconnect between the prices of coal and the stock action.. Did the fundamentals change?? Nada.. I am hoping for a big time come back for coal stocks..
and gold and dollar.. yet another hard nut to crack.. I am loosing my brother's savings a lot betting on these stocks!!
Coal stocks intrigue me a lot. Oil had hit a peak of 147 sometime in june, and thats when the oil&gas stocks peaked. When oil started its trend down stairs in an elevator, no energy related stock was spared.. and surprising for me, the coal stocks followed suit.. Irony is that the Coal prices in the futures market, and teh spot market have not come down.. There is a big disconnect between the prices of coal and the stock action.. Did the fundamentals change?? Nada.. I am hoping for a big time come back for coal stocks..
and gold and dollar.. yet another hard nut to crack.. I am loosing my brother's savings a lot betting on these stocks!!
Thursday, September 4, 2008
My take on the markets - Sep 4
A bad day for the market.. dow down 344 points down, the longest losing streak since Jan. Unemployment cliams data was out today and it was not a soothing news. .Claims went up by 15000, to 444000 - figure well above the recessionary level of 400000. Ospraie went down draggin the commodities along with it. Not a very good respons for the debt sale of FNM and FRE. drop in a oil price. Rumors that Atticus has to liquidate its assets.. Every thing that has happened has left investors gripped wit he fear that the worst is yet to come and instigated a across-the-board sell off.. Finanaisl, materials, tech, comodities, oil, natgas, gold - every thing was down. It is a bottom yet.. I guess not.. Wall Street has been talking about suprime, consumer spending, credit card debt, student loans, ARS for quite some time now.. but what I feel they would start talking aout it the corporate spending. Till now the long story was the corporate balance sheet strength and the earnings. lately the numbers seem to be quite disappoiting signalling a global slow down.. GLW, WFR signalled weakness in comsuner electronics and Semiconductors.. and there is every reason to believe tis is just the begining of the storm..
However, this is not the end of the world.. In every bear market, there would be some place to hidethe money.. GEOY,
Wednesday, September 3, 2008
Market News Sep 3
Contrary to what I anticipated Gustav didnt hit the Gulf of Mexico coast and left the oil rich region unscathed. Well, oil was down sharp, trading at 105 at one point, but settled at 109.. The market action - overselling every commodity stock in sight.. Oil stocks were down, Nat gas stocks were down, Airlines were up and there ends the rational behaviour.. Coal stocks were down, commodities like corn, wheat, soybean were off, fertilizers were down, Mining equipment stocks were down, agricultural stocks were down.. Part of the reason for is the liquidation of a commodity hedge fund. My opinion, the same stocks that are down, would gain their normal trading levels in a couple of weeks time. I would be long in all the over sold stocks.. ACI, POT, MOS, CF, BTU, KOL, BUCY, JOYG to name a few..
That brings a question what is the fundamental price of oil.. what would it be 1 month, 1 year, 5 years down the line.. Well,, I do not know the exact answer to this, but in my view of fundamentals, I guess oil would continue to trade above 100 levels for the near and far future.. Price of oil is a pure supply demand play.. Supply is supposed to have peaked at 85-90 mn barrels a day.. and with the current demand destrcution in play, the demand might seem to have not outstripped the suply.. But the key to the oil supply is held in the hands of a few.. OPEC to be precise.. It is not in their best interest to keep the production at the current levels and see the prices go down.. I bet they would curtail the production in their spet meeting.
Oil denad in US spiked from 17.7 M barrels in 1995 to 20.7 mbd - 17% increase. China’s consumption vaulted from 3.4 million bpd to 7 million bpd – a 106% increase. India’s oil imports are expected to more than triple from 2005 levels by 2020, rising to 5 million bpd. well is the trend going to continue - you bet..
Another commodity that is down big in the last two days is Gold.. It shed over more than 45 dolls falling below 800 dolls for the second time in the last 6 months.. On the other hand, Dollar has gained strength against all the major currenies.. But the dollar gain can wear off in the near term, and gold being a seasonal metal, I believe the gold prices should reach 900 levels again..
That brings a question what is the fundamental price of oil.. what would it be 1 month, 1 year, 5 years down the line.. Well,, I do not know the exact answer to this, but in my view of fundamentals, I guess oil would continue to trade above 100 levels for the near and far future.. Price of oil is a pure supply demand play.. Supply is supposed to have peaked at 85-90 mn barrels a day.. and with the current demand destrcution in play, the demand might seem to have not outstripped the suply.. But the key to the oil supply is held in the hands of a few.. OPEC to be precise.. It is not in their best interest to keep the production at the current levels and see the prices go down.. I bet they would curtail the production in their spet meeting.
Oil denad in US spiked from 17.7 M barrels in 1995 to 20.7 mbd - 17% increase. China’s consumption vaulted from 3.4 million bpd to 7 million bpd – a 106% increase. India’s oil imports are expected to more than triple from 2005 levels by 2020, rising to 5 million bpd. well is the trend going to continue - you bet..
Another commodity that is down big in the last two days is Gold.. It shed over more than 45 dolls falling below 800 dolls for the second time in the last 6 months.. On the other hand, Dollar has gained strength against all the major currenies.. But the dollar gain can wear off in the near term, and gold being a seasonal metal, I believe the gold prices should reach 900 levels again..
Trip to Lousiana..
A day before the last of teh long weekend, I and Harish decided to drive to Ruston and Pensacola. We never had thought that we would experience the Gustav effects..
The ride there was amazing like always.. Had a quick stop over at Shrevenport to gamble in the casino, and well, I lost 40 bucks and Harish lost 120 bucks.. It was interesting.. At one point we were up 100% and it woudl have been good had we atleast changed the table. But no,, the greedy side in both of us made us yearn for more and eventually we lost our initial money.. I felt very bad for Harish.. :) ..
Well, reached Ruston almost at the midnight, and kicked off the weekend witha lengthy before-sleep conversation with Pandu and Harish. Next day morning Harish left, and I was left in the company of Mr and Mrs Pandu and Mr and Mrs Laxmi. At times it was odd to be in the company of Families.. but most of the times I felt HOME.. I guess I would not find it a hassle to get used to family istyle again.. !! :)
The whole two days went amazingly good and me and Harish drove back on Tuesday night.. I look forward for teh next long weekend. :)
Bil and Jeremy were pissed off by my one day delay.. Though it is not my fault at all, i should have informed I was caught in Gustav!! With a lighetr note, Bill's comment - "You stupid little fuck, I dont think they will teach you this in B-School, but you never should travel into a hurricane" ..
Anyways, It was not good to be back at work.. We were down big in Aug, and I have a lot of ground to cover.. Me, Bill and Jeremy discussed about what needs to be done and finally they bought some of the stocks I recommended.. I hope my ideas will make some money for us..
The ride there was amazing like always.. Had a quick stop over at Shrevenport to gamble in the casino, and well, I lost 40 bucks and Harish lost 120 bucks.. It was interesting.. At one point we were up 100% and it woudl have been good had we atleast changed the table. But no,, the greedy side in both of us made us yearn for more and eventually we lost our initial money.. I felt very bad for Harish.. :) ..
Well, reached Ruston almost at the midnight, and kicked off the weekend witha lengthy before-sleep conversation with Pandu and Harish. Next day morning Harish left, and I was left in the company of Mr and Mrs Pandu and Mr and Mrs Laxmi. At times it was odd to be in the company of Families.. but most of the times I felt HOME.. I guess I would not find it a hassle to get used to family istyle again.. !! :)
The whole two days went amazingly good and me and Harish drove back on Tuesday night.. I look forward for teh next long weekend. :)
Bil and Jeremy were pissed off by my one day delay.. Though it is not my fault at all, i should have informed I was caught in Gustav!! With a lighetr note, Bill's comment - "You stupid little fuck, I dont think they will teach you this in B-School, but you never should travel into a hurricane" ..
Anyways, It was not good to be back at work.. We were down big in Aug, and I have a lot of ground to cover.. Me, Bill and Jeremy discussed about what needs to be done and finally they bought some of the stocks I recommended.. I hope my ideas will make some money for us..
Monday, September 1, 2008
Long weekend news
Gustav didnt impact the oil prices, and currently trading at 114 again..
Alitalia has gone belly up! and the traitor - high oil prices.. Are any of american airlines next in line???
another scary news - Atticus Capital, one of New York’s most powerful hedge funds, has lost $5 billion this year. in this environment the metric for measuring success is redefined.. its not how much money you make, its how much less money you lost is important..
Alitalia has gone belly up! and the traitor - high oil prices.. Are any of american airlines next in line???
another scary news - Atticus Capital, one of New York’s most powerful hedge funds, has lost $5 billion this year. in this environment the metric for measuring success is redefined.. its not how much money you make, its how much less money you lost is important..
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