Wednesday, September 3, 2008

Ospraie Shuttered.

I received a couple of emails from some hedge fund jockeys out there taking me to task for my commentary posted yesterday. These guys and gals made some very impassioned and shall I say, colorful arguments as to why they are the "smart money" in the market. Arguments as to why they are "nimble enough" to avoid the disasters out there. Arguments as to my personal inadequacies and petty jealously. Fair enough, but rather than get personal lets look to some facts.


Well, well, what do we have here. News this morning regarding the shuttering of Ospraie hedge fund after a 38% loss. Once again, further empirical evidence in support of my claims, that these guys not only are NOT the smartest money on the street but rather the cocktail of their hubris, facade of superior intelligence, and belief they were born with a better pot to piss in makes them a lethal and outright dangerous. Kinda like a 17yr old male with the keys to Daddy's Vette with a bottle of Jack. Yup, smart money for sure. The amount of evidence in favor of my claim is almost embarrassingly overwhelming, to the point that I almost feel sorry for these Kool-aid drinking, brainwashed minions of privilege.


Now I have never met Mr. Anderson nor do I ever expect to. He is probably very charitable and generous in his community, but the news regarding his fund begs the question, "don't you have an uncle point?" At what point do you admit you are wrong. If he were a military general, can you imagine the casualties among his troops? When to you admit defeat, cut and run to regroup. There is no honor whatsoever in getting slaughtered. Where are the adults here?

Would that he have had the humility to hire someone, anyone who might disagree with his strategy or views, no matter how sound or well researched they may be. I have no doubt whatsoever that Mr. Anderson and Ospraie have the ultimate in technology, resources, access to information, you name it, they got it. But when you have a well heeled, well educated staff of yes lackeys, the likes that inhabit the hallways of Cerberus, Long Term Capital et al., you can start to see how small problems can become mushroom clouds.

I cat like me wouldn't get past the office admin pool supervisor in an outfit like Cerberus or Ospraie but I can confidently tell that it might behove some of these white shoe bastions of higher thinking to start combing the local city, community college or poker rooms for some individuals with a little grounding, street smarts and a healthy dose of common sense. Seems to me they could use a little.

While on the topic of dispensing unsolicited advice I would also counsel Mr. Anderson to look up the definition of a stop loss order. (hint, it would be in the Stock market 101 book). I outline all this in the hope you are starting to get the picture now. One can take any strategy and I mean any and with a judicious use of loss management, succeed. Personally my preferred strategy is of that steer down in Texas, (yes a steer) where they put down the names of every stock in the S&P500 as the floor of the rind and let the steer out into the ring. Wherever he takes a dump, those are the stocks that go in his portfolio. I will let you guess what his performance is like. Hint, if you didn't know he was a steer and didn't know his method, you would give him money, guaranteed!


I heard this morning the Home Depot CEO claims that we are very close to a bottom in housing. Who can blame his blind enthusiasm as his job depends on it quite heavily. You can rest assured the cheerleaders on CNBC will promote, and repeat his comments no less than, my guess, 30 times today. I didn't see any factual data to support his claim but why let that get in the why of a good pump.

Good speculating to you all and never ever forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 2 units of Powershare Agriculture ticker DBA @ $35.35 stop $34.79
Long 2 units of XTO Energy ticker XTO @ $45.40 stop at $44.42
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $128.56
Short 3 units FedEx ticker FDX @ $87.10 stop at $88.16
Short 2 units of Apple ticker AAPL @ $178.05 stop at $182.76
Short 1 unit Salesforce.com ticker CRM @ $57.05 stop at $60.62

1 comment:

VoiceFromTheWilderness said...

not that I want to support the other guys position in this argument at all, in fact I have no data with which to make a judgement either way.

But in general in discussions about how smart or stupid our owners are it seems to me one point gets missed. You don't know whether they are smart or stupid until you know what they were aiming for. Getting 'shuttered' is a bad outcome if you are trying to make money for clients. But if you are trying to make money for yourself, then it may or may not matter, depends on how much you have stashed away in a swiss bank account.