Monday, April 11, 2011

Animal Spirits, Market Gurus and Keeping Nimble

Took a few days off last week to care of some things around the house so my apologies for lack of posts.

Recovery Continues

For those that continue to believe that the recovery continues to march onward, that everything is A-okay, and that the 'animal spirits' are coming back I would suggest you skip reading the latest piece Why 2011 is Like 2000 and 2007 from the boys Charlie and Marty over at Comstock.

While on the subject I have to say I just love that one, animal spirits. First it was green shoots now its animal spirits. Lovely. I would bet Goebbels would've loved that one as well.

With all this good news about recovery one might wonder how news of a surge in mall vacancies could possibly happen.

Be careful discussing all this good news with the families of those that are now statistics in Las Vegas about this.

Market Gurus

Well it was market guru week on CNBC's squawk box in the morning last week. I am sure by now most everyone is aware of the smackdown Michael Steinhardt leveled against Warren Buffett. In case you missed it you can view it here from CNBC's website.

Regular readers know I am no fame of this phony, hypocritical charlatan whom the media fawns over ad nauseum. Now Becky 'Anna Nicole' Quick and her shallow pal hosts may be smitten with the wolf in sheep's clothing but I am not.

Congratulations to Mr. Steinhardt whom I do not know for - not only having the onions to say what he did - but to say it in the forum he did. 3 cheers for you Steinhardt! 3 cheers.

I also happened to catch Bill Miller of Legg Mason who was on as yet another market master. For those that didn't know or have forgotten, this is the same Bill Miller who never met a stock, in particular financials (who wouldn't in the ultimate ponzi scheme?) he wouldn't buy nor average down all the way to zero.

The Bill Miller playbook.

  • Take other peoples money and buy (it's a ponzi so buy financials).
  • Just keep buying (the stock market always goes up).
  • Mock anyone who claims your performance was related to the tide(this justifies your fees).
  • When positions drop in value buy more (heck, it's not your money).
  • When problems arise, your acumen questioned buy yet more (mention all the other parking lot valets own it as well).
  • Lunch with said parking lot valets, who all own the same things you do, confidently buy more.
  • When the shit hits the fan hide under your desk (helps if you've been working out).
  • Pray to the god you worship ($$$) for divine intervention (think TARP think Hank Paulson)
  • Re-emerge on CNBC as guru to claim genius status when tsunami of taxpayer bailouts floats your boat.
  • Rinse and repeat for best results.

Bill Miller, a pure financial genius. Ya think he loves free money. Fixes all woes.
I sure wish someone had taught me that game plan as a youngster. They should craft a statue of Miller in adoration so future generations can marvel at our stupid worship of the FIRE economy and ridicule how we all thought the tail wags the dog.

Aw heck, it's all good, just stop wondering why unemployment is 19%.

Quote of the month comes from David Walker the former U.S. Comptroller general regarding the budget debate:

"it's like arguing over the bar tab on the Titanic"

I heard someone, I cannot remember who, over the weekend refer to this market as entering "the stupid phase". Okay I hear ya, I thought only to have him then follow that up by stating "a lot of money can be made in stupid", adding on all the caveats that you need to be nimble, stay close to the exits yada, yada, yada.

Sure champ say nimble. Hey, come to think of it, when you're rounding that icy curve the 300 ft. vertical drop you might want to stay sharp fella !

One simply has to marvel at the crumb chasing, dyed in the wool, shallow Wall St. hacks. Better yet, how about I offer those, like that numbskull with a short memory the infamous words of one Chuck Prince (former CEO and now fired CEO of Citigroup) in this regard;

“As long as the music is playing, you’ve got to get up and dance, we’re still dancing.”

Yup still dancin' was he. Of course Chuck was stayin' close to the exits. Being nimble. Listent up here good, Chuck Prince was far more connected and 'in the know' than that numbskull I quoted earlier, me, you and just about 99.9% of the crumb chasing, parking lot valet sabbaticaled fund managers ever could be and he couldn't find the exit in time. Good luck if you think you can.

Just some food for thought if you will.

Housekeeping notes;

Wednesday last week I was stopped out of my TLT position at $90.89 for a loss of about 3/4 of a pt. on 1 unit.

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

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $96.70
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $60.30
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $60.50
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $98.25
Long 2 units Ultrashort Xinhua China ticker FXP @ $42.45
Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
Long 2 units Direxion Tech 3X Bear ticker TYP @ $52.60
Long 1 unit U.S. Dollar Bull ticker UUP @ $22.56 stop @ $21.44
Short 1 unit Darden ticker DRI @ $49.51 stop @ $49.71

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