Randoms: Mergers, Hedge Fund Structures & Trading Set-Up
By Marcus Laun Sep 09, 2009 11:40 am
The only thing to fear is fear itself.
- Why are Pebble Beach and Rockefeller Center suddenly popping into my crowded keppe?
- Bharti Airtel Ltd., India's biggest mobile-phone company, and South Africa's MTN Group Ltd. have announced a $24 billion marriage, according to Bloomberg. Can you imagine how big the ice sculptures must be?
- On the heels of the Disney (DIS)-Marvel (MVL) union and the semi-sweet Cadbury PLC (CBY)-Kraft (KFT)-Hershey (HSY) Ménage à trois, the bulls can throw another anecdotal log on the optimistic M&A fire.
- I'm a 4 bid for size on Raider wins this year if anyone is feeling frisky.
- As discussed in Tuesday's opener-and followed up in yesterday's Randoms-I've been operating from the short side into the upside down devil (09/09/09) with an all-caps "DISCIPLINE OVER CONVICTION" taped to my turret.
- That means tight stops, which will trail given the opportunity. With regard to my tech bets-which is the meat of my downside heat-I've shifted my lens from the NASDAQ COMP (see the 5-year set-up here) to the NDX, which is sitting at the intersecting trend-lines and a push through NDX 1675 would invalidate that critical crossroads).
- Reactive rationalization or astute audible? I'll tell you in 5% although, given my entry levels (following last Tuesday's full cover), the risk-reward fits my stylistic approach, risk appetite and time horizon. Setting stops removes emotions and will limit face plant falls to embarrassing stumbles.
- The risk to that bisque? The dollar, which is on a collision course with a Monopoly peg (keep in mind this is a necessary precondition--but not guarantor--of higher asset classes), performance anxiety, which will increase .0089% every 24 hours over the next 113 days, and the action in the credit markets (which, if it continues, will lead to more M&A and other shareholder enhancing efforts).
- On the S&P side of the equation, a push through S&P 1040, with moxie, will quell Boo's bandito persona. The udder way, S&P 980 is the first level of discernible support.
- With Honest Abe sitting on my shoulder, I'll offer that hands over eyes, the market acts awesome and I learned a long time ago to respect--but never defer to--the price action.
- My current posturing-which feels like a salmon swimming up a waterfall-is a attempting to capture the disconnect between perception and reality.
- Unemployment, social mood, geopolitical tension, unsustainable debt, the DC I.V drip, commercial real estate, swine flu, municipal time bombs...they won't matter until they do-and they might not matter till 2010-but I see them clear as day.
- The risk--which seems to be my perpetual risk--is that I'm always early, a blessing and a curse if there ever was one.
- If I'm wrong, I'll suck down a slab of humble pie (again) and remind myself that good traders know how to make money but great traders know how to take a loss. I know all too well that if you don't stay humble in this business, the market will do it for you.
- In my Ten Themes for 2009, I offered that we would likely see a substantial shift in the hedge fund compensatory structure. I believe that process is well under way and I share the option offered in January as a potential possibility.
Typical hedge fund terms are "one and twenty," or 1% management fee and 20% performance fee. Expect industry standards to shift to a three-year aggregate performance structure that eliminates the annual payout and weeds out the excess capacity in this space.
- My single biggest pairs trade? Long humility, short hubris.
- As my peeps keep telling me to push my tweets, I'll do so again sans any semblance of shameless self promotion.
- Citi (C), Bank of America (BAC), JPMorgan (JPM), Amazon (AMZN), Research in Motion (RIMM) and Apple (AAPL) are channeling Andie Walsh. Maybe something, maybe nothing-maybe a pterodactyl-but see it please.
- Wouldn't the world be a better place if everyone did what they say and say what they did?
- Hey, if society is a sum of the parts, why not join the Minyanville Underground Railroad and do your part? If not us, who? If not now, when?
- Have you seen Hoofy & Boo's latest take on multitasking?
- Whose with me?!??
- Good luck, Minyans---and let's be careful out there!
Answers I Really Wanna Know…
- In holiday shortened weeks, does Turnaround Tuesday morph into Turnaround Wednesday?
- Can Minyans possibly be surprised that China is alarmed by the US printing press?
- Trade options? Have you taken your free trial to our OptionSmith by Steve Smith subscription product?
- Will Richard Seymour (please) report to the Oakland Raiders?
- Do you have Friday, December 4th circled for our annual Festivus to benefit the leaders, healers and dreamers of tomorrow?
- Why can't I shake the sense that something seismic is looming?
- Isn't the ability not to trade as important as trading ability?
- Does anyone recognize the overweight scruffy guy who continually channels Bud Fox in Oliver Stone's 20th Anniversary Wall Street documentary (the only person who appears without a credit)?
- Isn't end demand a necessary precursor to hyper-inflation?
- Is a lower dollar and lower stocks the path of maximum frustration?
Position in ndx, spx, rimm
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