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Randoms: Mergers, Hedge Fund Structures & Trading Set-Up


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…

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Position in ndx, spx, rimm
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