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Showing posts from February, 2010

Alphatrends weekly market wrap

Brian Shannon of Alphatrends takes us through his Weekly Wrap on Stocktwits TV with a technical look at the major US market averages and a view to the trading week ahead.

Brian's technical analysis videos tend to highlight the action of leading stocks and the major averages in multiple timeframes (hourly, daily, & weekly charts).

While I'm not as familiar with his trading style as others might be, I do like to check out his videos on a regular basis, in addition to following Brian's trading notes and market thoughts on Twitter.

Take a look at Shannon's market wrap, and if you like what you see, you can find additional episodes (and a variety of additional trading and investing themed content) at the Stocktwits TV archives.

Altucher: Things I learned from Vic Niederhoffer

When James Altucher mentioned (on Twitter) that he was preparing an article about lessons learned while trading for Victor Niederhoffer, I knew that was one essay I'd be looking forward to.

Here's James on, "Ten Things I Learned While Trading for Victor Niederhoffer":

"I traded for Victor Niederhoffer for about a year starting in 2003. I was up slightly more than 100% for him, primarily trading futures using a quantitative approach. During that period I had one down month: June 2003.

Victor was a top trader for George Soros before starting his own fund in the ’90s and then writing the classic investment text “Education of a Speculator.” He then suffered one of several blowups in his career when his fund crashed to zero while on the wrong side of a couple of bets during the Asian currency crisis in 1997 (most notably, he was short S&P puts when the market crashed that year).

Despite that, Victor has consistently traded his own portfolio quite successfully and is…

Richard Russell: Last Man Standing

Even though I'm able to read Richard Russell's Dow Theory Letters at the town library (they are subscribers), it's nice to find snippets from his daily remarks up on 321gold. It's convenient, and I can easily share samples of his excellent writing with others.

Here's one that I'd like to share with you, a recent update from Russell on gold and the state of America's finances called, "Last Man Standing".

"A final thought. One could stay in US dollars and gold. If the dollar goes to hell, rising gold could make up for the loss in purchasing power.

A hundred years ago gold and silver were the only items accepted as money. Paper money was carried around because it was convenient as opposed to gold and silver, which are heavy. Besides, if you had any doubt about your paper, you could turn it in at any national bank for gold, "the dollar was as good as gold." Furthermore, the dollar was backed by one of the strongest and most prosperous nati…

John Allison on "Leadership and Values"

John A. Allison, then acting CEO and Chairman of BB&T bank (now retired), gives a talk on "Leadership and Values" at the University of Virginia's Darden School of Business.

Why am I linking to this lecture by John Allison? Very simply, Allison's excellent talk addresses a greatly overlooked theme in American business and life today: establishing one's code of personal ethics.

Now what makes John Allison qualified to deliver such a lecture?

Allison, who we highlighted (and who the NY Times profiled) in our post, "BB&T prefer liberty and reason to bailouts", grew the North Carolina-based BB&T bank by leaps and bounds while it gained plaudits from customers and the business community for its integrity and high rates of customer satisfaction.

While large banks and mortgage lenders across the country sank their customers, themselves, and our overall economy through their overexposure to residential housing and subprime mortgage loans, Allison and BB&…

Market Wrap: Chris Puplava & Co.

Guys, if you're taking a long view of the markets and studying up on economic trends this weekend, you might want to take a look at Chris Puplava's latest market wrap for FSO.

Chris has put together an update on the credit markets, with some thoughts on US Treasuries and the direction of long-term interest rates.

There's also quite a bit of data and commentary on China's holdings of US govt. debt and the "state of the states" - US state finances. Plus, you'll get a look at the economic recovery, bank lending practices, market sentiment indicators, and more. Lots to look at here.

And if you've got time to check out Martin Goldberg's recent market wrap on the Emerging Markets (and ETF $EEM in particular), you'll find some worthwhile technical commentary there as well.

Have a good weekend, and if you're surfing our part of the blogosphere, check back in for some new updates & video posts. See you then.

To short or not to short?

I'm reading some of the great stuff put out by the bloggers in the Stocktwits network and I wanted to share two great posts, from Joe Fahmy and Keith McCullough, on the pros and cons of short-selling.

The first post, by Joe Fahmy, is entitled, "Why I Hate Shorting Stocks". Here's an excerpt from Joe's lead in:

"When I called for a market correction in mid-January, I received several emails asking me why I don’t recommend short ideas. In my Introduction blog post, I talk about finding an investment philosophy that fits your personality…and quite simply, shorting is not for me.

The title of this article is not meant to offend anyone, as I never try to impose my trading style on anyone. I actually believe that shorting is a necessary part of the stock market and that short-covering can add stability to a correcting or “free-falling” market. Nevertheless, it doesn’t fit my personality and here are my reasons why: ..."

Joe is one of the most interesting and ed…

Video: Russia Forum 2010

Must watch video of a panel discussion with Marc Faber, Hugh Hendry, Nassim Taleb, Michael Power, and others at The Russia Forum 2010.

As moderator, Marc Faber begins the discussion by asking the panel members how they would invest $100 million for the year ahead. A varied discussion on the global economy, geopolitics, inflation vs. deflation, risk, food and energy systems, and the rise of emerging markets ensues.

Great macro discussion with seeds of investing ideas and global macro trades sprinkled throughout. Don't miss this one, and thanks to Jay at Marketfolly for highlighting this discussion.

How far will Greece's problems spread?

So just to follow up on our last post about debt problems in Greece and the EU, I'm hearing that some people are having a hard time making sense of this crisis and what it means for the whole of Europe.

To that end, I've decided to highlight a few helpful articles that will further our understanding of these sovereign risk issues.

We're seeing a growing worry that problems in Greece, UK, Spain, et. al, will spread throughout the eurozone and signal problems for other developed nations as well. Are these fears justified? Let's take a quick look and see what we find.

First off, The Economist reported yesterday that the EU summit on Greece yielded only "vague promises of solidarity" and no concrete plans for how a bailout of Greece by larger EU nations might come about.

Here's an opening excerpt from that piece:

"“PRETTY catastrophic”. That was the verdict of a depressed-looking diplomat, at the end of a Brussels summit on Thursday February 11th that saw…

Understanding Greece and the EU

As I understand it, a bailout of any EU member nation (say Greece) is illegal under the Euro-establishing Maastricht treaty.

However, Josh Lipton at Minyanville points out a possible loophole should the European nations want to skirt that rule:

"The only real question for members of the Eurozone, says Dr. Ed Yardeni of Yardeni Research, is whether to boot out or bail out the Greeks...

...The economist emphasizes that the Maastricht rules contains a "no bailout" clause to ensure that a member country's budgetary problems couldn’t spill over and damage the credit rating of the Eurozone as a whole.

However, he writes in a recent research note, there's belief that the Eurozone could get around this by invoking Article 122 of the Lisbon Treaty, which allows the European Union to throw a financial life-preserver to a member country suffering tough times."

So the next question for market watchers and EU citizens (or their political elites) to consider is whether or not…

Bloomberg: weak dollar, inflation "illusory"

Apparently, the continued erosion of the US dollar's purchasing power and the ensuing inflation we've witnessed since 1975 has been merely an illusion.

So says Bloomberg in an astonishingly misleading article entitled, "Weak dollar illusory as correlated trade gains show":

"For all the concern over the $1.6 trillion U.S. budget deficit and record debt load, the dollar is as valuable now as 35 years ago. Measured against a basket of currencies from the Group of 10 nations proportioned by how they trade against each other, the greenback is up about 3 percent since 1975, according to Bloomberg Correlation-Weighted Currency Indexes.

That was four years after the Bretton Woods agreement, set up in 1944 to link currencies to the price of gold, collapsed. The U.K. pound has dropped 34 percent and the Canadian dollar has fallen 6 percent."

Using the Bloomberg Correlation-Weighted Currency Index as a value benchmark, the writer purports to show that the dollar is jus…

Jim Chanos: "overheating" in China

Here's what I'm currently watching: noted short-seller and hedge fund manager, Jim Chanos gives a talk on "Overheating & Overindulgence" in China at the London School of Economics Alternative Investments Conference (see also: Bloomberg video).

We've noted here before that Chanos is hugely bearish on the Chinese economy and looking to bet against its overheated real estate and construction businesses by shorting commodities and ancillary suppliers.

In this presentation Chanos offers his thoughts on China's GDP growth, its credit excesses, and the interplay of its economic and political system. Very interesting stuff, even if Jim Rogers is skeptical over the recent findings of newly-minted China experts.

Is he right? Given my limited knowledge of the situation, I'm inclined to agree with Marc Faber (a friend of both Chanos and Rogers) who notes that Jim Chanos is "hyper smart" and willing to back his thesis, though it's uncertain how the timi…

Does real GDP growth signal recovery?

Over on Twitter this morning, The Kirk Report tweeted a link to a Wells Capital Management report that offers some upbeat news on prospects for economic recovery.

Here's an excerpt from that report entitled, "Current Real GDP Recovery Looks as Strong as 1975, 1982 Recoveries":

"Despite a strong fourth-quarter real GDP report, the debate surrounding the strength of the contemporary economic recovery lingers. Most seem to anticipate a subpar recovery similar to the last two during the early 1990s and after the dot-com meltdown in the early 2000s.

However, although the current recovery is only two quarters old, it is thus far closely tracking the strong recoveries of 1975 and 1982..."

There follows some interesting charts and data summaries which lead the authors to conclude that the current recovery, measured on real GDP growth, is much stronger than many had believed it would be.

I am happy to consider positive arguments for economic growth, but I'm also lef…

SIGTARP report: housing bubble 2.0?

Last night, FT came out with this report on Sig-TARP probing possible insider trading at US banks:

"Neil Barofsky, the special inspector-general overseeing the US government’s financial rescue efforts, is to probe allegations of insider trading among bank executives and their associates.Eight of the largest banks in the US received between $2bn and $25bn in October 2008 under a programme to prop up the financial system led by Hank Paulson, then Treasury secretary.
Dozens more institutions followed and Mr Barofsky, who examines the troubled asset relief programme, is looking into whether information improperly made its way to trading rooms during a feverish period in which the government and banks were frequently exchanging information..."
The article goes on to say that much of the latest SIG-TARP report focuses on government's increased role in the housing market.
"Much of Sig-Tarp’s new report is given over to an examination of the housing market and the multitude …