Getting back to this -- I have felt extreme animosity towards Ballmer for years, calling him out as a walking disaster since 2005. I would forget about what a complete value-destroyer the guy was, and then he would do or say something jaw-droppingly ham-fisted and I would be reminded all over again. For the longest time I couldn't figure out why the guy bugged me so much... why he unleashed such intense negative feeling. I finally figured it out: Ballmer was a trade. My deepest intuitions were telling me the guy was a massive short, and the animosity was my gut's way of broadcasting inner conviction. MSFT being so cash-rich and hard to dent, even for Monkeyboy, I never found a way to adequately express the idea... Side note / crazy stat from the VF piece: One product, Apple's iPhone, now brings in more revenue than all of MSFT's lines COMBINED. Sick... p.s. My favorite line from the article comments: "I really can't help the feeling that someone in a high position over there secretly wants the company to go broke. Maybe he has depression and is committing suicide by proxy."
<iframe width="500" height="340" src="http://www.youtube.com/embed/lB0_QEh-KVs" frameborder="0" allowfullscreen></iframe> Bartley Gorman was one of the last bare-knuckle boxing champions. If you can't take pain, real pain I mean, you can't be a fighter. Tom Hardy labeled Gorman -- "a bare knuckle fighter, Romani Gypsy" -- as his model for Bane's accent in Dark Knight Rises (though the result sounded a lot different -- kind of an educated gentleman thug, which was cool). This is the kind of guy who chews iron and spits out nails. It's interesting how he shuns his life of hardship, wishing wholly other for his children. Guys like Gorman are a reminder of what real toughness, real coming up through hardship and being harder than the ground you walk on, is all about. The mental toughness required for trading is no joke, but for the sufficiently trained it's a cakewalk in comparison. I'd like to think I can handle what this guy handled, but hope I never have to.
The typical investor experience... Does the public even participate anymore, except indirectly via pensions, IRAs etc?
Fading into Fed Day: http://www.elitetrader.com/vb/showthread.php?s=&postid=3585707#post3585707 There is buzz going around as to the market's remarkable performance on Fed days. A huge portion of the market's gains since 2008 have come specifically on Fed days (such as Wednesday Aug 1st) rather than other days. In our opinion, being long Wednesday in anticipation of another "Fed day effect" is a classic example of data mining and getting trapped into bad thinking by historical stats. While true that the market has gained big on past Fed Days since 2008, these gains also largely incorporated the element of aggressive action and sentiment surprise. But what are the odds of aggressive action this time? Fed mouthpiece Hilsenrath seems to be gearing markets up, or rather ratcheting expectations down, for a disappointment: http://online.wsj.com/article/SB100...750777782.html?mod=WSJ_WorldMarkets_LeadStory "Should a Fed action generate a rally in financial markets, history suggests it may be brief." The other factor that has driven past Fed-day gains, sentiment surprise, is dead and buried. QE3 and new stim prospects are now arguably as anticipated (and hoped for) as the Facebook IPO. Add on top of this bearish-flavored technicals -- this market is more likely to drop than further pop -- and, while outcomes are unknown as they always are, the positive expectation bet and Monte Carlo supported play is taking advantage of a potential rollover and/or ugly bearish surprise.
ADP jobs beat, 163K vs 120 expected, increases odds of Friday jobs beat, which, paradoxically, is probably a negative for stocks. An improving employment situation (or at least one that is not getting worse) gives even more weight to the "Fed stays its hand" scenario, as Bernanke and co. will want to preserve ammunition (in sentiment terms, they are unconstrained logistically but def. constrained tactically and politically) for future deteriorations / crisis developments. One caveat being ADP can be squirrelly, not always greatest correlation to what Friday brings.
Louis Bacon is giving back $2B to his investors: http://finance.yahoo.com/news/hedge-fund-titan-plans-return-152508776.html This article seems to imply that he is doing it in order to cut down the size of his funds to be competitive in this crisis-strewn marketplace. Any comments, darkhorse? And what about a hedge fund that trades strictly in US stocks? How big can a fund get in that area before it is too big to get good results?
From the article: "More so, however, is the psychic impact. For this super-competitive breed, to admit that that a market has confounded them is to concede a small measure of defeat." This market has been kicking my as for a year and a half now, and it seems to be due to gyrations from the European crisis. US stocks don't act like they did a few years ago. They are more choppy, and they move in synch, making it difficult to find ones trending against the grain, which has been my bread and butter in the past.
Another interesting point on Bacon: "In 1990, a series of winning bets he made that Saddam Hussein would invade Kuwait and would be quickly routed with no lasting market impact became the foundation of his legend -- securing a 115 percent two-year investment return and a flood of investment assets." I was a stockbroker in 1990, (my first day of work was the day Iraq invaded, talk about bad luck!), and I made literally hundreds of calls every day to prospective investors, along with the dozen or so other brokers in the office. Every single person we talked to, and I mean there were NO exceptions, believed that the market would crash when the inevitible ground war would start between the US and Iraq. In fact, it was a joke in the office for people to say, "I ain't doing nuthin' til this Iraq thing is over," because we heard it hundreds of times every day. So to see people like Bacon, (there were others too), who correctly called the outcome of the conflict really shows their skill.
Thanks for that article. The big boys have been treading water for years, eking out t-bill like returns and living off the management fees. The problem has just been exceptional amounts of hard-to-quantify risk. How do you handle markets that can scream higher or lower via random statements from a third-tier European politician? At the same time, the "big questions" all seem to be in Schrodinger's cat mode. Recession or global growth? Inflation or deflation? Eurozone survival or eurozone breakup? Yes, no, nobody knows. It's just an epically shitty time to be running huge sums in the classic macro style. What these guys are best at is finding opportunities to make large asymmetric bets WITHOUT taking on a large degree of risk. There are gamblers that win, but you see what happens to them. Paulson is a riverboat gambler at heart, something that was made clear early on. Look how he's wound up. The genius from JAT capital, whose huge bets are killing him this year. Kyle Bass, another subprime winner, betting huge against Japan and now that too-big-bet is squashing his returns. I'm betting that Chase Coleman, the multi-billion-dollar Tiger cub who killed it in 2011 going long out the wazoo on social media stocks pre-IPO, is the next big thud. So instead of the ballers who gamble and either win big or lose big, seasoned old pros like Jonesy, Bacon, Kovner etc (though Kovner is retired now) keep their risk small and cards close until they can find great opportunities. There just haven't been any in this central bank dominated, fucked up government intervention fest we call a market. I don't blame Bacon at all for giving capital back. Re, a fund strictly in U.S. stocks, that depends a lot on the style. Short-term trading, value investing, special situations, merger arb, quant, HFT, a mix of various... capacity depends more on strategies than asset class. Though I would say as a general rule guys with $100 million or less can still do pretty okay.