<b>vhehn</b>, if the ES rises 380 points this year, we'll have to weigh our money instead of counting it. When's the last time we saw an annual range in the SPX of 400 points? Been awhile. All this hoopla about new all-time Dow highs, 3-Dow indexes closing at record highs, pom-poms etc and for the past two months ES has tacked on +13.75 index points from closing high to current print? I see a tired market that cannot get out of its own way right now. Dow futures traders are a minority in our profession... daily volume proves that. For ES traders staring at 5pt intraday ranges and 10pt weekly ranges, we don't see any raging bull. This market looks more like the legendary Bodacious to me. Greatest bucking bull ever, but he now rests in peace.
380 more SP points feels like an awful stretch, I agree. What's more interesting to me is that all time high in SP about a hundred or so above where we are now (if I recall right) That's what I see us breaking through this year. To those that comment on the absence of corrections, I'd mention that there have been FIERCE corrections in many Dow components of 5, 10, even nearly 15%, in the past year or more. These are drive by selloffs just don't happen all on the same day.
<i>""A nation's progress can be judged by how they treat their animals."</i> As a lifelong hunter, fisherman and wildlife conservationist, I'm not a fan of bull fighting, dog fighting or chicken fighting at all. There is no place for any of that in this world, imo. That said, I do see 2,000lbs of lean beef ready for processing, Wayne!
That's not you is it AustinP http://video.google.com/videoplay?docid=6020264244416084639&q=hunter+deer&hl=en
Article Hall of Fame : King of the Jungle For three decades, hedge-fund heavy Michael Steinhardt ruled over the financial world with the ferocity -- and heart -- of a lion By: Rich Blake June/July 2005 , Page 44 During the more than quarter-century he ran his famous hedge fund, Michael Steinhardt never met a weekday he didn't like. "My attitude was, every morning, just by coming through the door, I had an opportunity to make money," explains Steinhardt, 64, who has been retired since 1995. That year, his flagship fund, Steinhardt Partners LP, totaled $2.6 billion and owned a track record, net of fees, that still astounds: 24 percent compound average annual returns -- more than double the S&P 500 -- over a 28-year period. What's more amazing is that Steinhardt did it with stocks and bonds, longs and shorts, options, currencies, time horizons of 30 days or 30 minutes. There were few instruments or investment approaches over which he didn't wield some mastery. The nerdy kid from Brooklyn not only made good; he made a fortune. For most of the '80s and '90s, Steinhardt consistently ranked among the highest earners (his net worth is pegged at $500 million), second only, perhaps, to George Soros during that period. Steinhardt always commanded the coveted"first call" from the big banks: Whether it was a revised estimate from an analyst or a heads-up on a hot IPO, the Street treated him like a king. For being a king in an arena with no shortage of same and for evolving into a prince of a man -- philanthropic passions drive him today -- Trader Monthly submits Michael Steinhardt as the fifth inductee into our Trader Hall of Fame. In a recent sit-down in his Midtown Manhattan offices, where he still dabbles in a little day trading, a soft-spoken Steinhardt reflects on what made him tick. "I really enjoyed the intensity of the markets," explains the man who once famously declared he'd rather make three gains of 10 percent trading in and out of the market than a 30 percent long-term gain. "Somehow, in a business so ephemeral, the notion of going home each day, for as many days as possible, having made a profit -- that's what was so satisfying to me. I'd say to my people every morning, 'We are here today to make money.' From the sublime to the ridiculous, we were there to listen, to watch the ticker, to think, to talk to people, to explore whatever ways we could to make some money." John Lattanzio, Steinhardt's former chief trader, who worked alongside him for many years, summarises his boss's strength: "Michael made great bets." If betting came easily to Steinhardt while growing up in the lower-class Brooklyn neighborhood of Bensonhurst, he owed it to his father, Sol "Red" Steinhardt, a problem gambler who squandered rent money betting on horses and dice games. Divorced from Michael's mother a year after the boy was born in 1940, Sol often disappeared for months at a time. In Steinhardt's 2001 autobiography, No Bull, he writes: "My childhood may not have been ideal, but I did not realize its flaws most of the time. The credit for that goes to my mother." At Steinhardt's bar mitzvah, his father surprised him with a gift of 100 shares of Penn Dixie Cement and 100 shares of Columbia Gas System. A lifelong fascination with stocks had begun. As a teenager, while other kids were out playing stickball, Steinhardt was reading stock charts and hanging around the old Merrill Lynch offices in Grand Central Terminal, enthralled by the ticker tape and cigar-chomping brokers. Steinhardt blew through high school, graduating early at age 16; he then blew through the Wharton School at the University of Pennsylvania, finishing in three years. In 1960, just 19 years old, Steinhardt began his career on Wall Street as a research assistant at mutual-fund company Calvin Bullock. He later found an analyst position at Loeb Rhoades & Co. (a brokerage long since swallowed up by what is now the Citigroup empire), first covering cyclicals, then conglomerate stocks. One of Steinhardt's best picks, Gulf+Western, exploded, taking with it his new reputation as a top merger analyst. Steinhardt enjoyed securities research and never imagined his future would lie in trading. "The guys who sat on trading desks when I got started were considered lower-status in the investment world, which in some sense created opportunities," he says. On July 10, 1967, Steinhardt, along with two other rising stars in the industry -- Howard Berkowitz, an analyst at A.G. Becker, and Jerrold Fine, a researcher/portfolio manager at Dominick & Dominick -- launched Steinhardt, Fine, Berkowitz & Co. in Manhattan with about $8 million in start-up capital. (A £1,000 investment made on the first day would have grown to more than 100 times that by the start of the '90s.) As an analyst, Steinhardt always maintained a keen interest in the buying and selling process, investing in stocks for himself. "I always used fundamentals," he says. "But the fact is that often, the time frame of my investments was short-term." Steinhardt, despite an infamous temper, had natural people skills. One of the early secrets to his success came from recognising the value of sales traders who preferred the respectful treatment they received from Steinhardt to the disdain dispensed by most institutional portfolio managers of the early '70s. Though he and his two cofounders were all trained as analysts, it was Steinhardt who assumed the trading detail. "There was no real reason for that," he says. "Maybe because I was always more market-sensitive." Right out of the gate, Steinhardt bought skillfully, going long stocks in the last euphoric moments of the storied "Nifty 50" era, only to get out and use short-selling to capitalise on the grinding bear market of 1973â'74. His portfolio scored returns of 15 percent and 34 percent during those brutal years, when the S&P 500 returned a paltry 1 percent and declined 38 percent, respectively. "The notion at the time was that shorting was purely for hedging, so most funds were rarely, if ever, net short," he recalls. "I remember my partners and I having internal disputes about the purpose of shorting, whether we should seriously consider being net short. Well, it's fair to say that in '73â'74, we went substantially net short." At first, the fund suffered terribly, as Steinhardt's shorts -- such darlings of the day as Memorex, Polaroid and Eastman Kodak -- soared. "There is no greater pain that I know than when you're short stocks in an up market, when you know your potential losses are infinite," he says. But by his mid-thirties, Steinhardt was a millionaire, and he and his partners controlled $50 million -- no small amount for the time. His frenetic trading preferences and merciless leadership style produced an atmosphere of extreme pressure in which even the strong could be reduced to tears. For junior traders, that meant predawn arrivals, never leaving the office, zero water-cooler banter and constant scrutiny. Traders who ventured out for a bite during the afternoon often came back to discover that Steinhardt had liquidated their positions. "Yeah, he yelled a lot," Lattanzio recalls. "But so what? He was about making money, and if you weren't doing your job, he let you know it. His intensity made everybody better." By autumn 1979, both of his partners had left, and he renamed the firm Steinhardt Partners. In the spring of 1981, having never traded bonds, Steinhardt built a hugely leveraged position long 10-year Treasuries. He was managing $75 million. At the time, interest rates were spiking to unheard-of levels, eventually peaking in September 1981 at nearly 15 percent. Investors were sickened by the brazen bet -- two-thirds of the firm's capital, leveraged four times -- and Steinhardt couldn't blame them. "I knew as much about the yield curve as your pet dog at that point," he says, laughing. By that October, rates finally fell steadily. The price of bonds rose, and with them the portfolio, up 60 percent that month alone. It was up nearly 100 percent for the year. His $250 million bet ($200 million of it borrowed) made $40 million in the end. Fueled by the gratification of winning his wagers, Steinhardt always came ready to compete, a sort of player-coach, day in, day out, treating losing positions as nothing less than personal tragedies. Steinhardt loved to break balls on the Street. Among his favourite tricks: Right before close, he'd call a newbie broker and hurriedly mumble some garbled, official-sounding gibberish into the phone. Then he'd clearly say "Now buy me 1,000 shares before the close!" before hanging up. Invariably, the panicky broker, having no idea what to buy, would call back to clarify. Steinhardt would instruct his secretary to tell the poor guy that he had just stepped into the bathroom and would call back soon. As the seconds ticked down to the close, Steinhardt returned the call, feigning fury: "Why haven't you bought the fucking shares?" Cruel pranks aside, Steinhardt, despite a difficult stretch during the crash of 1987, finished the decade of greed with nearly $2 billion under management and a net worth of $200 million. Along the way, he helped groom dozens of traders, among them a former Goldman Sachs broker-in-training named Jim Cramer.
Yeah, MS was good. Great actually. But once again, the difference between legend and blowout is small IMHO. What if he was a bit too early on the short bets, or the treasuries? And his margin was called? How close was he to total wreckage? (But one brilliant move, was to GET OUT at a good point -a la Cramer? You can't hold off tremendous bad luck for long, if you are over-leveraged) Sure, legends are made from legendary "bets" and risk. But as always the "forces" of survivorship bias are in play... God luck to all.