Good news everyone. It appears the Algerian hostage “situation” has been “resolved.” All of the terrorists (15) are dead– as well as the hostages (35). But at least the natural gas facility has been returned to its rightful owners and law, plus order, has been restored. Perhaps the gents over in Algeria took a page out of the Waco, Texas playbook in learning how to properly deal with a hostage “scenario.”
Futures are sharply higher this fine, glorious, morning. On the bones of hercules himself, we’re all going to make lots of money today. Most of us will wear bowed ties and take our families out for “steak dinners” this evening, in order to properly celebrate today’s market wins. A small minority of you will sit at home watching Youtube videos, swearing to the almighty himself that the entire town of Newtown is one giant fiction, created by Hollywood to strip Texans of their pistols.
Some of you are very ill, indeud.
The Japanese yen is on the decline again, further validating my robust opinions that the Samurai nation of Japan is the single best developed stock market in the world right now. HMC and SNE are my top picks, alongside Yahoo Japan and NMR.
If everything is a conspiracy, then nothing is. Do you understand what that means? If we are told everything is a lie, then by default, the lie is also a lie and cannot be trusted. The internet has become a breeding ground for wild eyed conspiracy theories, researched using non-scientific methods by people more interested in becoming the next Alex Jones, than enlightening people of the dangers ahead.
Case in point, this video.
Take 30 minutes and watch it. You will find some of the information to be credible, which should raise serious questions as to the actual events that took place on in Sandyhook on Dec. 14th. But the guy who made the video went bazerko, claiming the whole scene was one giant hollywood set, filled with actors and props.
Pardon me for being so brazenly forthright–because I really want to use some fouled language right now– but the creator of that video is a jackass.
See, the government is a lot of things, but competent is not one of them. I do believe they’re corrupt and commit many heinous acts of violence to stay in power, as every government has done since the beginning of time. But I find it very hard to believe that whole towns can be part of some scheme to strip Americans of their 2nd amendment rights.
There comes a point when the conspiracy theory itself starts to sound like a conspiracy to hide what really happened. This is one of those occasions.
SWHC climbing to $9 today was good reason for me to punch holes through the sheet rock and throw dog urine on unsuspecting beggards. But the sale was forced, mainly, and there was nothing more for me to do about it. Lamenting over the past doesn’t help one forge a brighter future.
For example: I didn’t know that SeekingAlpha was going to release a criminally intent faux press release today, causing VHC to knife lower. Perhaps some of you did and I wish you all the best. It’s natural to fear for one’s position when it is knifing lower. Let me make this perfectly clear to all of you reading this here memo.
If a person has a sizable position in a stock, based upon his/her percentage of liquid assets, HE SHOULD BE WORRIED when his position is going lower. When the stock is riding high, HE SHOULD FEEL GOOD and seek to involuntarily punch strangers in the nose for living. That’s normal human behavior.
Now acting upon these emotions and merely displaying them are too separate things. My clients who forced me to sell SWHC near the lows acted upon their emotions and made a wrong decision. Am I going to rub it in their faces because they left six figures on the table?
Absolutely not.
They’ve earned the right to make mistakes because they’ve earned their investment capital. I may manage it for them–but the money is theirs.
Just yesterday, everyone piled into AAPL puts because the momentum looked dreadful. Yet today, it’s grandeur is almost too much to bear.
There will come a day when everything I am doing will make sense. Maybe I will make a killing in VHC, or perhaps I will sell it for a small gain. But there is a plan and I’m always looking for the next big play. I can’t control what SeekingAlpha, Herb Greenberg and others say about VHC; but I can control how I comport myself here, in these hallowed halls that you’ve grown to admire and respect. I do not trade in and out of VHC because it’s not that type of stock for me. Three days ago I was up 18% and it never occurred to me to sell even a single share.
The upside is too great to miss and I don’t want to pretend that it doesn’t matter.
I just spoke with Greg Wood from Virnetex and he said there weren’t any patents rejected, as stated in Seeking Alpha article. He said they are simply “reexaming” new patents with the ITC that are only 1 1/2 years old.
He said “this is standard procedure” and this news leak was nothing more than “scare tactics” by short sellers trying to profit. Also, he said, this in no way affects the current suit with AAPL and “everything is still on schedule.”
I am long overdue a major winner here. “The Fly” is built with the mortar of win. It’s been well documented of my December set-backs, which has caused a certain subset of the readership class to revolt with words of disdain.
Over the years, I’ve managed through these valleys and always come out on the other end victorious. I never came out “garden variety” okay, but million soldier march blowing trumpets, pillaging villages and killing the local cattle victorious. Salt your lands and leave you with seeds.
I regret selling PPC the most because it was a no brainer trade for Q1 2013. I won’t make that mistake again.
I bought into GS because I loved the numbers. I think the stock will hit $165 by May.
I need a big winner here, more than pedestrian 10% swings. I need another +80%er like my NAK trade. I’m just thinking out loud here, as I have nothing to hide, never have, never will–sans my identity.
Perhaps VHC will be that win or maybe SNE or HMC? More often than not, it’s the spontaneous trade that ends up being my biggest winners.
Until then, “The Fly” sits here, clad in a shemagh, laughing hysterically, sipping sand from a champagne flute.
Goldman Sachs beats by $1.96, beats on revs (135.59 )
Reports Q4 (Dec) earnings of $5.60 per share, $1.96 better than the Capital IQ Consensus Estimate of $3.64; revenues rose 52.7% year/year to $9.24 bln vs the $7.67 bln consensus.
IB Unit Fourth Quarter Net revenues in Investment Banking were $1.41 billion for the fourth quarter of 2012, 64% higher than the fourth quarter of 2011 and 21% higher than the third quarter of 2012. Net revenues in Financial Advisory were $508 million, 8% higher than the fourth quarter of 2011, primarily reflecting an increase in industry-wide completed mergers and acquisitions. Net revenues in the firm’s Underwriting business were $897 million, more than double the amount in the fourth quarter of 2011. Net revenues in both debt underwriting and equity underwriting were significantly higher compared with the fourth quarter of 2011, primarily reflecting an increase in industry-wide activity.
Return on average common shareholders’ equity (ROE) was 10.7% for 2012.
ICS Unit Fourth Quarter Net revenues in Institutional Client Services were $4.34 billion for the fourth quarter of 2012, 42% higher than the fourth quarter of 2011 and 4% higher than the third quarter of 2012. Net revenues in Fixed Income, Currency and Commodities Client Execution were $2.04 billion for the fourth quarter of 2012, 50% higher than the fourth quarter of 2011, reflecting significantly higher net revenues in credit products and mortgages compared with difficult market-making conditions during the fourth quarter of 2011, and higher net revenues in currencies. These increases were partially offset by significantly lower net revenues in commodities and lower net revenues in interest rate products.
During the fourth quarter of 2012, Fixed Income, Currency and Commodities Client Execution operated in an environment characterized by generally tighter credit spreads and improved activity levels in credit products and mortgages compared with the fourth quarter of 2011. Net revenues in Equities were $2.30 billion for the fourth quarter of 2012, 36% higher than the fourth quarter of 2011, reflecting significantly higher net revenues in securities services and equities client execution. The increase in securities services net revenues compared with the fourth quarter of 2011 reflected a gain of approximately $500 million on the sale of the firm’s hedge fund administration business. The increase in equities client execution net revenues compared with the fourth quarter of 2011 reflected significantly higher net revenues in derivatives and higher net revenues in reinsurance. These increases were partially offset by lower commissions and fees, reflecting lower market volumes. During the quarter, Equities operated in an environment generally characterized by low volatility levels and an increase in equity prices in Asia and Europe.
Capital Book value per common share increased approximately 11% to $144.67 and tangible book value per common share increased approximately 12% to $134.06 compared with the end of 2011. The firm’s global core excess liquidity was $175 billion as of December 31, 2012. In addition, the firm’s Tier 1 capital ratio under Basel 1 was 16.7% (5) and the firm’s Tier 1 common ratio under Basel 1 was 14.5% (5) as of December 31, 2012.
Expenses Compensation and Benefits Compensation and benefits expenses (including salaries, discretionary compensation, amortization of equity awards and other items such as benefits) were $12.94 billion for 2012, 6% higher than 2011. The ratio of compensation and benefits to net revenues for 2012 was 37.9% compared with 42.4% for 2011. Total staff (11) decreased 3% compared with the end of 2011.
Non- Compensation Expense: Fourth Quarter Non-compensation expenses were $2.95 billion for the fourth quarter of 2012, 14% higher than the fourth quarter of 2011 and 24% higher than the third quarter of 2012. The increase compared with the fourth quarter of 2011 was due to higher other expenses. The increase in other expenses primarily reflected higher net provisions for litigation and regulatory proceedings and higher charitable contributions.
It’s important to note their book value increased by 11% to $144. Back in the good old days of the banking renaissance, IB’s like Goldman would trade anywhere between 3-4x book. Only the most obscure regional banks would trade below 1x book. I’ll do the math for you, small chap. If we were back in the hayday of 2006, GS would be trading north of $500. At $135, it looks like a steal.
When Bill Ackman announced his short position in HLF, I was shocked that he revealed so much about his position size. It’s as if he believed he was infallible, above the market, and immune to ruin. Those who remember the great squeezes of the dot com era, or even obscure, but legendary, squeezes like Resorts International, know that to reveal your position size is equal to challenging your competitors to break you.
During more traditional times, hedge fund managers would do everything they could to keep their short positions secret. However, thanks to the manipulative successes of internet newsletters and media whoring sociopath fund managers, it’s become common practice for short sellers to disclose their positions and reasons why their targeted companies are going to zero. It has become a carnivale, fitting for the clowns on CNBC to perpetuate into a soap opera genre, marketed to fools wishing to depart from their money.
Bill “Mars Attacks” Ackman has about $11 billion under management and is short 26 million shares of HLF, making it a billion dollar position and a very public spectacle. The stock did drop when his report was issued; but has since rebounded following the rapid capitulation of the suckers, late comers– like Whitney Tilson–who piled in late. Shortly thereafter, Daniel Loeb from Third Point announced a large stake in HLF, pushing the stock up further. Since then, the stock has taken on the characteristics of undergoing an epic short squeeze, one that is hell-bent on ruining Bill Ackman–punishing him for exhibiting the most extreme display of hubris, stupidity and greed, since the fictional movie Wall Street–starring Gordon Gekko.
If HLF manages to smash earnings expectations this quarter, I suspect Mr. Ackman is going to find his existence to be a very lonely one, as all of his sheep flee the herd.
For every point up, Pershing Square is losing an astonishing $26 million dollars (that’s about $500 million since the lows of last month!). Herbalife might be a crappy company; but they’ve been ripping off suckers for a long, long time. I don’t think they’re anywhere close to going to zero, like Ackman predicts. He is in a lose-lose position here, only because he went public with an absurd and utterly ridiculous 300 page hit piece on HLF, hosted live in NYC, and launched a website–which is dedicated to the sole purpose of seeing the destruction of HLF. For reasons unbeknownst to me, he has tethered his reputation with the outcome of a shoddy multi-level marketing company, one that has managed to lure in suckers for over 30 years. Perhaps he got bored.
If he covers HLF before it goes to zero, his credibility will be badly tarnished and will be viewed as “the boy who cried wolf” from now on. If it goes to zero, he will be lauded and praised as the best investor of all-time. CNBC will make a bronze statue out of his likeness and place it on top of the iconic Wall Street bull. The only question is: How long can Mr. Ackman afford to lose $26 million per point before he succumbs to market forces? After all, it’s 10% of his holdings, not exactly a small stake.
What if the CEO of HLF starts issuing special divvies just to squeeze Ackman?
What if a consortium of hedge funds collude to make a run on Pershing Square by bidding up HLF to obscene levels ($150+), while shorting his weak longs–like FDO and JCP?
It can happen because it has happened before.
Mr. Ackman now finds himself in the untenable position of having his franks and beans placed firmly inside of a quickly moving Herbalife zipper.
Tomorrow, as citizens of this great nation, we will be treated to an “executive delight.” Our leader, Barack Obama, will take the initial steps to protect this expansive, peace-loving, nation against itself, in front of children who pleaded with him over the Newtown massacre to ban pistols. By executive decree, aka “law”, our leader will bless us with a series of new regulations and laws whose goal is to limit and eventually eliminate the private ownership of guns in America.
God bless the Lord!
Do not worry about burglars sneaking into your home for a late night rape, for the policemen of this country will still be armed. If you live in NYC, you are fully aware of the police presence, as they stroll about, gallantly, in their uniforms armed for war. There’s hardly any crime in NYC and most who receive acts of barbarity had it coming, in one way or another. Truth be told, may Jesus strike you with his cannon.
The authors of the constitution, small chaps, only wanted its citizens to carry muskets and explode bullets in their faces during backfires. Our founding fathers, or might I say “great, great, great grandfathers”, never intended to put the sword in the hands of its citizens to serve as a militia against a tyrannical government. Had they known about first shooter video games and violent cinema, they would have banned muskets the second someone used one on another human being!
With all of this happening, such joyous occasions of fantastical precedence, I am barely able to contain myself in my outer-garments.
The law of the land shall reign for another 20,000 years and its citizens will be grateful for it.
NOTE: If you’re holding SWHC/RGR, prepare for extreme volatility.
This for the bozos out there who pray at the altar of technical analysis.
The following stocks, provided by The PPT, have just broken the 20 day moving average, heavily burdened by short sellers and have superb technical scores. Naturally, this data changes all the time. This is merely a snap shot in time.
