Tuesday, November 24, 2015
I win a lot. About
Joined Nov 10, 2007
11,149 Blog Posts

Valeant Destroys ValueAct’s Year


Jeff Ubben and co are having their hats eaten for them by the purveyors of the Citron Research blog, as is William Albert Ackman, John Paulson, and many other big, powerful, and strong, hedge fund managers.

This must pain these men of leisure to no end. To succumb to the social pressures of a rabid short seller crowd, based upon the missives of a man with a last name that is the inverse of right, plagues them.

Activist investor ValueAct Capital said its fund fell 8.3 percent during the third quarter, wiping out its gains for the year, hurt by a plunge in shares of its main portfolio company, Valeant Pharmaceuticals International Inc.

For the nine months ending on Sept. 30, the ValueAct Capital Master Fund was down 0.9 percent, ValueAact said in a letter to investors which was seen by Reuters on Monday. As of the second quarter, the fund had been up 8 percent for the year.
ValueAct also said it is launching a new offering for investors that would lock up their money for five years. This new investment tranche will allow ValueAct to draw down capital over a period of three years rather than receive it up front.

“The fund performance in the third quarter was difficult and disappointing,” said the letter, dated Nov. 12, adding that ValueAct saw 10 percent or more share price declines in four of its largest core investments.

As of last filing, ValueAct owned a little more than 4% of Valeant. Due to the “fuck you, you’re dead” nature of the decline, VRX has completely fucked and ruined Valueact’s otherwise solid performance, ravaging the fund of its 8% return.



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Ninety Percent of Economists Agree: A Rate Hike is Coming


I know this is a long shit, being that the Fed is trying really hard to telegraph this move. But what if they don’t hike rates in December? The dollar is an 8 month high, commodities in the tank, stocks in the penalty box, and treasuries on pause.

“About 90 percent of economists expect the Fed to raise interest rates next month and based on Fed fund futures, investors have pretty much priced in the move, which is why we firmly believed that last week’s correction was technical and not fundamental,” wrote Kathy Lien, managing director of FX strategy for BK Asset Management.

Futures prices showed investors see nearly a 75 percent chance the Fed will hike rates next month, according to CME Group’s FedWatch.

Very simply: if the Fed surprised the markets by NOT hiking rates, it would produce the biggest Santa Claus rally you’ve ever seen. Treasuries would crater, stocks and commodites jump and the dollar would retreat. It would be the best pagan X-Mas ever.

A fly can dream, no?

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Human nature is to achieve triumph and want more. Some of us are greedy, lustful, baneful men. Surveying the StockTwits this evening, I can clearly see why the managers there make it a point to curate the community.

Financial people are the very lowest creatures on the planet, right next to attorneys and firemen.

Everyone has the next KBIO, pumping that shit out like the gluttons they are. Back in the old days, we’d have these fuckhead stock promotors come out to the firm and offer to buy us lunch, just to hear their sleezy sales pitch. Nowadays, all you need is a StockTwits account and the world is your oyster.







Beware of these greedy little fuckheads, ignorantly claimimg to know “the next KBIO.” They literally know nothing and are a danger to your net worth.

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Short Sellers Face Certain Death, with Grave Impunity


Market breadth checked in at 54% today. Market’s were essentially flat, perplexing the bearshitter class into a perplexed state of idiotic stupor. KBIO gapped higher by 116%, dispatching all of the gurus on Stocktwits who told you to sell it short on Friday.

The under current of the tape is bullish. I am constructive on this rally moving forward with vigor.

My holdings advanced by 0.6% today, bringing my gains up to 16.5%.

I am most enthused about my PAH position, which is now up from my basis. The way I’m thinking, Bill Ackman is a a craven lunatic at this juncture in time, down in the sewers of loss, off more than 20% for the year. He’s gonna try his hardest to redeem himself from the bottom quartile of hot shot hedge fund managers.

Pershing Square owns 20% of PAH.

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BEHOLD: The Turkey Gods


Mind your gullets dear lads, for revenge is a dish best served cold.

With National Festival right around the corner, and the country on the verge of debauchery, expect the market to climb. Minor setbacks are expected along this journey; but this is a trade that has rarely failed: feed off the hopes and dreams of an underclass as they make their way through the oversized doors at Walmart. Lean into their prayers and glean a little bit of information, enough to profit in the stocked market.

I will have you know, as people readily soil themselves after eating poisonous CMG, SHAK is grinching away their customers.

Very simply, I am very long and bold and determined to profit over the next two weeks, heading into National Shopping Week.

My top positions are COST, PAH, SHAK, CNC, AAPL and JAZZ.

As you were.

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Christmas Canceled For Putin: European Sanctions Remain


At a very minimum, the west should thank the benevolent Putin for miraculously finding 500 ISIS oil tankers to bomb. I am sure we’ve toiled away, tirelessly, trying to cut off their funds. In less than 1 month in the field, our enemies friends in Moscow have accomplished this miracle for us.

Even still, the west is unforgiving in Putin’s sins towards the Nazi loving Ukraine and will likely extend sanctions, further fucking themselves and Russia in the process.

European Union countries will probably extend Ukraine-related economic sanctions against Russia for another six months at the end of January despite improved cooperation in Syria, three European diplomats said.

Lack of progress in implementing this year’s Ukrainian peace accord means the trading bloc has no choice but to prolong the measures, diplomats from pro- and anti-sanctions nations said, speaking on condition of anonymity because the discussions are confidential. The EU’s 28 leaders are set to discuss the issue at a Dec. 17-18 summit, German Foreign Ministry chief spokesman Martin Schaefer told reporters in Berlin on Monday.

French President Francois Hollande will meet his Russian counterpart Vladimir Putin in Moscow on Thursday, two days after talks in Washington with U.S. President Barack Obama, with the goal of forging a united front against Islamic State. Russia has stepped up strikes on the militant group after blaming terrorists for downing a Russian civilian plane in Egypt last month and after the Nov. 13 Paris attacks promised to coordinate military action in Syria with France.

I mean, if the guy really wanted to be a dick he’d cut off the natural gas supply to Europe and tell them to bury their frozen dicks in the hot Syrian sand. Everyone deserves a second, sometimes 100th chance. Why not Vlad?

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HALT: M. Shkreli is Now Up $80 Million in $KBIO


Don’t worry, lads. It’s all paper gains, unless of course he worked out a collar by which he hedged his gains. But I doubt Martin is that diabolically genius. For now, his 2 million share position in KBIO will have to endure a true test that only a select few are able to pass: time.

He’s locked in for the next sixth month’s, unless he’ll need to forfeit the gains back to the company he’s trying to help. So, with about 70% of the float locked up by Martin and his friends, all Marty can do is acquire more shares under a different guise to effect a short squeeze. I think that’s precisely what is happening right now, with the stock at $40.

I told you to stop giving advice on this stock last week–because I knew this was possible. Within 6 months from now, the stock will likely be a fraction of where it is now. Nevertheless, with such a small float and chicanery afoot, don’t expect the bottom to drop out of this until Martin and his friends can affect maximum damage to those short.

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Goldman: Hedge Fund Hotels Suffer Worst Underperformance v S&P since 2008


We’ve all seen the horrendous price action in hedge fund favorites: SUNE, VRX, MNK, CNX and have maliciously paraded William Albert Ackman around these halls as the billionaire gone awry, clamoring for revenge in a world that is simply working against him.

Well, this morning, the billion dollar Goldman research wizards have confirmed what we already knew: hedge fund hotels are doing really, really bad.

You don’t say?

“The poor performance of favorite long positions has weighed on aggregate hedge fund returns, which entered negative territory during the market correction in August and have yet to recover,” Goldman said in the note


It’s a serious comeuppance, one that can have lasting effects on stocks prices, as these giant asset managers try to salvage their horrendously spiraling lower funds.

The worst since 2008. That’s quite a statement.

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The Downgrade Circus Begins: Wall Street Sours on Chipotle


In reaction to Friday’s CDC warnings that CMG’s problems with poisonous food is spreading, Wall St. is taking an ax to CMG’s price targets and ratings.

Thus far, three firms have downgraded them (Sterne, Maxim and BofA/Merrill), with BofA slashing its price target from $750 to $470.

In a research note out of Maxim, they like competitors in lieu of this fuckery.

In our view, the spread of E. coli to additional states is likely to amplify top-line uncertainty in the near term. The CDC reported that the E. coli outbreak that had closed 43 Chipotle restaurants earlier this month had expanded beyond the Pacific Northwest into four additional states. Health officials in both WA or OR still believe that produce was the likely source of contamination, though no one has found a specific ingredient. CMG tends to use local sourcing of produce wherever possible. However, in light of the broadening geographic scope of the outbreak, there is a possibility that produce may not be the cause. If this is the case, we would not rule out the possibility of finding of additional cases across the United States.

Although all Chipotle restaurants have reopened, we argue that headline risk is likely to depress traffic for an extended period. We argue that the outbreak now threatens to depress CMG’s traffic nationwide more profoundly for the next few quarters. We now expect that the outbreak could reduce comps by as much as 330 bps in 4Q15, 120 bps in 1Q16, and 40 bps in 2Q16. We model a +0.5% comp for 4Q15 but caution that, in a worst-case scenario, CMG could post its first negative quarterly comp since it was spun off from former parent McDonald’s (MCD – $113.91 – NR) in 2006. We believe that CMG is likely to lose market share in the near term to fast-casual peers, such as Qdoba [owned by Jack in the Box (JACK – $73.95 – NR)], Panera Bread (PNRA – $172.68 – Buy), and Zoe’s Kitchen (ZOES – $33.07 – Buy).

We believe that margins are likely to come under more pressure than we had modeled previously. Management has yet to address this directly, but in addition to heightened costs related directly to the outbreak at the affected locations, we believe that management likely will incur costs—at least in the near-term—to provide additional scrutiny of the company’s supply chain management. With the scope of the investigation expanding nationwide, we now expect elevated SG&A expenses in the next few quarters as we believe that the company will need to invest heavily to regain the trust of customers and get them to return.

We are reducing our price target to $585, from $718, to reflect heightened near-term uncertainty on the top line. Although we still regard CMG as a longer-term growth story capable of generating annualized EPS growth of at least 20%, we argue that it is prudent to assign cyclical low multiples until there is more top-line visibility. Our revised $585 price target on CMG is based on a forward P/E ratio target of 24x (reduced from our prior 28x multiple target and representing a cycle-low multiple), as well as our revised 2017E EPS estimate of $24.36. This price target also corresponds to a forward EV/EBITDA ratio of 12.4x using a 2017E base valuation year.

The Chipotle brand is undergoing a severe branding crisis. This is bound to benefit other casual food players, as the company tries to stop fucking poisoning its customers.

As a consumer of CMG, I’ve noticed a significant deterioration in the food quality and the people they hire, as well as store cleanliness. Its become a giant shitstorm and their managers need to fix it before irreversible damage is done.

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Good Morning: Oil is Getting Poleaxed


There are many reasons why oil is cruising lower this morning, down more than 3.3%, nearing the magical $40 per barrel handle. There was congratulatory news this morning, regarding Saudia Arabia supplanting Russia as the top oil supplier to China.

Congrats to the House of Saud, as you fist pump while enjoying the coriolis effect of flushing yourselves down the toilet.

Oil is lower. The dollar is higher, by 0.2%. And S&P futs are off by 0.15%.

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