Dear MCM Friends,
First, let me thank you for taking the time out to read what I've had to say for the last 10 weeks. After almost 10 years on Wall Street, spending 10 weeks by myself, hammering out my sometimes nonsensical prose, had its moments of doubt! Your constructive feedback kept me going however, and for that I will be forever grateful.
In hindsight, it helps that we ended up on the right side of a major US stock market move, but making a short term "call" on the market is not a basis for a long term business model. Refining and improving my already proven investment process, however, is.
This week's US Market Performance:
Dow (1.51%); S&P500 (0.75%); Nasdaq (2.58%); Russell 2000 (2.35%)
For January 2008 to date:
Dow (4.96%); S&P500 (4.59%); Nasdaq (8.01%); Russell 2000 (8.01%)
The most important takeaway from my time away from the madness of the hedge fund industry's crowds is the confirmation in my gut of the fundamental belief that understanding company and economic cycles are processes, not points. Patience is required, and consensus building is not. Many Hedge Fund managers attempt to build businesses around who made the last "great call." Few understand how repeatable the investment process was behind that "call". As a result, they are often managing their businesses reactively, rather than proactively.
At this stage of my life, if my #1 ambition was to be compensated, I'd already have accepted one of the many generous hedge fund jobs that have been put on the table. Instead, I've decided to hang my hat on the convictions born out of my investment process - they beat any Wall Street offer you can give me.
To say that the game of levered long investing is coming to an end would be an understatement. With that new reality come tremendous market opportunities for those with entrepreneurial ideas that are creatively destructive.
I've decided to take this idea to the next level and invest my time and capital into building a real business. I intend to compete with mostly everything that's considered "acceptable investment advice" by current market participants. For the next 6-8 weeks, I'll be shifting into my top gear. I have my new team in place, and we're ready to grind.
Unfortunately, that means my focus will be moving to the operational side, and I won't be able to provide you with the same level of diligence that stands behind the convictions I've been willing to be held accountable for via MCM Trades, Trends, Themes, or Trades.
But, I'll be back!
Best of luck out there, and thanks again.
Keith McCullough
Saturday, January 12, 2008
Thursday, January 10, 2008
MCM Macro Intraday Fed Comment, 1/10/08... 'Ooolah-lah'
So Ben Bernanke is concerned and "prepared to act in a decisive and timely manner"... Ooolah-lah, isnt that a shocking revelation!
The Fed Funds Futures opened this morning with 76% odds that he not only cuts at the January meeting, but cuts by 50 basis points. The odds of Bernanke not cutting stand at zero %.
Where i was raised, when my Dad gave me zero odds - zero meant zero. And i'm not entirely sure why anyone considers anything that Bernanke is revealing today as anything other than historical reflections on what we should all consider reality by now.
I'm not entirely sure why CNBC had a "Bernanke Count Down" clock at the bottom of their screen today either. This is a $14 Trillion economy, not a Bowl Game.
History will not look back kindly on this Fed Centric Mania. In the moment, it is too emotionally charged to fundamentally respect.
Be careful chasing rallies. The CPI and PPI inflation reports loom next week, and Bernanke's academic integrity will be hostage to those releases.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
The Fed Funds Futures opened this morning with 76% odds that he not only cuts at the January meeting, but cuts by 50 basis points. The odds of Bernanke not cutting stand at zero %.
Where i was raised, when my Dad gave me zero odds - zero meant zero. And i'm not entirely sure why anyone considers anything that Bernanke is revealing today as anything other than historical reflections on what we should all consider reality by now.
I'm not entirely sure why CNBC had a "Bernanke Count Down" clock at the bottom of their screen today either. This is a $14 Trillion economy, not a Bowl Game.
History will not look back kindly on this Fed Centric Mania. In the moment, it is too emotionally charged to fundamentally respect.
Be careful chasing rallies. The CPI and PPI inflation reports loom next week, and Bernanke's academic integrity will be hostage to those releases.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Macro BonTon (BONT) update, 1/10/08... 'Bankruptcy Odds Increasing'
The company is effectively reporting that they did not have a Christmas. When your business model is to incur retail sales, thats bad, and generally just not good for investor morale.
Same store sales were down over -11%, with the BonTon stores themselves down -14.2%.
The company's prior "guidance" was to earn $1.50-1.80/share. Now they're revising that to $.50-.$80/share. This explains, partly, why the stock was down over -20% at one point intraday yesterday, as this news had to have leaked into the halls of the hedge fund community.
When "comping" down double digit sales declines, a levered retailer's income statement has comparable de-leverage characteristics to an Airline company. Generally, investors dont respect that fact, until they have to.
The beginning of another US Retail Bankruptcy cycle is under way. Buy WalMart, and short the rest.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Same store sales were down over -11%, with the BonTon stores themselves down -14.2%.
The company's prior "guidance" was to earn $1.50-1.80/share. Now they're revising that to $.50-.$80/share. This explains, partly, why the stock was down over -20% at one point intraday yesterday, as this news had to have leaked into the halls of the hedge fund community.
When "comping" down double digit sales declines, a levered retailer's income statement has comparable de-leverage characteristics to an Airline company. Generally, investors dont respect that fact, until they have to.
The beginning of another US Retail Bankruptcy cycle is under way. Buy WalMart, and short the rest.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Wednesday, January 9, 2008
MCM Macro Intraday Trades 1/9/08... 'Just Shorts'
Stocks Discussed: EWS, TM, and TCO...
MCM Trades/Fades
1. Shorting Singapore's ETF (EWS) into the close, $13.40... MCM Trend moving to negative on Singapore. Note to follow...
2. Shorting Toyota (TM) into the close, $105.20... Note to follow.
3. Re-Shorting Taubman Centers (TCO) into the close $$45.11... same thesis; stock is up +2.5% today, giving us another great entry point.
KM
___________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07'
Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07''US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'
'Long Term Macro Cycle tops are processes, not points' -Jan08'
___________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Trades/Fades
1. Shorting Singapore's ETF (EWS) into the close, $13.40... MCM Trend moving to negative on Singapore. Note to follow...
2. Shorting Toyota (TM) into the close, $105.20... Note to follow.
3. Re-Shorting Taubman Centers (TCO) into the close $$45.11... same thesis; stock is up +2.5% today, giving us another great entry point.
KM
___________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07'
Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07''US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'
'Long Term Macro Cycle tops are processes, not points' -Jan08'
___________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
how does stopping the price increase slow anything? does this make sense to you?
_________________
Using history as my guide in answering your question, the answer is ultimately no - price controls do not slow anything; rather, they have a propensity to compound the problem. This is a form of socialism/communism, not capitalism.
Economic History buffs will remember that when Nixon appointed Arthur Burns Fed Chairman in 1970, wage and price controls had seeped into the political dialogue... i think it was simply the populist answer to stagflation. And there are plenty of analogies to be made to where the political dialogue is moving here in 2008.
In the fall of 1971, Nixon moved ahead, making what he would later reflect on as his worst policy decision of his presidency (apart from Watergate), and implemented price controls...
By 1974, the US was staring at an +11% inflation rate, raging unemployment prospects, and the worst recession since the 30's.
This morning, Oil is testing $100/barrel, Gold $900/oz, and corn $5/bushel.
Sherlock Holmes would nail this one:
"There is nothing more deceptive, than an obvious fact"
Keith
_________________
Using history as my guide in answering your question, the answer is ultimately no - price controls do not slow anything; rather, they have a propensity to compound the problem. This is a form of socialism/communism, not capitalism.
Economic History buffs will remember that when Nixon appointed Arthur Burns Fed Chairman in 1970, wage and price controls had seeped into the political dialogue... i think it was simply the populist answer to stagflation. And there are plenty of analogies to be made to where the political dialogue is moving here in 2008.
In the fall of 1971, Nixon moved ahead, making what he would later reflect on as his worst policy decision of his presidency (apart from Watergate), and implemented price controls...
By 1974, the US was staring at an +11% inflation rate, raging unemployment prospects, and the worst recession since the 30's.
This morning, Oil is testing $100/barrel, Gold $900/oz, and corn $5/bushel.
Sherlock Holmes would nail this one:
"There is nothing more deceptive, than an obvious fact"
Keith
Inflation continues to accelerate, and China's answer = Price Controls?
China to Cap Energy, Utility Prices to Cool Inflation
By Li Yanping
Jan. 9 (Bloomberg) -- China will freeze price increases of oil products, natural gas and electricity in the ``near term,'' Premier Wen Jiabao said, as the government tries to curb inflation at an 11-year high.
The government will cap costs of daily goods when necessary, stop increases of fees for public transportation and school tuition and step up a crackdown on price manipulation, Wen said at a State Council meeting today, according to a statement posted on the government's Web site.
``Prices of crude oil, grains and other primary products are still rising on the international market, and China faces relatively large pressures of further price increases,'' Wen said, without specifying how long the controls will last.
Inflation in the world's fastest-growing major economy surged to 6.9 percent in November, the fastest since 1996, and was named by policy makers as one of the two major economic risks for 2008, along with overheating. The central bank pledged a ``tight'' monetary policy this year after six interest-rate increases in 2007 failed to rein in price surges.
``China is facing greater risks of import-induced inflation in 2008 even after factors attributed to last year's price rise, such as pork and grain shortages, dissipate,'' said Zhu Baoliang, chief economist at the State Information Center in Beijing. Crude oil topped $100 a barrel for the first time last week.
By Li Yanping
Jan. 9 (Bloomberg) -- China will freeze price increases of oil products, natural gas and electricity in the ``near term,'' Premier Wen Jiabao said, as the government tries to curb inflation at an 11-year high.
The government will cap costs of daily goods when necessary, stop increases of fees for public transportation and school tuition and step up a crackdown on price manipulation, Wen said at a State Council meeting today, according to a statement posted on the government's Web site.
``Prices of crude oil, grains and other primary products are still rising on the international market, and China faces relatively large pressures of further price increases,'' Wen said, without specifying how long the controls will last.
Inflation in the world's fastest-growing major economy surged to 6.9 percent in November, the fastest since 1996, and was named by policy makers as one of the two major economic risks for 2008, along with overheating. The central bank pledged a ``tight'' monetary policy this year after six interest-rate increases in 2007 failed to rein in price surges.
``China is facing greater risks of import-induced inflation in 2008 even after factors attributed to last year's price rise, such as pork and grain shortages, dissipate,'' said Zhu Baoliang, chief economist at the State Information Center in Beijing. Crude oil topped $100 a barrel for the first time last week.
Tuesday, January 8, 2008
MCM Macro Intraday Trades, 1/8/08... 'Just Stocks'
Stocks Discussed: HNZ, SONC, WMT, AXP, and CL...
Keep trading aggressively, and from a position of mental strength - this market doesnt look like it owes anyone anything.
MCM Trades/Fades
1. shorted Heinz (HNZ) yesterday, $46.18...
-Similar to the recent short calls I've made on McDonald's (MCD) and Nike (NKE), Heinz (HNZ) is a company that I've followed very closely since we bought it in 2003 (in the low $30's). At that time, everyone hated it, and it was the cheapest big cap global food asset you could buy
-Fast forward 5 years and now we have an overowned and overvalued stock ($14.7B in mkt cap, $19.4B EV, and trading at 11x LTM cash flow) on what look to be peaking sales growth numbers, that has found the sell side's love (2 Strong Buys, 4 Buys, No sells).
-Yes, their performance has been great since Nelson Peltz's Trian Fund took their 6% stake, but unfortunately all great runs eventually come to an end.
-HNZ's recently reported FYQ2 was stellar; printing 13% sales growth and beating the Street's earnings estimate by 4 cents ... the devil is in the details however, and that's that 3 of the 4 cents in their beat came from a shockingly low tax rate, 5 of the 13% sales growth came from currency, and gross margins were down 100bps y/y.
-So what's changed since the quarter? A) the US$ bottomed and B) commodities have risen.
-Why Now? - The timing here is critical to appreciate as last year around this time HNZ's ornery CEO Bill Johnson had a Nelson Peltz fire hose chasing him down into his board room. As you remember, this is when Wall Street's fascination with "Activism" was at an all time high, and Trian had recently filed their ownership. Suffice it to say, Johnson was going to print the biggest "I told you I'm not the problem here" numbers possible into his FY end board meeting - and he did. In hedge fund speak, we call this a tough year over year comparison, one that the company will finally have to report against.
-The Bulls will say three things 1) Consumer Staple safety stock, 2) Peltz, and 3) a play on the "its Global this time" narrative.
-The MCM bear says 1) Consumer Staple stocks are sensitive to the economic cycle slowing (pull up all of the charts from 2002), 2) Peltz owns 6%, and should book the gain before his Mutual Fund Followers flinch (Cap Re owns almost 14%!, State Street is close to 6%), and 3) yes 54% of HNZ sales come from outside the US, but only 13% come from where the juice is (Emerging Markets). If you go back in the HNZ income statement to the years that I owned it, the only reason I was able to buy it on the cheap was because the UK "blew up", and as good as Trian's research is, they are not going to trump the economic slowdown that's underway in Europe right now.
-On HNZ's last conference call Johnson guided to what has to be the all time peak for this enterprise in terms of sales growth at 9-10% for this FY. As our friend Shakespeare said: "Expectations are the root of all heartache."
-Short interest is only 1.6% of the float, so we already know few people agree with us.
2. shorted Sonic Corp (SONC) yesterday, $21.99...
-Straightforward MCM Momentum Modeling short with considerable earnings risk to consensus estimates.
-SONC is one of the most expensive stocks in a group (US Restaurants) that gets cheaper by the day. This valuation is a massive liability for the mutual fund community who continues to support the stock (mkt cap $1.3B, EV $2.1B; trading at 11x LMT cash flow).
-The opportunity presented itself in the last few days as the stock was getting squeezed higher in the face of what was an ostensibly positive surprise in the company's earnings reports ( i.e. they didn't guide down). With almost 13% of the float held short by hedge funds who have the patience of puppies, it pays to pick your trading spots in this name.
- The company just closed up another successful fiscal year, and the good news for us is that their fiscal year ended in August. Thus, their full year guidance is based on a US Consumer spending environment that has changed, and they'll be lapping very difficult margin comparisons with limited room for a sales miss.
-For this upcoming quarter, the sell side has their operating margins modeled flat y/y, and that's an aggressive assumption that has been driven by management's outlook, not inflationary reality.
-To top it off, insiders have been selling, but that will be nothing compared to the tidal wave of selling to come if you see Fidelity or T.Rowe find reason to flinch (they own 13.7% and 7.6% of the stock respectively).
3. sold another 1/3 of my WalMart (WMT) into todays strength, $46.98... nothing fundamental or company related; more a market call than anything else. I downgraded the MCM Trade on the market to negative, and wanted to reduce gross long exposure.
4. covering all of my American Express (AXP) here into the close, $48.21... gains on the short side are meant to be taken, and this stock is miserably under performing the US market today, trading down another - 2.5%. Short thesis remains; re-short it on up days.
5. shorted Colgate (CL) today, $81.48... Note to follow...
Thanks for the continued support,
KM
_________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03 , cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22 ) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83 ) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49 ) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
SHLD (short 106.09, cover 97.79) = +7.8%
AXP (short 52.65, cover 48.21) = +8.4%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Keep trading aggressively, and from a position of mental strength - this market doesnt look like it owes anyone anything.
MCM Trades/Fades
1. shorted Heinz (HNZ) yesterday, $46.18...
-Similar to the recent short calls I've made on McDonald's (MCD) and Nike (NKE), Heinz (HNZ) is a company that I've followed very closely since we bought it in 2003 (in the low $30's). At that time, everyone hated it, and it was the cheapest big cap global food asset you could buy
-Fast forward 5 years and now we have an overowned and overvalued stock ($14.7B in mkt cap, $19.4B EV, and trading at 11x LTM cash flow) on what look to be peaking sales growth numbers, that has found the sell side's love (2 Strong Buys, 4 Buys, No sells).
-Yes, their performance has been great since Nelson Peltz's Trian Fund took their 6% stake, but unfortunately all great runs eventually come to an end.
-HNZ's recently reported FYQ2 was stellar; printing 13% sales growth and beating the Street's earnings estimate by 4 cents ... the devil is in the details however, and that's that 3 of the 4 cents in their beat came from a shockingly low tax rate, 5 of the 13% sales growth came from currency, and gross margins were down 100bps y/y.
-So what's changed since the quarter? A) the US$ bottomed and B) commodities have risen.
-Why Now? - The timing here is critical to appreciate as last year around this time HNZ's ornery CEO Bill Johnson had a Nelson Peltz fire hose chasing him down into his board room. As you remember, this is when Wall Street's fascination with "Activism" was at an all time high, and Trian had recently filed their ownership. Suffice it to say, Johnson was going to print the biggest "I told you I'm not the problem here" numbers possible into his FY end board meeting - and he did. In hedge fund speak, we call this a tough year over year comparison, one that the company will finally have to report against.
-The Bulls will say three things 1) Consumer Staple safety stock, 2) Peltz, and 3) a play on the "its Global this time" narrative.
-The MCM bear says 1) Consumer Staple stocks are sensitive to the economic cycle slowing (pull up all of the charts from 2002), 2) Peltz owns 6%, and should book the gain before his Mutual Fund Followers flinch (Cap Re owns almost 14%!, State Street is close to 6%), and 3) yes 54% of HNZ sales come from outside the US, but only 13% come from where the juice is (Emerging Markets). If you go back in the HNZ income statement to the years that I owned it, the only reason I was able to buy it on the cheap was because the UK "blew up", and as good as Trian's research is, they are not going to trump the economic slowdown that's underway in Europe right now.
-On HNZ's last conference call Johnson guided to what has to be the all time peak for this enterprise in terms of sales growth at 9-10% for this FY. As our friend Shakespeare said: "Expectations are the root of all heartache."
-Short interest is only 1.6% of the float, so we already know few people agree with us.
2. shorted Sonic Corp (SONC) yesterday, $21.99...
-Straightforward MCM Momentum Modeling short with considerable earnings risk to consensus estimates.
-SONC is one of the most expensive stocks in a group (US Restaurants) that gets cheaper by the day. This valuation is a massive liability for the mutual fund community who continues to support the stock (mkt cap $1.3B, EV $2.1B; trading at 11x LMT cash flow).
-The opportunity presented itself in the last few days as the stock was getting squeezed higher in the face of what was an ostensibly positive surprise in the company's earnings reports ( i.e. they didn't guide down). With almost 13% of the float held short by hedge funds who have the patience of puppies, it pays to pick your trading spots in this name.
- The company just closed up another successful fiscal year, and the good news for us is that their fiscal year ended in August. Thus, their full year guidance is based on a US Consumer spending environment that has changed, and they'll be lapping very difficult margin comparisons with limited room for a sales miss.
-For this upcoming quarter, the sell side has their operating margins modeled flat y/y, and that's an aggressive assumption that has been driven by management's outlook, not inflationary reality.
-To top it off, insiders have been selling, but that will be nothing compared to the tidal wave of selling to come if you see Fidelity or T.Rowe find reason to flinch (they own 13.7% and 7.6% of the stock respectively).
3. sold another 1/3 of my WalMart (WMT) into todays strength, $46.98... nothing fundamental or company related; more a market call than anything else. I downgraded the MCM Trade on the market to negative, and wanted to reduce gross long exposure.
4. covering all of my American Express (AXP) here into the close, $48.21... gains on the short side are meant to be taken, and this stock is miserably under performing the US market today, trading down another - 2.5%. Short thesis remains; re-short it on up days.
5. shorted Colgate (CL) today, $81.48... Note to follow...
Thanks for the continued support,
KM
_________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03 , cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22 ) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83 ) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49 ) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
SHLD (short 106.09, cover 97.79) = +7.8%
AXP (short 52.65, cover 48.21) = +8.4%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Macro Intraday Market Call, 1/8/08... 'Downgrading the MCM Trade to Negative, again'
Being "Bullish" for a two day +1.5% market move off the lows is all i care to hang around for...
Whether you've been selling since the market hit its intraday high of SP500 1430 earlier this morning, or selling now... i think you are 'doing the right thing'. The US political primary results this evening are another negative MCM Macro catalyst.
You know who is not 'doing the right thing' - Hillary Clinton. There's no crying in a US Presidential race Hillary, c'mon!
Hillary was literally welling up in tears in New Hampshire last night, saying something along the lines of "you know... this isnt just about politics for me... you know"...
The Levered Long Hedge Funds will probably be sniffling too (and making relative performance excuses to their fund of fund clients) if they chased any of the mini rallies we've seen in the S&P 500 Futures in the last 48 hours of trading.
On Sunday, someone smarter than me told me i was getting "too cute" being long the US market "for a short term trade". At the end of the day, i actually agreed with him. But you can be cute, and not have to cry for votes. We're going to earn our market points the old fashioned way here - grinding it out.
If the early polls prove to be an accurate barometer for tonights outcome, Barak Obama's political momentum will continue accelerate. Alongside that, expectations for the US Stock Market in 2008 should inevitably follow the opposite path of where he wants to take the US Consumer's taxes.
The MCM Trend (intermediate) remains negative, and now i can sleep more soundly with my MCM Trade (immediate) negative, back in its bears den.
Best,
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Whether you've been selling since the market hit its intraday high of SP500 1430 earlier this morning, or selling now... i think you are 'doing the right thing'. The US political primary results this evening are another negative MCM Macro catalyst.
You know who is not 'doing the right thing' - Hillary Clinton. There's no crying in a US Presidential race Hillary, c'mon!
Hillary was literally welling up in tears in New Hampshire last night, saying something along the lines of "you know... this isnt just about politics for me... you know"...
The Levered Long Hedge Funds will probably be sniffling too (and making relative performance excuses to their fund of fund clients) if they chased any of the mini rallies we've seen in the S&P 500 Futures in the last 48 hours of trading.
On Sunday, someone smarter than me told me i was getting "too cute" being long the US market "for a short term trade". At the end of the day, i actually agreed with him. But you can be cute, and not have to cry for votes. We're going to earn our market points the old fashioned way here - grinding it out.
If the early polls prove to be an accurate barometer for tonights outcome, Barak Obama's political momentum will continue accelerate. Alongside that, expectations for the US Stock Market in 2008 should inevitably follow the opposite path of where he wants to take the US Consumer's taxes.
The MCM Trend (intermediate) remains negative, and now i can sleep more soundly with my MCM Trade (immediate) negative, back in its bears den.
Best,
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Monday, January 7, 2008
MCM Macro Intraday Trades 1/7/08... 'Just Stocks'
Stocks Discussed: GPS, SHLD, BONT, GIS, HNZ, and SONC...
The MCM Trade is up, and MCM Trend is down... my favorite kind of tape to fade. Selling green, buying red (kind of like Thunder Bay snowmobiling traffic light rules!). The trading wind is whippy out there - keep moving to stay warm.
MCM Trades/Fades
1. sold another 1/3 of The Gap (GPS) this afternoon, into strength, $20.18... MCM Value Thesis remains, but its overowned by some of the wrong people in the hedge fund community right now - apparently the chart started catching people's attention as it was climbing steadily ahead of Christmas. I want to have some dry powder to buy more next time this market cracks, and these momentum long traders bail - this is not a momentum stock and they have no business being exposed to what is a long duration value turnaround investment; we need to wash them out of our system, and buy it back lower.
2. covered all my Sears Holdings (SHLD) this morning, when it cracked, $97.79... I've had my fair share of anti-consensus short ideas in my career, but i have never had so many people tell me i am wrong shorting a stock as i have in the last 9 months in this one. Now that its down from $193/share (its Aprl 2007 nonsensical highs), E-Trade wont even give me a borrow to short it anymore! As the hedge fund crowd rolls in to short it down here, i'm rolling out. Dont expect to see Cramer write the letters S-H-L-D on his knuckles anymore either - that was embarrassing.
3. re-shorted BonTon Stores (BONT) into strength today, $6.84... This remains MCM's top bankruptcy candidate in US Retail. I covered it for a sizable gain last time at $9.49, but clearly that was my mistake. The only thing worse than a PM making a mistake is being too pig headed to learn from it. There are no SEC rules against re-shorting stocks that you cover; if and when the BonTon goes to zero, we'll be there.
4. shorted General Mills (GIS) into strength today, $56.80... Long standing senior management is exiting stage left (the CFO went to Unilever), and the long awaited "Nelson Peltz is going to file on it" hedge fund rumor seems about as likely a near term catalyst as my going to work for another hedge fund anytime soon. We're short BAGL on wheat/grains input costs, and within the gross margin structure of GIS you get to own some of the same optionality, albeit not in as magnified a way. Its a low beta, big cap, "Consumer Staple" stock, so long holders like State Street, Cap Re, and T.Rowe feel safe it in it. Apparently hedge funds havnt done the MCM modelling work i have here, because no one is short this yet (less than 1% of the floating shares are held short).
5. shorted Heinz (HNZ) into strength this afternoon, $46.18... note to follow.
6. shorted Sonic Corp (SONC) into strength this afternoon, $21.99... note to follow.
Thanks in advance for all of your continued research feedback,
KM
______________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
SHLD (short 106.09, cover 97.79) = +7.8%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
The MCM Trade is up, and MCM Trend is down... my favorite kind of tape to fade. Selling green, buying red (kind of like Thunder Bay snowmobiling traffic light rules!). The trading wind is whippy out there - keep moving to stay warm.
MCM Trades/Fades
1. sold another 1/3 of The Gap (GPS) this afternoon, into strength, $20.18... MCM Value Thesis remains, but its overowned by some of the wrong people in the hedge fund community right now - apparently the chart started catching people's attention as it was climbing steadily ahead of Christmas. I want to have some dry powder to buy more next time this market cracks, and these momentum long traders bail - this is not a momentum stock and they have no business being exposed to what is a long duration value turnaround investment; we need to wash them out of our system, and buy it back lower.
2. covered all my Sears Holdings (SHLD) this morning, when it cracked, $97.79... I've had my fair share of anti-consensus short ideas in my career, but i have never had so many people tell me i am wrong shorting a stock as i have in the last 9 months in this one. Now that its down from $193/share (its Aprl 2007 nonsensical highs), E-Trade wont even give me a borrow to short it anymore! As the hedge fund crowd rolls in to short it down here, i'm rolling out. Dont expect to see Cramer write the letters S-H-L-D on his knuckles anymore either - that was embarrassing.
3. re-shorted BonTon Stores (BONT) into strength today, $6.84... This remains MCM's top bankruptcy candidate in US Retail. I covered it for a sizable gain last time at $9.49, but clearly that was my mistake. The only thing worse than a PM making a mistake is being too pig headed to learn from it. There are no SEC rules against re-shorting stocks that you cover; if and when the BonTon goes to zero, we'll be there.
4. shorted General Mills (GIS) into strength today, $56.80... Long standing senior management is exiting stage left (the CFO went to Unilever), and the long awaited "Nelson Peltz is going to file on it" hedge fund rumor seems about as likely a near term catalyst as my going to work for another hedge fund anytime soon. We're short BAGL on wheat/grains input costs, and within the gross margin structure of GIS you get to own some of the same optionality, albeit not in as magnified a way. Its a low beta, big cap, "Consumer Staple" stock, so long holders like State Street, Cap Re, and T.Rowe feel safe it in it. Apparently hedge funds havnt done the MCM modelling work i have here, because no one is short this yet (less than 1% of the floating shares are held short).
5. shorted Heinz (HNZ) into strength this afternoon, $46.18... note to follow.
6. shorted Sonic Corp (SONC) into strength this afternoon, $21.99... note to follow.
Thanks in advance for all of your continued research feedback,
KM
______________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
SHLD (short 106.09, cover 97.79) = +7.8%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Macro Morning, 1/7/08... 'Just Macro'
ASIA: traded constructively last night, all things considered...
1. China led the region trading +60bps, and India was +61bps = MCM Trend on both China and India remains positive
2. Hong Kong down 1.2%, but could have been worse given what happened in the US on friday = MCM Trend here is neutral
3. Japan continues to act horribly, down another 1.3% to 14,500, breaking the 11/21 lows with conviction = MCM Trend in Japan remains negative
EUROPE: trading positively; buoying our immediate term positive MCM Trade call...
1. FTSE trading up modestly, but a close above 6410 gets me interested on the long side, particularly ahead of a potential BOE rate cut on Thursday = MCM Trend on the UK is neutral
2. Poland down another 1.4%, and Czech stocks down another 2% = negative divergence; Global Industrial Production Growth is slowing in Eastern Europe; my concerns here remain...
Other MCM Country Callouts:
1. Middle Eastern Equities continue outperform Global equities; Kuwait, Israel, Bahrain, Qatar all trading up overnight = MCM Trend in the Middle East remains positive
2. Mexico down another -1.9% on friday, taking the index down -13.8% from the levels we got negative on country fundamentals in late October = MCM Trend in Mexico remains negative
Commodities/Rates/Currencies:
1. CRB Commodities index closed down 50bps on friday at 366 = MCM inflation theme remains, but a commodity correction from the highs should help equities bounce off their lows...
2. US 2yr yields got smoked last week, trading down to the 2.76% level; 10yr rates down to 3.88% = positive for US Equities, on a relative basis to Bonds; MCM Trade is positive
3. US$ Index showing a bid this morning, up at $76.17 = also positive for the MCM Trade being positive
4. Chinese Yuan continues to make new highs, 7.26 last = inflationary
Capital Markets: Hedge Funds, Private Equity, Banks, etc...
1. NY Post article considering the headbutting between Blackstone and the investment banks re the PHH deal breaking down... "Sources say that in the past week Blackstone CEO Schwarzman has personally visited JPM's Jaime Dimon and Lehman's Dick Fuld to offer a hand in friendship... sources saying that Schwarzman made the first move because he needs the banks more than they need him..."... remember the MCM Theme of Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -November07' ? ? How interesting times have become since all of Wall Street became enamoured with these Private Equity players coming public. Long Term Macro cycle tops are processes, not points.
2. Fed Funds futures are rising again. Odds of a 50 basis point cut at the January meeting have risen to 66%, and like clockwork, CNBC is carting all the Bull Market Strategists from the October highs back onto the squawk box this morning. Fed Centrists Fritz Meyer (AIM's Chief Strategist), and Jason Trennert (Strategas) have no where to hide at this point - they have been 'You Tubed' by MCM, and are now accountable to their clients for their ignorance of global risk management. They, of course, remain perpetually bullish.
Good luck out there today,
KM
_____________________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07' Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07'
'US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07' 'Long Term Macro Cycle tops are processes, not points'...-Jan08'
_________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
1. China led the region trading +60bps, and India was +61bps = MCM Trend on both China and India remains positive
2. Hong Kong down 1.2%, but could have been worse given what happened in the US on friday = MCM Trend here is neutral
3. Japan continues to act horribly, down another 1.3% to 14,500, breaking the 11/21 lows with conviction = MCM Trend in Japan remains negative
EUROPE: trading positively; buoying our immediate term positive MCM Trade call...
1. FTSE trading up modestly, but a close above 6410 gets me interested on the long side, particularly ahead of a potential BOE rate cut on Thursday = MCM Trend on the UK is neutral
2. Poland down another 1.4%, and Czech stocks down another 2% = negative divergence; Global Industrial Production Growth is slowing in Eastern Europe; my concerns here remain...
Other MCM Country Callouts:
1. Middle Eastern Equities continue outperform Global equities; Kuwait, Israel, Bahrain, Qatar all trading up overnight = MCM Trend in the Middle East remains positive
2. Mexico down another -1.9% on friday, taking the index down -13.8% from the levels we got negative on country fundamentals in late October = MCM Trend in Mexico remains negative
Commodities/Rates/Currencies:
1. CRB Commodities index closed down 50bps on friday at 366 = MCM inflation theme remains, but a commodity correction from the highs should help equities bounce off their lows...
2. US 2yr yields got smoked last week, trading down to the 2.76% level; 10yr rates down to 3.88% = positive for US Equities, on a relative basis to Bonds; MCM Trade is positive
3. US$ Index showing a bid this morning, up at $76.17 = also positive for the MCM Trade being positive
4. Chinese Yuan continues to make new highs, 7.26 last = inflationary
Capital Markets: Hedge Funds, Private Equity, Banks, etc...
1. NY Post article considering the headbutting between Blackstone and the investment banks re the PHH deal breaking down... "Sources say that in the past week Blackstone CEO Schwarzman has personally visited JPM's Jaime Dimon and Lehman's Dick Fuld to offer a hand in friendship... sources saying that Schwarzman made the first move because he needs the banks more than they need him..."... remember the MCM Theme of Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -November07' ? ? How interesting times have become since all of Wall Street became enamoured with these Private Equity players coming public. Long Term Macro cycle tops are processes, not points.
2. Fed Funds futures are rising again. Odds of a 50 basis point cut at the January meeting have risen to 66%, and like clockwork, CNBC is carting all the Bull Market Strategists from the October highs back onto the squawk box this morning. Fed Centrists Fritz Meyer (AIM's Chief Strategist), and Jason Trennert (Strategas) have no where to hide at this point - they have been 'You Tubed' by MCM, and are now accountable to their clients for their ignorance of global risk management. They, of course, remain perpetually bullish.
Good luck out there today,
KM
_____________________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07' Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07'
'US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07' 'Long Term Macro Cycle tops are processes, not points'...-Jan08'
_________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Sunday, January 6, 2008
MCM Macro Weekend Strategy, 1/6/08... 'Real Hedge Funds Hedge'
If you really want to annoy the mentally inflexible, levered-long and/or concentrated hedge fund managers in this business, remind them how right you were in making a "macro" market call on the bearish side, and then ask them why they didnt see it coming...
The most recent edition of the Hedge Fund game has become very peculiar that way; it's really the only game i know where losing is met with relative performance justifications. On Monday, the internal dialogue at most US hedge funds will go something like this: 'but we're only down a couple percent... 'hearing another guy is getting wrecked, though'...'have you heard anyone else's numbers?'... 'how's Stevie doing - hearing he's upset'... 'did you call the CFO yet? what's going on in this stock'... 'this stock is just too cheap here'...
Now, imagine if real athletes (the only other professionals i can find with the same performance-based compensation packages) behaved this way. What if Pittsburgh Steeler's quarterback, Ben Roethlisberger, went back to the dressing room after last night's 31-29 playoff loss to Jacksonville last night and whispered to the guy next to him 'but the Redskins lost to the Seahawks by more'... or, worse, 'those interceptions i threw don't matter; i have my contract guarantee'...??
The only guarantee i have for you is that if this bearish market action persists, the US Hedge Fund business will prove to be as dangerously cyclical as the US Economy, and the US Banking system have, alike.
January 2008 to date: Dow (3.50%); SP500 (3.86%); Nasdaq (5.57%); Russell 2000 (5.80%)
This was the worst 3-day start for the US market since 1932. Both the SP500 and Russell 2000 are now well off their October 2007 "Its Global This Time" highs - down 9.8% and down 14.7% , respectively. It might surprise you if i told you how many people in the business are all of a sudden calling and emailing me again, asking me for my opinion on what's next. Yes, that consensus negative sentiment shift is a bullish sign...
In the last three months, i've round-tripped the #1 criticism from both my hockey and investment careers - "he's too short"!
Hindsight is always crystal clear, and i think we are on to something here in fundamentally believing that the un-winding of long term macro cycles are processes, not points. Inflation plummeted from +13.6% in 1980 to +1.1% in 2004. Interest Rates on 10yr US Treasuries dropped from a 1981 high of approximately 16% to a low of 3% by 2003. And, most importantly, as a result of inflation going away and cost of capital doing the same, the Dow Jones went from 776 in 1982 to 14,164 in October of 2007 - yes, that's a +1,725% gain!
Therefore, my answer to all of the questions i'm getting surrounding where we go next remains quite simple - "they are too long"!
The MCM Trend (intermediate term) for the US Market remains negative - until the basic construct of hedge fund risk management changes, and PMs start asking themselves 'where do i stop selling?' versus the standard bull market preface of 'where do i cover them?; where do i buy them?', i think we continue to make lower highs on market bounces. To that end, technical resistance has developed around the SP500 1471 line.
The MCM Trade (immediate term) is going to be moved to the positive side - this is largely a call to cover oversold shorts and lock in gains. As you saw, i started doing this late in the week. I am probably early, but realizing gains on shorts we put out in early November is very profitable here. In terms of downside support, if the SP500 breaks the August 2007 low of 1406, the March 5, 2007 SP500 low of 1374 is as good as any technical reference point i see.
That's another 2-3% max downside from Friday's close.
Remember, real hedge funds hedge.
Have a great week,
KM
___________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07' Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -November 07
''US$ Bottoming is a Process, not a Point' -November07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec08 '
Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec08'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec08'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec08'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec08' _________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
The most recent edition of the Hedge Fund game has become very peculiar that way; it's really the only game i know where losing is met with relative performance justifications. On Monday, the internal dialogue at most US hedge funds will go something like this: 'but we're only down a couple percent... 'hearing another guy is getting wrecked, though'...'have you heard anyone else's numbers?'... 'how's Stevie doing - hearing he's upset'... 'did you call the CFO yet? what's going on in this stock'... 'this stock is just too cheap here'...
Now, imagine if real athletes (the only other professionals i can find with the same performance-based compensation packages) behaved this way. What if Pittsburgh Steeler's quarterback, Ben Roethlisberger, went back to the dressing room after last night's 31-29 playoff loss to Jacksonville last night and whispered to the guy next to him 'but the Redskins lost to the Seahawks by more'... or, worse, 'those interceptions i threw don't matter; i have my contract guarantee'...??
The only guarantee i have for you is that if this bearish market action persists, the US Hedge Fund business will prove to be as dangerously cyclical as the US Economy, and the US Banking system have, alike.
January 2008 to date: Dow (3.50%); SP500 (3.86%); Nasdaq (5.57%); Russell 2000 (5.80%)
This was the worst 3-day start for the US market since 1932. Both the SP500 and Russell 2000 are now well off their October 2007 "Its Global This Time" highs - down 9.8% and down 14.7% , respectively. It might surprise you if i told you how many people in the business are all of a sudden calling and emailing me again, asking me for my opinion on what's next. Yes, that consensus negative sentiment shift is a bullish sign...
In the last three months, i've round-tripped the #1 criticism from both my hockey and investment careers - "he's too short"!
Hindsight is always crystal clear, and i think we are on to something here in fundamentally believing that the un-winding of long term macro cycles are processes, not points. Inflation plummeted from +13.6% in 1980 to +1.1% in 2004. Interest Rates on 10yr US Treasuries dropped from a 1981 high of approximately 16% to a low of 3% by 2003. And, most importantly, as a result of inflation going away and cost of capital doing the same, the Dow Jones went from 776 in 1982 to 14,164 in October of 2007 - yes, that's a +1,725% gain!
Therefore, my answer to all of the questions i'm getting surrounding where we go next remains quite simple - "they are too long"!
The MCM Trend (intermediate term) for the US Market remains negative - until the basic construct of hedge fund risk management changes, and PMs start asking themselves 'where do i stop selling?' versus the standard bull market preface of 'where do i cover them?; where do i buy them?', i think we continue to make lower highs on market bounces. To that end, technical resistance has developed around the SP500 1471 line.
The MCM Trade (immediate term) is going to be moved to the positive side - this is largely a call to cover oversold shorts and lock in gains. As you saw, i started doing this late in the week. I am probably early, but realizing gains on shorts we put out in early November is very profitable here. In terms of downside support, if the SP500 breaks the August 2007 low of 1406, the March 5, 2007 SP500 low of 1374 is as good as any technical reference point i see.
That's another 2-3% max downside from Friday's close.
Remember, real hedge funds hedge.
Have a great week,
KM
___________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07' Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -November 07
''US$ Bottoming is a Process, not a Point' -November07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec08 '
Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec08'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec08'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec08'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec08' _________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Thursday, January 3, 2008
MCM Macro Intraday Trades, 1/3/08...
Stocks Discussed: AN, and TCO
Another solid day to be booking gains in selective shorts that are underperforming an already ominous tape... Always trade from a position of financial and mental strength.
MCM Trades/Fades
1. covering all my Autonation (AN), again, on weakness today, $14.67... with the stock down another 3% here intraday, making a fresh 4 year low, its as good a time as any to realize another gain here on the short side. Reshort it on up days; Lampert is in trouble with this asset for the foreseeable future. The state of Florida is in a consumer recession, and their new and used car market gets worse by the day. I realize their concentrated holders could/should have some "edge" here - in fact, they better, because this is one of the ugliest balance sheets i see in the land of US Consumer Cyclicals.
2. covering all my Taubman Centers (TCO), $47.86... this stock is also down another 3% here as i type this note, and its down over 9% from where Mr Taubman attempted to convince the Street that his 2008 earnings targets were going to be met, miserably under performing a miserable market - not good for moral. I think that the late John Locke once explained this type of chief executive officer guidance in his definition of a "mad man": 'those reasoning correctly from erroneous premises'.
Thanks again in advance for all of your constructive research feedback,
KM
_________________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Another solid day to be booking gains in selective shorts that are underperforming an already ominous tape... Always trade from a position of financial and mental strength.
MCM Trades/Fades
1. covering all my Autonation (AN), again, on weakness today, $14.67... with the stock down another 3% here intraday, making a fresh 4 year low, its as good a time as any to realize another gain here on the short side. Reshort it on up days; Lampert is in trouble with this asset for the foreseeable future. The state of Florida is in a consumer recession, and their new and used car market gets worse by the day. I realize their concentrated holders could/should have some "edge" here - in fact, they better, because this is one of the ugliest balance sheets i see in the land of US Consumer Cyclicals.
2. covering all my Taubman Centers (TCO), $47.86... this stock is also down another 3% here as i type this note, and its down over 9% from where Mr Taubman attempted to convince the Street that his 2008 earnings targets were going to be met, miserably under performing a miserable market - not good for moral. I think that the late John Locke once explained this type of chief executive officer guidance in his definition of a "mad man": 'those reasoning correctly from erroneous premises'.
Thanks again in advance for all of your constructive research feedback,
KM
_________________________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = - 3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76 ) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25 , cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
AN (short 15.49, cover 14.67) = +5.3%
TCO (short 52.73, cover 47.86) = +9.2%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Wednesday, January 2, 2008
MCM Macro Intraday Trades 1/2/08... 'Ringing In The New Year with Some Red'
Stocks Discussed: TIP, CAKE, ATML, EWY, and CAT
From a US market perspective, the facts haven't changed, so i haven't.
The MCM Trade and MCM Trend remain negative.
MCM Trades/Fades
1. sold all my Treasury Protected Inflation (TIP) this afternoon, $106.64... since the US markets closed on what we Canadian's call 'Boxing Day' (December 26th), the TIP protection i bought has been +2.4%, while the SP500 has been down approximately -3%. This trade will be recorded in what some of the mathematically inclined call "alpha space". Oil opened this morning at $97, Gold was testing $850/oz, and i'm finally hearing every talking head on CNBC talk about reality (ie inflation)... as consensus rolls in, i roll out. Nice macro win for us with this call. We'll buy TIP back on down days.
2. bought another 1/3 of Cheesecake Factory (CAKE) this morning, $21.90... this lowers my cost basis to $22.60 on 2/3 of a full position. If i'm not below Peltz's cost basis, i'm getting very close. Bear Stearns downgraded the restaurant group and Wedbush Morgan's analyst Brian Moore said Peltz "may not be the catalyst we initially thought"??Unfortunately for Mr Moore, he works for a momentum sales growth research shop who wouldnt understand a value investor's catalyst if we stamped it on his forehead.This assures me that Moore has plenty of people staring at the tree of near term monthly sales and earnings while Peltz takes this free cash flow machine to his own forest.
3. covered all my Atmel (ATML) today, $4.28... i've said it a lot, but i'll keep saying it - gains on the short side are meant to be taken. Nothing like starting 2008 with some locked in gains while the masses scramble to "hedge". Here's another +6.8% win.
4. covering all my South Korea ETF (EWY) today into the close, $61.70... Asian ETF's are getting hammered today, and this one more than most, trading down a solid -4.7% as i type this note. As consensus comes to agree with me that Asian Industrial Production Growth will slow in 2008 (this morning, Singapore printed the worst quarterly GDP figure for Q4 that we've seen in almost 5 yrs), South Korea remains MCM's best fundamental country short in Asia. That said, you have to lock these down when hedge funds are stepping on them frantically so that they can get themselves "short exposure". Hedge funds should consider being hedged, before the maket moves down.
5. covering all my Caterpillar (CAT) today into the close, $70.23... the big levered CAT is trading horribly to kick off 2008, down over 3%. Technically, this looks like a good spot to cover, and you know i like getting paid on market down days. Always good to build up some positive performance cushion early in the new season. Re-short on up days. This is one of the surrogate shorts i'm using to make $ off of the MCM Theme of the "Its Global this time" Industrial Production Growth story slowing in 2008. The CAT looks ill. ____________________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07'
'US$ Bottoming is a Process, not a Point' -November07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec08 '
Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec08
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec08'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec08'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec08' _________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = -3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25, cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
From a US market perspective, the facts haven't changed, so i haven't.
The MCM Trade and MCM Trend remain negative.
MCM Trades/Fades
1. sold all my Treasury Protected Inflation (TIP) this afternoon, $106.64... since the US markets closed on what we Canadian's call 'Boxing Day' (December 26th), the TIP protection i bought has been +2.4%, while the SP500 has been down approximately -3%. This trade will be recorded in what some of the mathematically inclined call "alpha space". Oil opened this morning at $97, Gold was testing $850/oz, and i'm finally hearing every talking head on CNBC talk about reality (ie inflation)... as consensus rolls in, i roll out. Nice macro win for us with this call. We'll buy TIP back on down days.
2. bought another 1/3 of Cheesecake Factory (CAKE) this morning, $21.90... this lowers my cost basis to $22.60 on 2/3 of a full position. If i'm not below Peltz's cost basis, i'm getting very close. Bear Stearns downgraded the restaurant group and Wedbush Morgan's analyst Brian Moore said Peltz "may not be the catalyst we initially thought"??Unfortunately for Mr Moore, he works for a momentum sales growth research shop who wouldnt understand a value investor's catalyst if we stamped it on his forehead.This assures me that Moore has plenty of people staring at the tree of near term monthly sales and earnings while Peltz takes this free cash flow machine to his own forest.
3. covered all my Atmel (ATML) today, $4.28... i've said it a lot, but i'll keep saying it - gains on the short side are meant to be taken. Nothing like starting 2008 with some locked in gains while the masses scramble to "hedge". Here's another +6.8% win.
4. covering all my South Korea ETF (EWY) today into the close, $61.70... Asian ETF's are getting hammered today, and this one more than most, trading down a solid -4.7% as i type this note. As consensus comes to agree with me that Asian Industrial Production Growth will slow in 2008 (this morning, Singapore printed the worst quarterly GDP figure for Q4 that we've seen in almost 5 yrs), South Korea remains MCM's best fundamental country short in Asia. That said, you have to lock these down when hedge funds are stepping on them frantically so that they can get themselves "short exposure". Hedge funds should consider being hedged, before the maket moves down.
5. covering all my Caterpillar (CAT) today into the close, $70.23... the big levered CAT is trading horribly to kick off 2008, down over 3%. Technically, this looks like a good spot to cover, and you know i like getting paid on market down days. Always good to build up some positive performance cushion early in the new season. Re-short on up days. This is one of the surrogate shorts i'm using to make $ off of the MCM Theme of the "Its Global this time" Industrial Production Growth story slowing in 2008. The CAT looks ill. ____________________________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07' Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07'
'US$ Bottoming is a Process, not a Point' -November07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec08 '
Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec08
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec08'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec08'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec08' _________________________________________________
Closed Out Positions (realized gains in green, losses in red)
Long
EWH (bought 20.70, sold 21.35) = +3.1%
BBY (bought 46.60, sold 49.40) = +6.0%
MLHR (bought 26.70 , sold 27.65) = +3.9%
HOG (bought 45.10 , sold 49.96 ) = +10.8%
EAT (bought 21.54, sold 22.44) = +4.2%
EBAY (bought 31.70, sold $34.91) = +10.1%
TOL (bought 22.30 , sold 21.51) = - 3.5%
EWH (bought $22.73. sold 21.98) = - 3.2%
COST (bought 69.67, sold 68.74) = -1.3%
RSX (bought 49.32, sold 51.36) = +4.0%
HOG (bought 48.20, sold 46.55 ) = -3.4%
KGC (bought 17.33, sold 17.74) = +2.4%
GLD (bought 78.60, sold 82.69) = +5.2%
TIP (bought 104.68, sold 106.64) = +1.9%
Short
RIMM (short 113.90, cover 111.60) = +1.0%
DAVE (short 14.24 , cover 13.60) = +4.5%
DLTR (short 28.51, cover 26.47) = +7.2%
HTZ (short 19.29, cover 18.58 ) = +3.7%
TGT (short 57.93 , cover 59.04 ) = - 1.9%
SPG (short 90.60, cover 94.10) = -3.9%
LIZ (short 25.58, cover 24.19) = +5.4%
BKC (short 26.74 , cover 25.80 ) = +3.5%
EWP (short 68.03, cover 67.47) = -0.82%
HAS (short 27.51 , cover 26.35) = +4.2%
DLTR (short 29.52, cover 28.18 ) = +4.5%
CPB (short 35.62, cover 36.76) = -3.2%
IPAR (short 20.48 , cover 16.47) = +19.6%
TLF (short 4.04, cover 3.27) = +19.1%
AN (short 16.99, cover 16.70) = +1.7%
WYN (short 28.19, cover 27.39) = +2.8%
MCD (short 63.35, cover 61.22) = +3.4%
DLTR (short 29.46, cover 27.66 ) = +6.1%
MA (short 219.44, cover 212.72) = +3.1%
SHLD (short $112.51, cover 104.37 ) = +7.2%
BKC (short $28.02, cover 27.70 ) = +1.3%
EWW (short 59.40, cover 55.83) = +6.0%
GE (short 37.60, cover 36.48 ) = +3.0%
JBX (short 28.49, cover 25.74) = +9.6%
BAGL (short $20.15, cover 16.43) = +18.5%
KSS (short 52.64, cover 45.37) = +13.8%
TLF (short 3.25, cover 3.05) = +6.2%
TGT (short 55.23, cover 49.99) = +9.5%
RIMM (short 103.53, cover 116.98) = - 12.99%
HAS (short 27.15, cover 25.80) = +4.97%
BONT (short 12.26, cover 9.49) = +22.6%
WYN (short 25.01, cover 23.31) = +6.8%
NKE (short 67.01 , cover 64.18) = +4.2%
ATML (short 4.59, cover 4.28) = +6.8%
EWY (short 66.06, cover 61.70) = +6.6%
CAT (short 71.49, cover 70.23) = +1.8%
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Tuesday, January 1, 2008
MCM Macro Year End: Q407' statistics, and a few thoughts...
As most of you know, i left working for other people on Wall Street at the end of October. Ironically, after 9 successful years in the business, the decision to leave was not my own. Since i was a teenager, i had never been cut from a team, or fired... so i needed to collect this as one of life's critical learning experiences.
At the time, the US market was testing new highs...
And, i guess, at the time, smarter people in the business than i may have thought i was too negatively positioned, too fundamentally bearish, etc...
However, as i said in what turned out to be my last meeting working from a New York City office, 'the beauty of this game is that its direction can change, very quickly'...
And that it did come November. A macro economic cycle and US equity market topping process turned out to be what i thought it was going to be;a process, not a point.
November 2007: Dow (4.0%); SP500 (4.4%); Nasdaq (6.9%)
December 2007: Dow (0.8%); SP500 (0.9%); Nasdaq (0.3%)
Q4 2007: Dow (4.5%); SP500 (3.8%); Nasdaq (1.8%)
Ralph Waldo Emerson said that:
"it is easy in the world to live after the world's opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude. What is popular is not always right".
There is a major difference between making "great calls" in business, and being a "great man" in life. From what i can tell, becoming a "great man" in this world takes a lifetime. And that is usually not decided until one moves on from this world to a higher place. I'm turning 33 years old on Saturday. I'm a husband, a father, a son, a brother, and a friend - so i have plenty of hay to bail!
Along life's less travelled roads, all we can do is have conviction in a disciplined process that prepares us to capture life's great successes. Opportunities will present themselves - that is the highest conviction call i am willing to make.
Best of luck finding your great moments in 2008,
KM
At the time, the US market was testing new highs...
And, i guess, at the time, smarter people in the business than i may have thought i was too negatively positioned, too fundamentally bearish, etc...
However, as i said in what turned out to be my last meeting working from a New York City office, 'the beauty of this game is that its direction can change, very quickly'...
And that it did come November. A macro economic cycle and US equity market topping process turned out to be what i thought it was going to be;a process, not a point.
November 2007: Dow (4.0%); SP500 (4.4%); Nasdaq (6.9%)
December 2007: Dow (0.8%); SP500 (0.9%); Nasdaq (0.3%)
Q4 2007: Dow (4.5%); SP500 (3.8%); Nasdaq (1.8%)
Ralph Waldo Emerson said that:
"it is easy in the world to live after the world's opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude. What is popular is not always right".
There is a major difference between making "great calls" in business, and being a "great man" in life. From what i can tell, becoming a "great man" in this world takes a lifetime. And that is usually not decided until one moves on from this world to a higher place. I'm turning 33 years old on Saturday. I'm a husband, a father, a son, a brother, and a friend - so i have plenty of hay to bail!
Along life's less travelled roads, all we can do is have conviction in a disciplined process that prepares us to capture life's great successes. Opportunities will present themselves - that is the highest conviction call i am willing to make.
Best of luck finding your great moments in 2008,
KM
Subscribe to:
Posts (Atom)