The Woodstock Of Crony Capitalism

April 28, 2016 9:01 PM


It’s been a while since I've attended the Berkshire Hathaway (BRK:NYSE) annual meeting. Between the tedium of little kids asking questions about how to live life, to the feel-good nature of the thing, I simply got repulsed. Why do a bunch of hard-nosed capitalists choose to act like Ned Flanders for a weekend—in Omaha of all places? It’s illogical and completely artificial. Then, a few weeks back, as friends asked if I was attending this year, I had a certain realization—all this play-act... more

Categories: Travels
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Marketing Gets Another One Wrong (or right for us)

April 7, 2016 10:35 AM


It’s been a week since I wrote that the institutional selling in Valeant (VRX:NYSE) would end on Thursday and pent up institutional buyers would show up on Friday. I didn’t expect a 40% move higher, but am not complaining either. My hunch is that under the hood, Valeant looks a lot more like SunEdison (SUNE:NASDAQ) than Allergan (AGN:NYSE) and I don’t want to stick around to find out the answer. Despite some premium remaining on my puts, I’ve booked them all this morning. This was a very ... more

Categories: Current Investments
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Marketing Says "Sell Thursday/Buy Friday"

March 30, 2016 7:06 PM


Let’s face it—portfolio management at most mutual fund groups has devolved to the point where you essentially mimic the index. If your favorite stock is weighted at 100 bps in the index, you may overweight it at 300 bps, but if you go to 500 bps, you face career risk if you get it wrong. Besides—who wants to risk getting it wrong? It’s so easy to make 6-figures by buying the index and letting the marketing department tweak your holdings for you. Here’s what I mean by that; once a quarter, a... more

Categories: Current Investments
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Who Wants To Be Short Volatility?? I Don't.

February 29, 2016 12:46 AM


Nearly 5 years ago, I noted how the iPath S&P 500 VIX Short-Term Futures ETN (VXX:AMEX) was “Designed To Fail.” Since then, excluding some rather terrifying spikes, it has reliably melted away as I suspected that it would. If you put the position on back in 2010, you made something better than 98% on your money. If you re-weighted the position on spikes in volatility, you did a good deal better. Longer term, this publicly traded ETN is designed to continue melting away; however, in time... more

Categories: Current Investments
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A Crisis In Ponzi-Land (The "Drop-Down")

February 25, 2016 1:21 AM


As I dig through the toxic debris of collapsed Ponzi-Land MLP vehicles, I keep having this recurring question; why do all these MLPs continue to have sponsors that are so aggressive in supporting the LP distributions? I’ve seen everything from; purchases of preferreds at below market interest rates, to sponsors agreeing to forgo subordinated distributions, to support agreements where they are literally gifting the MLP cash to offset its SG&A expense and maintain enough cash flow to cover... more

Categories: Comments On Events
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