He stopped loving her today.

You ever notice that people want something for nothing, and nothing is never good enough. Using basic calculus, then something is always the least. A bird in hand is worth two, whatever. As long as my stock is going up, nothing is wrong with my stock and vice versa. Guys like Steinhardt and Robertson couldn't grasp this in 1998-99 with the Nasdaq rally. They hung it up. I guess when you amassed a few hundred million, its easy to retire. Very simple, pick your entries carefully, define your exits, take some risk out of the equation when you can, let the rest ride.

I mentioned spin-offs before, here the street is giving you a great entry. The big holders don't want these little stubbies on their books, so they dump'em. As long as you give yourself some room (remember time and price), then they can work fantastically well.

China Girl

Thanks for all of your commentary to my patriotism. I enjoyed the quote "the only time I feel red, white and blue is when I do laundry". Still holding back the tears from that. Well its back to business.

Woke up this morning, and the idiots on TV blaring the "Shanghi Swoon" alert. If a market goes up 30%, then down 10%, then up 40% in 6 months, do you really think it can't be down 6% in a day? The fact that it is the largest Socialist country on earth doesn't surprise you that they can get more tax dollars by raising fees on stock transactions? Doesn't anyone remember 1999? Beuller?

While I am on a rant, last night I read an article in one of these wealth advisors magazines. The supposed "financial writer" who contributed to this article on OTC derivs really blew my mind with his ignorance. He compared a bond fund that sells the CDS on its holdings is equivalent to covered call writing in equities. When in real life, we all know that the fund manager is simply doubling his bets. It is actually the equivalent of selling puts, not calls on his bonds. But that really doesn't matter, does it?

One item flying low on the radar is the amount of spin-off activity. While not as sexy as private equity cash deals, spin-offs allow you to trade like an arbitrageur with a hell of a lot less risk.

Memorial Day 2007

Hopefully, we all paid our respects today along with the BBQ and swimming pools. Its great to be an American, but we all have to take time out of our hustle and bustle to think about how we got here. The sacrifices our ancestors had to make in order to provide us with our special brand of freedom not seen anywhere else. How many articles have you read today that criticize our government? Never before the United States was around would the public have the liberty to speak against our leaders. We have massive infrastructure and superior social services for half of the cost compared to others. From 1945 to 2001 we lived undisturbed by foreign advances and were allowed to pick and choose our battles. On a day like today we must look past individual needs in order to view our common goal.

You Want the Truth, You Can't Handle the Truth.

Yep, stayed up all night just to catch Jack Nicholson explode in the courtroom. I'd say its one of the top 3 movie monologues. Alec Baldwin in Glenngarry Glen Ross and Mel Gibson in Braveheart are my other faves.



Cousin Keith over at Turbulence of Dreaming would like me to translate some of the terms I use. Let's look at the previous post:

Yes, Gordon Gecko, Boesky, and Dennis Levine are all back. made a lot of cash insider trading in the '80s both fake and real Private equity investors, not junk bonds, are the new rocket fuel for the merger game. idea here is that Wall Street needs to do deals in order to survive Adam Warner (AMEX Alum) over on the Daily Options Report brings up some really good facts. Blue Horshoe loves everything. another former market maker from the American Stock Exchange who blogs it real good, reference to the movie Wall Street Market opens up to new highs and sells off on Greenspan. Yep, that's correct, my great uncle Al said that China was a "bubble"and the spoos decided to hit the mattresses. My grandfather's name was Greenspan, the stock market closed on its lows after trading to a new high, reference to The Godfather WRONG. Its Moors not Moops. Seinfeld episode where George plays Trivia Pursuit with Bubble Boy This market has been toppy for 2 weeks already. NDX way underperforming, 30-yr rates backing over 5%, dollar, gold and oil all reversing trend. Liquidity drying up so assets need to be sold.random thoughts on what my gut tells me is going on in the markets after being involved for nearly 2 decades. I would wait till the price hits 1450, by then all the suckers will be out. Mr. Valentine sets the price. where the SPX index chart shows some support, and a Trading Places reference Happy Shavuos to all, and to all a good night. what Charles Dickens might have said to his Jewish neighbors on the day we celebrate when the Law was received at Sinai.

I hope this helps Cuz! using old school exclamation point because I can't remember how to do those smiley faces!!!

Because its Wreckable.

Yes, Gordon Gecko, Boesky, and Dennis Levine are all back. Private equity investors, not junk bonds, are the new rocket fuel for the merger game. Adam Warner (AMEX Alum) over on the Daily Options Report brings up some really good facts. Blue Horshoe loves everything.

Market opens up to new highs and sells off on Greenspan. Yep, that's correct, my great uncle Al said that China was a "bubble"and the spoos decided to hit the mattresses. WRONG. Its Moors not Moops. This market has been toppy for 2 weeks already. NDX way underperforming, 30-yr rates backing over 5%, dollar, gold and oil all reversing trend. Liquidity drying up so assets need to be sold.

I would wait till the price hits 1450, by then all the suckers will be out. Mr. Valentine sets the price.

Happy Shavuos to all, and to all a good night.

Its Fun to Stay at the Y-M-C-A

Dow 30 closes in red for 2nd day in a row, I guess we are in a bear market.

Many of the people I meet are willing to make less money then make a simple move.

Where are those Yankee fans now?

Looking forward to that 3-day weekend.

Pizza in a Cup

I've been asked what is the difference between making markets in options, trading merger arb spreads, and building diversified portfolios. The answer is your risk/time ratio. That is how long do you have to get out of a bad trade or position. In the first two cases, you would take on large risk, but have a small time frame. In the last case, we look at a longer time horizon hence taking less risk. This also allows us to rebalance quite frequently in order to capitalize on volatility.

Very scary to be leveraged up on the long side here. Gold/oil has started to diverge which should create a squeeze in dollar/yen as it has the last 2 years. 10yr also backing up to 4.75 which should send in the asset allocators soon. But I forgot, TTID.