"Guess what? I have flaws. What are they? Oh I dunno, I sing in the shower? Sometimes I spend too much time volunteering. Occasionally I’ll hit somebody with my car. So sue me—no, don’t sue me. That is opposite the point I’m trying to make."
"Do I need to be liked? Absolutely not. I like to be liked. I enjoy being liked. I have to be liked. But it’s not like this, compulsive, need, to be liked. Like my need to be praised."
— Michael Scott, The Office
In an otherwise less than sympathetic piece on the public relations travails of the Vampire Squid everybody loves to hate, Financial Times journalist Chrystia Freeland credits the investment bank’s recently announced 10,000 Small Businesses initiative as "cleverly conceived" and "designed for maximum effect." I have to disagree.
Like many of you, I am sure, I was impressed when I heard Goldman was going to donate $500 million to a myriad of small businesses, which are widely perceived to be the primary engines of job creation in our economy. Oh goody, I thought: half a billion bucks mainlined into the veins of those businesses best able to kick start the economy back into rude health. What a coup.
Then I read the blasted thing. It is not pretty. Sixty percent of the committed funds will be distributed for "lending and philanthropic support," but this will be directed through "Community Development Financial Institutions." Call me a skeptic, but this does not sound like high powered money coursing directly into the working capital accounts of productive enterprises which can use it. Instead, it sounds like a $300 million slush fund for the functional equivalent of community NGOs. The remaining forty percent—200 million clams—will go toward "education."
Oh great, Lloyd, that’s just what every small businessman needs: an education. After all, everybody knows what the owner of a chain of dry cleaners or a machine tool factory really needs is "scholarships," greater "educational capacity," and mentoring by some half-assed social worker out of an abandoned storefront. Why stop there, though? Why not endow a hundred spots at Harvard Business School in perpetuity so Hmong immigrants can learn to
Yves had a very good post yesterday called “Why Big Capital Markets Players Are Unmanageable” on banks: the former i-banks and commercial banks. The biggest takeaway for me came from her statements regarding the level of responsibility that a junior level employee in an investment bank can have. She says:
What makes capital markets businesses different from any other form of enterprise I can think of is the amount of discretion given of necessity to non-managerial employees, meaning traders, salesmen, investment bankers, analysts. In pretty much any other large scale business, decisions that have a meaningful bottom line impact (pricing, new sales campaign, investment decision) are deliberate affairs, ultimately decided at a reasonably senior level. The discretion that customer-facing staff have in pretty much any business in limited. At what level does someone have the authority to negotiate a contract? And even then, how many degrees of freedom do they have?
That is a very significant factor in investment banking that makes it risky. Think about the blow-ups that have occurred in trading enterprises from SocGen to Sumitomo to Barings Bank. In most enterprises, most junior-level employees don’t have the decision-making authority necessary to allow these mistakes to happen.
But, Yves’ post got me to thinking a bit more about investment banking itself and the change in emphasis within firms. John Gapper at the FT had a revealing post yesterday on just this subject. He writes:
There is excited talk of investment bankers reclaiming the power and mystique that veteran rainmakers such as Joe Perella, Robert Greenhill and Roger Altman (all of whom now ply their trade at boutiques) once enjoyed at big banks, rather than being trained as technicians and treated as such.
How seriously should we take this? Not as seriously as the bankers do, it is safe to say. There will always be a place in the boardroom for a few senior advisers with the skills and temperament to give thoughtful and unbiased advice to chief executives facing big, risky decisions.
“Sometimes a chief executive needs a surgeon to operate but sometimes he needs a GP who understands people and politics and governance. The best
Syriza is one vote short of an outright majority. However, Syriza has already secured an alliance with the Independent Greeks, a right-wing party that shares little common ground with Syriza except for its rejection of austerity measures.
The coalition would have at least 162 seats, and that's an allegedly comfortabl...
Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.
In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart...
While Obama is doing everything in his power to show that when it comes to commiserating with the Saudis, he is first in line, the US relationship with that "other" US ally in the region, Israel, is in a fast and furious state of "crash and burn."
Recall, that it was yesterday when it was revealed that President Obama will forgo a visit to the Taj Mahal during his visit to India in order to pay respects in Saudi Arabia after the death of King Abdullah, the White House announced early Saturday morning. Vice President Biden was initially scheduled to lead the U.S. delegation, but he will instea...
A bit of a hodgepodge of charts to review. I'll start with my favourite of the bunch: the relationship between oil and gold prices. Peaks in the relative price between these commodities have historically provided swing lows for commodities - oil in particular. Certainly, sufficient time has passed between peaks to mark a major low.
The relationship between Nasdaq Highs and Lows doesn't suggest we have reached any major inflection yet. Ideally, Nasdaq Lows should spike above 100 to mark a major low, with 200+ for 'back up the truck' style low.
Reminder: OpTrader is available to chat with Members, comments are found below each post.
This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here
An interview with John Ehlers of Stock Spotter and Mesa Software
Ilene: John, in our last discussion about trading systems in general and yours in particular (Can trading be reduced to cycles, stresses and vibrations?) you mentioned Monte Carlo simulations and their use in measuring performance. Can you explain more about how you measure the performance of a trading system?
John: Let's start with comparing trading with gambling. The two have several things in common. In both ...
So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
PSW Members - well, what a year for biotechs! The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down! The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months. What could go wrong?
Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.
Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies. A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...
Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW)
nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Site owned and operated by PSW Investments, LLC. Contact us at: 403 Central Avenue, Hawthorne, NJ 07506. Phone: (201) 743-8009. Email: email@example.com.