South of Wall Street

There's less noise below the Mason-Dixon line

South of Wall Street - There's less noise below the Mason-Dixon line


  • (SALE) (NCLH) (RM) (NDLS) (HLT) – More Issuance announcements after the close.   Smart money is coming out, of everything – its pretty straightforward.
  • (SBUX) – CEO sells $45MM in stock
  • eBay (EBAY) – exited calls today (+140%).  Should get another lift tomorrow as the Street lifts numbers in response to the ChannelAdvisor data.
  • (DECK) Deckers ripped today, so we took the opportunity to sell 10% above $85 – tough to be short, tough to be long
  • Favorite short: recent IPO (SFM) – no one wants to buy the Private Equity shares and the stock is about to break.  Additionally, this is a messy – second rate WFM
  • (OMEX) trades like death following another shot by the next Carl I.

Preview for the week

  • Selling position in eBay (EBAY) calls after the puke selloff and rebound trade.  Thank you Nov. Fiscal Year End Mutual fund managers.
  • Adding S&P Index puts in layers going out 12 months.  My thoughts:
    • 1. It is naïve to believe that deflation will not have an impact on Europe
      2. The valuation argument in the US has disappeared.  The Street missed this year’s rally and is extrapolating out fund flows to support asset prices.  I think Tapering, and a timeline for the end of QE blows this out of the water.
  • Shorting Stories with a focus on PE exiting recent IPOs.  There are no natural buyers for many of these companies.  Sprouts (SFM) is at the top of the list.   SEAS & PF are on the list too
  • Two of my favorite PM’s and Strategists to fade (no names) see very little chance of the market selling off.  They saw no chance for it to rally 6 months ago

Randoms: EFTs Suck, (PACD, FB, INTC)

Some random thoughts.

  • There was a good article in Barrons this week on a value investment course at NYU.  The following struck me: “….”Then there’s zero reason to diversify,” Rosenwald counseled. “You should bet it all on black, where you have done your own research.”  I like this guy.
  • Do you actually know what an ETF is?  I’ve asked plenty of fund companies to describe EXACTLY how the logistics of particular vehicles work- and I get answers like “you know”, “well, if that happened we’d just get secondary liquidity or use a swap”, or “that is pretty extreme, but someone would step in”.
    Interesting… ETFs are derivatives, right?  Retail buys them, and Hedge Funds short them, right?  Hmm.
    Take a look at this paper on ETFs – I’m pretty sure no one has any idea what happens when these things (which now cover every asset class) blow up.  Any of you ETFers should probably make sure you can explain the Raptor below.  Why does retail need to trade ETFs intraday?  To get picked off by Algos? Si.

Pacific Drilling (PACD)$13.50/share offer? – who cares?

Facebook (FB): Retail loves it 6 months ago, Street does a half-hearted research launch to make their customers feel less-bad about the 50% spanking they took.  Retail bails.  Street buys.  You were an idiot if you bought it, you were an idiot if you sold it.  Same ole’ game.

Intel (INTC): Was it that difficult? – Great dividend though


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