madhedgefundtrader's blog

So this is all $887 billion in stimulus gets you? There are now more than 15 million unemployed, including 6.8 million who have been jobless for more than six months. Until today’s number, our nine month long recovery produced a net loss of 133,000 jobs! At this stage of the 2003 recovery, we were regularly clocking 200,000-300,000 a month in job gains. Is Michele Obama already secretly scoping out new private elementary schools in Chicago?

Is 10% of all higher education in the US nothing more than a scam? The gravy train is about to end. Education’s version of the subprime crisis. A crack down on deceptive marketing practices, where degree programs are sold like time shares. The student loan default rate at for profit schools is thought to be as high as 50%. Sticking the government with the tab. Starve these schools of subsidized government funding, and their shares are history. And just try and get a job with one of these Mickey Mouse degrees. (APOL), (CPLA), (DV).

The recent surge in stocks is setting up a classic “head and shoulders” top. Anything short of the 500,000 blockbuster number some analysts are expecting for Friday’s nonfarm payroll could tank the market. Is the Dow still overvalued by 3,000 points? Watch out when those low interest rates depart for nether regions. Reversion to the mean can be a bitch.

After the dotcom bust of 2000, these bad boys spent nearly a decade in the penalty box. During this time, cash balances doubled, free cash flows soared, outstanding shares shrank, and multiples fell to a tenth of their bubblicious peaks. The 13 month tech rally we saw from the 2009 lows could just be the down payment of a decade long bull market in these stocks. (INTC), (CSCO), (JNPR), (JDSU), (SNDK), (MU), (ORCL), XLK), (QQQQ), (ROM).

Going through the company’s contract with British Petroleum (BP) with a fine tooth comb. RIG is indemnified for any accidents, including spills. A net asset value of $106/ share, which makes its current price of $51 a once in a life time steal. It has a $28 billion order backlog to tap offshore fields in places like the offshore Tupi field in Brazil, outside the reach of federal regulators, which will generate $10 billion of free cash flow over the next three years.

It’s not all about making money. Listen to the story of Colonel Mitchell Paige on Guadalcanal in 1942.

Don’t kid yourself, Google didn’t leave China, it was booted out. Blame Sergei. Google is increasingly being priced like a public utility it has become, not the hyper growth super nova it once was. Investors are growing less tolerant of the firm’s quixotic forays into other money losing business. Did I mention that they have a space program? (GOOG), (BIDU).

There is a massive structural imbalance in residential real estate that will take at least a decade or more to unwind. 26 million homes for sale and 70 million missing buyers do not add up to a bull market. 80 million retiring baby boomers are putting huge generational pressure on the market. Losing a city the size of San Francisco in demand every year. A replay of 1929 to 1955 when prices remained flat? (XHB).

The lucky country has become accident prone. Shooting itself in the foot with a 40% special tax on the profits of mining companies. Start scaling back into the Ausie dollar and the Ausie/euro cross. Australian stocks should be at the top of your list too. (FXA), (EWA).

Thank you, Mr. Market, for finally coming to your senses! It’s about time that you kicked your ecstasy habit. There are now more broken 200 day moving averages than National Rifle Association bumper stickers at a Tea Party rally. Building short lists of your next big trades. It’s way too early to pull the trigger on any of this stuff. (AAPL), (GS), (YCS), (TBT),

What is the latest stock market crash telling us? Why has virtually every category of risk asset melted down in the last two weeks? The implications of a looming “W.” The risk of economic Armageddon is still out there. TARP II, anyone? Please pass the Xanax.

If you get the double dip recession that Europe and China are trying their best to deliver, you hit a home run. If the recent diabolical market action turns out to be just a vicious head fake, then they would be selling into a hole and getting killed on the next whipsaw. Only those who believe in the Easter Bunny think diversification will protect them. Cash is best hedge of all. (USO), (EEM), (SLV), (PPLT), (PALL), (JNK), (YCS) (FXE), (FXB), (FXA), (FXC), (VIX).

How far will gold Run? You now no longer need to believe in wild conspiracy theories or unban legends. The long term structural demand for the yellow metal is now so well known that it has become the conventional wisdom. Surely peak gold is upon us. Next stop: $6,250. (GLD), (ABX).

Welcome to the conference of bull markets. Gold hits a new all time high during the conference. Catering to the hard core faithful who suffered a 20 year bear market in hard assets, and even hung on during the dark days when gold plumbed the depths to $260/ounce in 1999. The nuclear power boom in China and the coming renaissance in the US. The new poster child for hard assets: the rare earths.

There is a new war underway between two forms of capitalism. Western style multinationals are currently on the defensive. Look what happened to Google. An in depth interview on Hedge Fund Radio with Ian Bremmer, president of the Eurasia Group, one of the top independent political research and analytics firms in the world. A tour de force of the global investment landscape. Buy China, avoid the US, and kiss Europe and the euro goodbye. (GOOG), (SPX), (EZU), (FXI), (FXE), (EWA), (EWC), (EWY), (EWT), (THD), (IDX), (EWS), (EWZ), (ECH), (EWW), (RSX)