"...the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it?"
Valeant Fiasco Hits Biggest Holder: Sequoia Suffers Largest Outflow Of The Year, And Why It Could Get WorseSubmitted by Tyler Durden on 11/11/2015 09:23 -0500
Ruane Cunniff & Goldfarb, the investment firm that runs the Sequoia Fund, was Valeant’s largest shareholder as of June 30, with VRX shares growing to 29% of Sequoia’s portfolio at midyear. The latest outflow is a continuation of previous redemptions: "in the first 10 months of 2015, Sequoia Fund’s outflows totaled about $213 million, Bloomberg data show, after investors withdrew more than $500 million in 2014."
Unicorns Dropping Like Flies: First Dropbox; Then Square; Now Fidelity Cuts Snapchat Valuation By 25%Submitted by Tyler Durden on 11/10/2015 12:21 -0500
First it was Dropbox. Than it was Jack Dorsey's "other" company, Square. Today, it's the turn of Snapchat, the fourth most highly valued private tech start up: "Fidelity, the only fund manager to have invested in the four-year-old company best known for disappearing photos, wrote down the value of its stake by 25 per cent in the third quarter."
Weaight Watchers' shorts were the biggest losers this morning as Oprah Winfrey unveils a 10% stake in the greed-is-not-good company. WTW rose 100% on the news as Oprah takes a board seat and has begun a 'program' to lose weight. With 57% of the float short, (and Oprah with an option to take 5% more), all she has to do is convince 30% of investors to pull their borrow and the 100% gains suddenly become a "Volkswagen"-situation...
The current surge in dis-inflationary pressures is not just due to the recent fall in oil prices, but rather a global epidemic of slowing economic growth. While Janet Yellen addressed this "disinflationary" wave during her post-meeting press conference, the Fed still maintains the illusion of confidence that economic growth will return shortly. Unfortunately, this has been the Fed's "Unicorn" since 2011 as annual hopes of economic recovery have failed to materialize. However, it is these ongoing views of optimism that have collided with economic realities.
As SEC Rolls Out Liquidity Risk Plan, Here Are The Bond Funds That May Be Most Vulnerable In A MeltdownSubmitted by Tyler Durden on 09/22/2015 16:15 -0500
With the SEC moving to head off the risk of a bond market meltdown triggered by a dangerous combination of illiquidity and bond fund proliferation, WSJ decided to see which fund providers are the most at risk in a crisis. The list may surprise you...
News That Matters
Day after day investors are treated to 5-Star Morningstar managers, so-called "strategists", economissseds with entire religions on the line, and circus barkers who proclaim that: a) The US is decoupled from the rest of the world; and/or b) The US is the cleanest dirty shirt; an/or c) There are no indications that the US economy is near a recession. Here are four simple charts - from, just today's data - that destroy this glass half full and rose-colored ignorance of reality...
During Monday's flash crashing mayhem, the fragility of the ETF pricing system was exposed for all to see. While common sense dictates that the extreme market moves, trading halts, and tripped circuit breakers may have had quite a lot to do with the epic divergences between NAV and unit pricing, the real culprit was a "computer glitch" caused by a botched "systems change" last Saturday. The fact that the trouble calculating NAVs across nearly 800 mutual funds happened on the very same day as the flash crash is strictly coincidence.
Gold has a place in high-net worth individuals portfolios as an insurance policy against systemic risk in the banking system, says Carmignac fund manager Michael Hulme.
You can stop waiting for a global financial crisis to happen. The truth is that one is happening right now. All over the world, stock markets are already crashing...
At the peak of bull markets, when stock prices have been rising long enough for people who just recently started paying attention to conclude that they always go up - that’s when retail investors traditionally go all-in to snag some of that apparently easy Dow Jones money. That’s also when markets tend to peak and then roll over, once again transferring a sizable chunk of societal wealth from late-to-the-party “dumb money” investors to the pros who have been here before and recognize a peak when they see one. So it’s interesting to hear that retail investors are departing from the script in 2015.
If you’re into mysteries, there’s certainly no shortage of them around the world. Enjoying them is one thing, solving them is quite another.... Mysterious hounds and mysterious criminals certainly help keep our minds razor sharp as well as entertained. Yet, perhaps the biggest mystery in the world today involves - pension plans. Many people have them, and most people fully know what their eventual pension payout will be. Unfortunately, the average person doesn’t know how their pension plan is actually taped together, and fewer still, appreciate that the “promise” of their “eventual pension payout” is not as guaranteed as they may believe.
...while the media gets overly excited about monthly job growth, the reality is that job growth has been little more than just a function of overall population growth. This isn't something the fosters long-term economic expansions that generate higher levels of prosperity... and if you think low interest rates necessitate high stock prices, that wasn't the case in the 1940s when interest rates were low and stock prices were below their long-term average relative to past earnings.
Ten Members of the U.S. Congress – along with 32 of their staff members – received secret payments from Azerbaijan’s state-owned oil company to travel to Baku in 2013, to cover the cost of travel, including souvenirs of “silk scarves, crystal tea sets and Azerbaijani rugs.”