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Highest Conviction Hedge Fund Exposure By Asset Class
Curious where the "hedge fund hotel" is currently located, for both most loved and hated asset classes? The following table shows both the penthouse and the basement of the most recent groupthink, which not surprisingly, indicates that hedge funds, which have simply become highly-levered momentum and beta chasers, are most bullish on the Nasdaq, and offsetting this, are most bearish on 10 Year notes. Of course, since the bulk of the very highly levered marginal cash (for those who haven't seen it, Balyasny's leverage chart is a stunning eye opener) is already deployed, all that remains now is the profit-taking, and as such anyone who wishes to take advantage of the inevitable and recurring hedge fund hotel collapse would be advised to put on a short Nasdaq, long 10Y pair on and await the unraveling.
Source: SocGen
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And of course a long on the VIX, which they keep smashing down. Oh and long gold where 2013 sales of US mint coins has just broke all records despite the short attacks on paper gold by the FED
With nearly two months to go in 2013, the U.S. Mint already has surpassed the 2011's all time high record sales of 39,868,000 ounces in American Eagle Silver Bullion Coins. Total sales for the year 2013 to date have now reached 40,175,000 ounces. Sales of the United States Mint's American Eagles Silver coins moved into record territory yesterday after authorized purchasers ordered their full weekly allocation of 500,000 coins. With sales averaging over 3.97 million ounces per month this year, American Eagle Silver Coins sales through 5th November totalled 39,675,500 compared to 33,742,500 for all of 2012. The American Eagle Silver Bullion Coin enjoys a dominant market share worldwide.
Yes, and even better, silver is going on sale.
sEagle sales are falling off a cliff
november promises to be the lowest sales month of 2013
except for december, which will probably be even lower
a clear sign that demand has dried up
eat your green shoots
We have plenty of cash and will happily buy at lower prices and take delivery. A simple "thank you" should suffice.
OK, since this is a financial blog and a trading site (originally)... what is the best thinking around how to play this, exactly?
"anyone who wishes to take advantage of the inevitable and recurring hedge fund hotel collapse would be advised to put on a short Nasdaq, long 10Y pair on and await the unraveling."
Thoughts from the ZH peanut gallery?
I have been short a lot of the high flyer tech companies. I try to view it as a supply/demand issue. As more IPOs come on the supply of non-profit tech companies will continue to increase. Also, the increase in secondary offerings, stock option dilution, VCs cashing out, and convertible bonds should increase the supply. Demand is really strong for story stocks (3d priniters, Teslas, social networks etc.). I went short Tesla at 184.50 based on convertible bond dilution. I shorted DDD yesterday, and have been short Pandora, LinkedIn, etc. Fundamentals don't come close to explaining any of these companies, so it is only a matter of if not when. However, follow the technicals so you don't get burned. These type of stocks follow technical patterns exactly, because there are no value investors involved.
If picking bottoms is catching falling knives. What is picking tops?
Personally, I wouldn't short anything (without inside information) right now. By my calculations, there is an additional 300 billion in QE per year (at the current purchase rate) with no where to go but equities. My guess is TPTB will keep things as they at least until the next "election".
I don't believe that QE is inflating stocks, but I think the bubble is created by the perception that QE is inflating stocks. I see a blowoff top out of this current channel followed by a correction to the bottom end of the channel. If it catches a bid there, then you no the drill BTFD.
QE is not inflating stocks ?? Just the hint that there was a $10B / mth cut to printing $85B / mth sent the indices down 5%.
QE is free money. Free money goes into stocks via the banks.
Unless of course you are simply being sarcastic or a ClubFed plant.
$18billion POMO next week
Bones,
One can assume that the Tylers' reference to "the inevitable and recurring hedge fund hotel collapse" is the year-end rebalance, where managers book profits on winning positions (NASDAQ) to cover short positions (10-year govvies.)
Logically, the pair trade in question is long PSQ and DTYS, with stops.
Spock
How can you short against free money ? When interest rates get "real" then one might consider shorting..otherwise you are just grist for the immoral Club Fed.
Don't know if you understand how to use the interwebs, but go to the mint site and try to buy...oh wait it says sold out.
US mint sales are retail dumb money. Just shows that a burst bubble is begrundgingly fought by the dumbest of the dumb. By the end of this cyclical bear in the precious metals, US mint sales will be hitting multi-year lows, not highs. Bear has much further to go.
HAHAHAHAHAHAHAHAHAHAHAHAHA
Thanx for the smile
There is no reason to believe that without a systemic event in the middle east the status quo will change for the next 54 days. After that ? all bets are off as a correction will be necessary to properly correct the big box names like WMT & TGT back to their historical multiples on dwindling margins & bulk sales volumes. When the retail pokemptin goes down, the rest of the gimmick centered around the consumer led recovery will require a bad reset.
That includes gimmick monetization schemes, marketing clicks that depend on those retail box store's expending on their data bots and the REIT/Financials that generate the dry powder leverage needed to plug that macro model R*.
If the market DOES NOT melt up until the end of the year to keep pace with the 10B+ (leveraged at least 4x) of inflation being added each 2 weeks to the non-core inflation M2, then we have a serious problem. Because then even the money mechanism is busted now.
Only way silver & gold will kick up is when Yellen has to increase stimulus to counteract the furlough'ed employees, arms contractor layoffs (see LMT today) and culled spending outlays (Keystone XL layoffs inc!, drilling season throttling back in the Permian).
Bring in the muppets, call the clowns! There's a rainbow just around the bend ...
conviction... hedge fund...
for a moment there I thought a banker was actually arrested, I had a mini-heart attack.
You and me both, iCanh
Interesting how these types of charts just completely ignore entire asset classes. Last time I checked the mortgage market was almost as large as the entire UST market, and has a ton of exposure in Hedge Fund holdings, but its not even on the chart? No commodities either?
¥115 here we come.
been short QQQ / GLJ past three years and gave all my money to Mr. Tepper
problem now is Mr. Gross has just gone long 10Y's